Heritage Insurance Company Limited v Christopher Onyango & 23 others [2017] KECA 27 (KLR)
The bottom line
#Kenya's Court of Appeal threw out a Kshs. 12 million award against Heritage Insurance, holding proper severance payments made a redundancy lawful.
What this practically means
#Executive summary
#Key legal issues
#Which Human Resource Handbook governed the respondents' employment
The 2013 Handbook, being the latest and having been published to the respondents, governed the terms of employment; signatures were unnecessary because the contracts contained a clause requiring obedience of lawful orders and directions issued from time to time.
The contracts required obedience of the employer's lawful orders given from time to time, incorporating both handbooks without the need for signature. Neither handbook was signed by the respondents, and the respondents never alleged ignorance of the 2013 Handbook or failure to notify. It would not be plausible for the 1994 and 2013 handbooks to operate side by side; the preponderance of evidence showed the July 2013 Handbook was in force.
Whether there was discrimination
Discrimination was not proved; no evidence was led establishing violation of any constitutional right and no constitutional Article was invoked.
The amended statement of claim pleaded discrimination only in general terms, with sub-paragraphs that did not allude to the Constitution. No evidence established violation of any constitutional right and no Article of the Constitution was cited, so the award of Kshs. 500,000 per claimant as damages for discrimination could not stand.
Whether the termination was wrongful
Termination by notice in accordance with the terms of employment could not be wrongful; nothing proved the redundancy was fake and the respondents were paid in lieu of notice.
Under the terms of employment, termination was by one month's notice or payment in lieu. The respondents were paid in lieu of notice, severance pay at 15 days per year worked in accordance with the contract and handbook, and nothing in the evidence proved the redundancy was fake. Termination in accordance with the terms of employment was therefore not wrongful and no damages arose.
Whether an award of 10 months' salary as compensation was justified
No; the appellant had complied with the law by paying severance under section 40 of the Employment Act, so there was no justification for additional compensation under section 49.
The respondents had already been paid severance of 15 days for each year worked in accordance with the contract and the Human Resource Manual. That compliance with section 40 of the Employment Act removed any basis for further compensation of ten months' salary under section 49, answering the fourth issue and requiring the trial judgment to be set aside.
Legal principles established
#- Where a contract of employment contains a general clause requiring obedience of the employer's lawful orders and directions issued from time to time in a staff manual or handbook, the terms of such manual or handbook are incorporated into the contract and do not require the employee's signature to bind the employee; it is enough that the employer brings it to the employee's attention.
- On a first appeal from a superior court exercising original jurisdiction, the Court of Appeal has power under rule 29 to re-appraise the evidence and draw inferences of fact, and to confirm, reverse or vary the decision below.
Court orders
#- 1.Appeal allowed
- 2.Judgment of the Employment and Labour Relations Court delivered on 7th April 2016 in case No. 781 of 2015 set aside
- 3.Each party to bear own costs (court declined to order costs against respondents)
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- Cause No. 781 of 2015
- Jurisdiction invoked
- First appeal from a superior court exercising original jurisdiction, under rule 29 of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Heritage Insurance Company Limited v Christopher Onyango & 23 others [2017] KECA 27 (KLR)", Case Analysis (2017). Civil Appeal No. 114 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/27/eng@2017-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.