DIRECTORATE OF PERSONNEL MANAGEMENT (GOK) v UNION OF KENYA CIVIL SERVANTS [2005] KEELRC 1 (KLR)
The bottom line
#Kenya's Industrial Court ruled the Government could retrench civil servants without consulting their union, but they must receive full terminal benefits before leaving.
What this practically means
#Executive summary
#Key legal issues
#Whether the Voluntary Early Retirement Scheme was voluntary and whether the Government was obliged to consult the Union
The scheme was voluntary as employees were at liberty to opt to retire or remain; the Government was not obliged to consult the Union on the reduction of staff, and the Court would not halt the scheme
The Court held 'voluntary' means free choice without compulsion, and employees could choose to retire or remain. It distinguished redundancy/retrenchment as involuntary loss of employment, holding that the decision whether retrenchment is necessary is a purely administrative function of the employer, drawing on Supreme Court of Pakistan authority. So long as the reorganisation is bona fide and not tainted by bad faith, victimisation or unfair labour practice, the Court cannot interfere.
Whether the Union's demand for 600% salary increase should be granted
A nil award was made; the demand was economically untenable as it covered a period (1980-2004) when no relationship existed between the parties and the Union never formally submitted its demands
The Union was banned in 1980 and only re-recognized on 14th May 2004, so no industrial relationship existed for most of the period claimed. The Union also failed to formally submit demands for counter-proposals. The Court noted employer ability to pay is decisive and the quantum is best determined by an expert body such as the Treasury. The EPD report supporting the claim was of no value to the Court.
Review of terms and conditions of service of civil servants
Dismissed as withdrawn by mutual agreement of the parties
During the proceedings the parties mutually agreed to withdraw this issue for negotiations between them, and the Court accordingly dismissed it as withdrawn.
Meaning and principles of redundancy and retrenchment and the 'last in, first out' rule
Redundancy and retrenchment mean the same thing - involuntary and permanent loss of employment from excess manpower; the LIFO rule may be departed from for sound and valid reasons
The Court adopted the statutory definition of redundancy under Section 2 of the Act and equated retrenchment with the discharge of surplus labour in a continuing industry. It held the employer must justify both the necessity and the manner of the retrenchment, and may depart from LIFO where an employee is inefficient, unreliable or habitually irregular, provided reliable evidence supports the departure.
Legal principles established
#- Whether redundancy or retrenchment is necessary is exclusively and purely an administrative matter; the employer/Government is not obliged to consult the union or take its consent, provided the action is bona fide and not vitiated by bad faith, discrimination or victimisation
- An employer has an inherent and unfettered right to effect bona fide reduction of surplus staff on grounds of economy, which the Court will not disturb where honestly arrived at
- The court will only interfere with a government pay structure in glaring cases where it is patently unjust, or where a category of employees has been ignored or their increase patently disproportionate to similar employees
- An employer may depart from the 'last in, first out' rule in redundancy for sufficient and valid reasons, but the departure must be justified by sound and valid reasons or the action may be treated as mala fide or an unfair labour practice
Court orders
#- 1.Issue (c), review of terms and conditions of service, dismissed as withdrawn
- 2.The Union's demands for consultation on and halting of the Voluntary Early Retirement Scheme rejected; Government at liberty to proceed with the reduction/redundancy/retrenchment provided no employee is retired unless terminal benefits have been paid in full, except normal pension disbursed periodically
- 3.Recommendation that the golden handshake payment be raised from Kshs.80,000 to Kshs.120,000
- 4.Nil award on the salary issue for now
- 5.Parties ordered to commence formal negotiations on better terms and conditions of service for unionisable civil servants immediately
- Jurisdiction invoked
- Trade Disputes Act, Cap. 234, Section 14(7) and (9)(e) - Notification of Dispute with statutory certificate from the Labour Commissioner
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "DIRECTORATE OF PERSONNEL MANAGEMENT (GOK) v UNION OF KENYA CIVIL SERVANTS [2005] KEELRC 1 (KLR)", Case Analysis (2005). Cause No. 78 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2005/1/eng@2005-05-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.