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ELRCPartially AllowedCivil Suit No. 353 of 2011· [2012] KEELRC 276 (KLR)

Josephine Muthoni Kamau & 5 others v East Africa Safari Air Express Limuited [2012] KEELRC 276 (KLR)

Industrial Court of Kenya
2 October 2012
2,741 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court ruled six airline employees were unfairly made redundant because their employer skipped the mandatory legal procedure, awarding them notice, severance and compensation.

What this practically means

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Executive summary

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Six former employees of East Africa Safari Air Express Limited claimed wrongful, unlawful and unfair dismissal following their termination on 20th December 2010 on the ground that the respondent could not meet its financial obligations. They argued that no redundancy procedure under Section 40 of the Employment Act was followed: no prior notice of intended redundancy was issued to them personally or to the labour officer, no selection criteria was disclosed, and no notice pay, severance pay or leave dues were paid. The respondent admitted non-payment of dues, citing financial incapacity and new ownership, and led evidence from its manager, Mr. George Kivindyo, that a letter dated 21st December 2010 was written to the Minister for Labour and that affected employees were taken through the process on 21st December 2010, with 29 of 36 accepting. The court held that the Section 40 conditions are mandatory, found that the terminations were pre-dated and the 21st December meetings a mere formality, that the letter to the Ministry of Labour came only after the event, and that no selection criteria was disclosed. It declared the terminations wrongful and unfair, awarded each claimant one month's pay in lieu of notice, severance pay at 15 days per completed year, and compensation for loss of employment graded by length of service (from one month for the 1st Claimant to nine months for the 4th Claimant), but refused payment for the remainder of any contract term because the appointments were not fixed-term. Costs of the suit were awarded to the claimants.

Key legal issues

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01

Compliance with Section 40 procedure for redundancy

Holding

The respondent failed to comply with any of the statutory requirements - no notice to the union or labour officer a month prior, no personal written notice, no notification before the event, and payment of dues was deferred.

Reasoning

The claimants were only summoned on 21st December 2010 and given letters dated 20th December 2010, showing the process was an afterthought. The letter to the Ministry of Labour was written after the termination had already occurred, contrary to the statutory scheme requiring prior notice to the labour officer and union or the employee personally. The court held the statutory conditions mandatory and found the respondent aware of its failure to undertake its legal obligations.

p. 4
02

Fairness of the selection criteria for redundancy

Holding

The respondent did not share any criterion by which the particular claimants were targeted, making the process unfair despite the respondent's admission of dues owed.

Reasoning

Even where a valid reason for redundancy exists, fairness requires application of a criterion of seniority, abilities and reliability comparable with others in similar positions, qualifications and years of service. The alleged list of affected staff was never produced to the court, and no warning or notices were used to identify the claimants. The court found the previous practice of the employer indicative of bad faith.

p. 4
03

Remedies payable for unlawful and unfair redundancy

Holding

The court awarded each claimant leave dues (admitted), one month's pay in lieu of notice, severance pay at 15 days per completed year, and compensation for loss of employment graded by length of service, but refused payment for the remainder of any contract.

Reasoning

The respondent's manager had admitted liability for leave dues, one month notice and 15 days pay per year served as severance pay. Because the claimants served different durations and were of different grades, the court assessed compensation individually. The appointments were not fixed-term contracts, so payment for the remainder of a contract term was refused.

p. 4

Legal principles established

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  • The conditions in Section 40 of the Employment Act for termination on account of redundancy are mandatory and not left to an employer's choice.
  • A redundancy selection must apply a fair criterion of seniority, skill, ability and reliability, failing which the termination is unfair.

Court orders

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  1. 1.Declaration that each claimant suffered unlawful loss of employment
  2. 2.1st Claimant awarded Kshs. 15,000.00 notice pay, Kshs. 15,000.00 severance pay (2 years), Kshs. 15,000.00 compensation (one month) - total Kshs. 45,000.00 plus costs
  3. 3.2nd Claimant awarded Kshs. 14,000.00 notice pay, Kshs. 28,000.00 severance pay (4 years), Kshs. 28,000.00 compensation (two months) - total Kshs. 60,000.00 plus costs
  4. 4.3rd Claimant awarded Kshs. 17,000.00 notice pay, Kshs. 34,000.00 severance pay (4 years), Kshs. 34,000.00 compensation (two months) - total Kshs. 85,000.00 plus costs
  5. 5.4th Claimant awarded Kshs. 28,600.00 notice pay, Kshs. 85,000.00 severance pay (12 years), Kshs. 258,400.00 compensation (nine months) - total Kshs. 371,000.00 plus costs
  6. 6.5th Claimant awarded Kshs. 15,000.00 notice pay, Kshs. 22,500.00 severance pay (3 years), Kshs. 45,000.00 compensation (three months) - total Kshs. 82,500.00 plus costs
  7. 7.6th Claimant awarded Kshs. 15,000.00 notice pay, Kshs. 15,000.00 severance pay (2 years), Kshs. 15,000.00 compensation (one month) - total Kshs. 45,000.00 plus costs
  8. 8.Costs of the suit awarded to each claimant

Authorities

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Legislation

  • Employment ActSection 40
Jurisdiction invoked
Section 40 of the Employment Act (first-instance employment claim before the Industrial Court)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Josephine Muthoni Kamau & 5 others v East Africa Safari Air Express Limuited [2012] KEELRC 276 (KLR)", Case Analysis (2012). Civil Suit No. 353 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2012/276/eng@2012-10-02

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.