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ELRCPartially AllowedCause 223 of 2011· [2013] KEELRC 425 (KLR)

EDWIN ODOUR CHACHA V PHILISTERS ONYANGO & ANOTHER [2013] KEELRC 425 (KLR)

Industrial Court of Kenya
27 March 2013
1,447 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled an NGO unfairly terminated its employee, awarding him Kshs.120,166.70 because proper Employment Act procedures were ignored.

What this practically means

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Executive summary

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Edwin Oduor Chacha, acting in person, claimed he was unfairly terminated from employment by the Childrens Legal Action Network and sought Kshs.93,260.00, a certificate of service, costs and interest. The Respondent, through Waiganjo Wachira & Co. Advocates, filed a reply admitting the employment but contending the contract was not renewed due to services no longer being required, dishonesty and unsatisfactory performance. The Respondent failed to attend court despite proper service, and the claim proceeded ex parte. Justice Maureen Onyango found the Claimant was employed on permanent terms from 1st April 2001 and remained in continuous employment until termination by letter dated 1st October 2010. The termination letter gave two grounds: relocation to new premises making his services unnecessary (which would amount to redundancy), and an earlier suspension over missing items (which would be disciplinary). The court held that the disciplinary issue had been concluded when the Claimant resumed duty after suspension, and that neither the Section 40 redundancy procedure nor the Section 41 disciplinary procedure had been followed, rendering the termination unfair. The court awarded Kshs.10,000/= in lieu of notice, Kshs.65,166.70 in lieu of 195.5 untaken annual leave days, and, correcting the Claimant's in-person pleading, severance pay of Shs.45,000/= at 15 days' salary per completed year instead of service pay. Judgment was entered for the Claimant for Kshs.120,166.70 plus a Certificate of Service, with no orders for costs.

Key legal issues

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01

Nature and length of the Claimant's contract of employment

Holding

The Claimant was employed on permanent terms from 1st April 2001 and remained in continuous employment on similar terms until termination on 1st October 2010, notwithstanding the later issue of fixed-term contracts.

Reasoning

The Claimant's original letter of appointment confirmed permanent appointment with effect from 1st April 2001. The Respondent did not contest this. Although fixed-term contracts were later issued and renewed, the last expiring 31st May 2010, the Claimant remained in employment on similar terms until termination on 1st October 2010.

p. 2
02

Whether the Claimant's termination was fair

Holding

The termination was unfair: neither the Section 40 redundancy procedure nor the Section 41 disciplinary procedure was followed, and the termination was in substance a redundancy.

Reasoning

The termination letter gave two grounds: relocation to new premises making services unnecessary (redundancy) and an earlier suspension over missing items (discipline). The disciplinary issue had been concluded when the Claimant resumed duty after suspension. Neither the Section 40 redundancy procedure nor the Section 41 disciplinary procedure was complied with, rendering the termination unfair.

p. 2
03

Entitlement to pay in lieu of notice

Holding

The Claimant was awarded Kshs.10,000/= as one month's salary in lieu of notice, treating the lump-sum payment made as salary for September 2010.

Reasoning

The Respondent's letter of 1st October 2010 lumped together September salary and payment in lieu of notice. The court treated the payment as September salary and separately awarded one month's salary in lieu of notice.

p. 3
04

Entitlement to pay in lieu of annual leave

Holding

The Claimant was awarded Kshs.65,166.70 being 195.5 untaken leave days at a daily rate of Shs.333.33.

Reasoning

The Claimant pleaded and testified he never took annual leave. The Respondent's exhibits showed off-duty and sick off but only 4 days of annual leave. The Respondent made a general denial without stating entitlement, days taken or balance, so the court awarded leave for the period 1st April 2001 to 1st October 2010.

p. 3
05

Entitlement to service pay versus severance pay

Holding

Having found the Claimant was declared redundant, the court awarded severance pay of Shs.45,000/= (15 days' salary for 9 completed years) instead of the service pay claimed.

Reasoning

Because the court held the Claimant was declared redundant rather than dismissed for service-related reasons, he was entitled to severance pay under the Employment Act at not less than 15 days' salary per year worked. The court made this correction in light of the Claimant acting in person.

p. 3

Legal principles established

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  • For termination of employment to be fair, the employer must prove both fair procedure and valid reason.
  • An employer must inform the employee of the reasons for termination and give the employee an opportunity to state his case.
  • An employer who fails to comply with the statutory procedures for redundancy (Section 40) or discipline (Section 41) effects an unfair termination.
  • Where a suspension over alleged misconduct was concluded and the employee resumed duty, the same issue cannot later form the basis of termination.
  • A redundant employee is entitled to severance pay at not less than 15 days' salary for each year worked.
  • An employee is entitled to a Certificate of Service under Section 51 of the Employment Act.

Court orders

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  1. 1.Judgment for the Claimant against the Respondent for Kshs.120,166.70
  2. 2.Claimant to be issued with a Certificate of Service
  3. 3.No orders for costs

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 45
  • Employment ActSection 40
  • Employment ActSection 51
Jurisdiction invoked
Industrial Court jurisdiction over employment and labour relations disputes (Cause filed under the Industrial Court's employment jurisdiction); Employment Act, Sections 40, 41, 45 and 51

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "EDWIN ODOUR CHACHA V PHILISTERS ONYANGO & ANOTHER [2013] KEELRC 425 (KLR)", Case Analysis (2013). Cause 223 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/425/eng@2013-03-27

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