Jemmah Akoth Nyadera Onyosi & 6 others v Kenya National Trading Corporation [2014] KEELRC 367 (KLR)
The bottom line
#Kenya's Industrial Court ruled that disguising forced redundancies as 'voluntary' retirement is unfair and discriminatory, awarding six former employees compensation and damages.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination through a staff rationalisation with suitability interviews and pre-designed release forms was fair
The process was unfair, coerced and amounted to an unfair labour practice; the rationalisation was in substance a redundancy wrongfully implemented contrary to section 40 of the Employment Act and Article 41
The memos announcing VERS and later job applications never disclosed suitability interviews or that failure would cost employees their jobs. Claimants who declined VERS were made to sign pre-designed Employee Release Acceptance Forms under threat of losing everything, with no feedback records. The court held the force applied was the employer's power over employees risking loss of all benefits, making the process unfair, and that the exercise was in substance a redundancy wrongfully implemented contrary to section 40 and Article 41.
Whether the age-based differentiation in the VERS package (50+ paid on remaining years, under-50 paid on years served) was discriminatory
Yes - the differentiation had no justification and offended section 5 of the Employment Act and Articles 10, 27 and 41 of the Constitution
The respondent offered no reason for paying over-50 employees on remaining years to retirement while younger colleagues were paid on years served, despite similar service. The Ministerial correspondence did not justify the two categories, and the respondent omitted pages of the Minister's letter, which the court found could not have been done in good faith. Older employees were also disadvantaged in seeking new employment due to age. The court applied the presumption of unfairness on a specified ground of discrimination.
Whether failure to involve the union rendered the process unfair
Yes - the union representing the unionised claimants had to be involved in a process resulting in loss of employment
The claimants were members of the Kenya Commercial Food and Allied Workers Union. The respondent's witness claimed a union representative (Mr Egesa) was informed, but no record was produced. Where a unionised employee faces termination or revision of terms through a rationalisation, the union must participate; the claimants' choice of advocates did not relieve the respondent of this duty.
Whether the claimants were entitled to the underpayments, notice, transport allowance and tax waiver claimed
Underpayments awarded for three claimants; one month's notice pay; Kshs.2,000 transport allowance per claimant; tax exemption to be released for collection
The court found the bar on the 50% salary increase for long-serving employees absurd and unfair; the respondent did not contest the amounts. The respondent's own Code of Rules provided for redundancy leave travel allowance. The tax exemption had been approved by the Minister and was to be released to the claimants. The 1.5 months per year served formula applied to the claimants less amounts already paid.
Legal principles established
#- Where an employer contemplates staff rationalisation, the trade union representing unionised employees must be involved and consultation is part of the right to fair labour practices under Article 41
- Any employer scheme or ministerial approval for release of employees must conform to the legal minimum; an approval cannot legalise a scheme that goes below statutory minimums
- Treating employees differently on the ground of age without justification amounts to unfair discrimination
- Under section 74 of the Employment Act, the duty to produce employment records rests with the employer, and absence of records is construed against the employer
Court orders
#- 1.Declaration that the claimants were unfairly taken through a staff rationalisation programme that resulted in their wrongful loss of employment
- 2.Finding that the claimants were discriminated against contrary to Article 41 of the Constitution and section 5 of the Employment Act
- 3.Each claimant awarded six months gross salary as compensation for unfair termination (1st Kshs.116,040; 2nd Kshs.121,476; 3rd Kshs.117,114; 4th Kshs.702,684; 5th Kshs.95,562; 6th Kshs.116,040)
- 4.Each claimant awarded Kshs.100,000 in damages for discrimination
- 5.Each claimant awarded one month gross pay in lieu of notice
- 6.Each claimant to collect their tax exemption dues from the respondent within 14 days
- 7.Each claimant to receive 1.5 basic salary for each year served based on the gross pay, computed and paid within 14 days, less amounts already received
- 8.Underpayments awarded to Jemimah Onyisi Kshs.49,020; George Karanja Wagochi Kshs.109,744; Jane Sianoi Nooseli Kshs.109,022
- 9.Each claimant awarded Kshs.2,000 as transport allowance
- 10.Claimants awarded costs of the suit
- Jurisdiction invoked
- Section 12 of the Industrial Court Act read together with section 49(1)(c) of the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jemmah Akoth Nyadera Onyosi & 6 others v Kenya National Trading Corporation [2014] KEELRC 367 (KLR)", Case Analysis (2014). Cause No. 1880 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/367/eng@2014-06-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.