Paul Ngeno v Pyrethrum Board of Kenya Ltd [2013] KEELRC 869 (KLR)
The bottom line
#Kenya's Employment Court ruled that an employer cannot declare a suspended employee redundant to dodge a disciplinary case, and must pay him over Kshs. 1.5 million.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to salary withheld during interdiction and suspension
Claimant entitled to half pay during interdiction and full pay during suspension up to the date of acquittal (Kshs.936,752.00).
The respondent admitted entitlement to the withheld half pay during interdiction and salary during suspension to 7.08.2009. The suspension was to subsist until the criminal case was determined; it was never lifted, so the claimant remained in employment until acquittal on 12.11.2010. Following the court's reasoning in Grace Gacheru Muriithi, an exculpated employee must be paid for the suspension period.
Fairness of termination by redundancy
Termination by redundancy was unfair; award of Kshs.521,196.00 being twelve months' gross pay.
A disciplinary process was pending and unconcluded, making it improper to initiate a parallel redundancy termination. Further, the mandatory redundancy procedure in section 40 of the Employment Act, 2007 was not followed: no notice, no preparation and no disclosure of selection criteria. Twelve months' pay at Kshs.43,433.00 was awarded.
Validity of pending disciplinary case as redundancy selection criterion
A pending disciplinary case cannot validly be used to target an employee for redundancy.
Under section 40(1)(c) selection must consider seniority, skill, ability and reliability. Only concluded adverse disciplinary findings can indicate these attributes. A pending case proves nothing; the fair course is to conclude the disciplinary case first, the only exception being a wholesale redundancy of the establishment or category.
Leave pay, Sacco deductions and rent offset
Leave pay refused for 2008-2010 but Kshs.6,680 awarded for 2007; Pareto Sacco deductions of Kshs.166,400 payable; rent of Kshs.121,600 offset.
Leave is earned per section 28 of the Employment Act for consecutive months of actual service, so unearned leave was refused. Sacco deductions were made but not remitted, so the claim was justified despite the unsupported submission on loan recovery. Rent of Kshs.3,200 monthly for 38 months was deducted from the claimant's entitlement.
Legal principles established
#- An employee on interdiction or suspension has a legitimate expectation to be paid all dues if exculpated at the end of the disciplinary process; payment depends on the outcome of the disciplinary proceedings.
- An acquittal in a criminal case arising from the same allegations is binding on the employer and precludes administrative disciplinary action on substantially similar grounds.
- Where the employer elects to report a matter involving a criminal element to a criminal justice agency, that agency's findings bind the employer.
- Running a redundancy termination in parallel with a pending disciplinary process is unfair labour practice because the grounds for termination are blurred and the employee is denied due process.
- A pending disciplinary case is not a valid redundancy selection criterion; only adverse findings after conclusion of the disciplinary process may inform reliability, ability and skill.
Court orders
#- 1.Declaration that the respondent's termination of the claimant's employment by way of redundancy was unfair
- 2.Respondent to pay the claimant Kshs.1,552,861.00 by 1.12.2013, failing interest at court rates from the date of judgment till full payment
- 3.Respondent to pay costs of the case
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007 and Labour Relations Act framework; not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Paul Ngeno v Pyrethrum Board of Kenya Ltd [2013] KEELRC 869 (KLR)", Case Analysis (2013). Cause No. (not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/869/eng@2013-11-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.