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ELRCPartially AllowedNot stated in the extract (Memorandum of Claim filed 1 October 2010)· [2013] KEELRC 683 (KLR)

Isabella Harusi Shehe v Branch Secretary, Kenya National Union Of Teachers (Kilifi Branch) & another [2013] KEELRC 683 (KLR)

Employment and Labour Relations Court
26 July 2013
1,557 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 a KNUT Kilifi employee's redundancy was fair, but she was still owed statutory severance and admitted arrears totalling over Kshs 671,000.

What this practically means

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Executive summary

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The Claimant, employed by KNUT Kilifi as a copy typist from 1983/1984 and promoted to Higher Clerical Officer in 1994, was terminated through redundancy effective 1 July 2010 following the split of the original Kilifi branch into Kilifi, Malindi and Kaloleni branches. She filed a Memorandum of Claim on 1 October 2010 alleging wrongful termination and failure to pay terminal dues. The court, Radido Stephen J, first considered whether the termination was wrongful. Applying section 40 of the Employment Act and clause 21 of the applicable terms of service, the court found the Claimant had been notified in writing, the letter copied to the Local Labour Officer, and given notice of two months and three weeks, just short of the contractual three months, and held the termination substantially compliant with the law. On quantum, the court found no contractual redundancy severance provision, invoking section 40(1)(g) to award severance at fifteen days pay per completed year: 405 days for 27 years, computed at a daily rate of basic salary plus housing allowance divided by 26, totalling Kshs 430,920/-. Claims for gratuity 1991-2001, salary arrears 1998-2003, and commuter and housing allowance arrears were held time barred under section 4(1) of the Limitation of Actions Act and section 90 of the Employment Act. However, a 2006 admission letter grounded awards of salary arrears for 2005 (Kshs 46,029/-), Gratuity TME 2002-2006 (Kshs 165,122/-) and Gratuity 2002-2006 (Kshs 117,784/80). After deducting Kshs 88,000/- received, the total award was Kshs 671,855/80. NSSF and PAYE claims were left to statutory mechanisms. There was no order as to costs.

Key legal issues

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01

Whether the redundancy termination was fair and lawful

Holding

The termination was fair, being substantially compliant with section 40 of the Employment Act and the contractual three months notice term

Reasoning

The Claimant was notified in writing of the redundancy, the letter was copied to the Local Labour Officer, and notice of two months and three weeks was given, close to the three months notice required by clause 21 of the terms of service. Section 40's procedural requirements were met and the branch restructuring justified the redundancy.

p. 2
02

Entitlement to severance pay on redundancy

Holding

Statutory minimum severance pay of 15 days pay per completed year of service applied, yielding Kshs 430,920/- for 27 years

Reasoning

The terms and conditions of service contained no redundancy severance clause, so section 40(1)(g) was implicated. The court computed the daily rate from basic salary plus housing allowance divided by 26 and awarded 405 days pay for 27 years of service.

p. 2
03

Limitation of pre-termination claims

Holding

Claims predating about 2004 were time barred, but claims admitted in a 2006 letter (salary arrears 2005, TME and gratuity 2002-2006) were filed within the six year limitation period

Reasoning

Section 4(1) of the Limitation of Actions Act and section 90 of the Employment Act barred the older claims admitted to have accrued years earlier. However, the six year limitation applicable at the time of the 2006 admission meant claims filed in 2010 were within time.

p. 3

Legal principles established

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  • Where a contract of employment has no provision on severance pay on redundancy, section 40(1)(g) of the Employment Act applies, entitling the employee to severance pay at the rate of fifteen days pay for each completed year of service
  • Severance pay is computed on the daily rate derived from basic salary plus housing allowance divided by 26

Court orders

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  1. 1.Respondents to pay the Claimant severance pay of Kshs 430,920/- for 405 days (27 years)
  2. 2.Respondents to pay salary arrears for 2005 of Kshs 46,029/-
  3. 3.Respondents to pay Gratuity TME 2002-2006 of Kshs 165,122/-
  4. 4.Respondents to pay Gratuity 2002-2006 of Kshs 117,784/80
  5. 5.Deduction of Kshs 88,000/- already received, leaving a total award of Kshs 671,855/80
  6. 6.No order as to costs

Authorities

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Legislation

  • Employment Actsection 40 (including section 40(1)(g))
  • Employment Actsection 90
  • Labour Institutions Actvarious Regulations of Wages Orders
  • Limitation of Actions Actsection 4(1)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over a dispute of wrongful termination and terminal dues

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, "Isabella Harusi Shehe v Branch Secretary, Kenya National Union Of Teachers (Kilifi Branch) & another [2013] KEELRC 683 (KLR)", Case Analysis (2013). Not stated in the extract (Memorandum of Claim filed 1 October 2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/683/eng@2013-07-26

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