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ELRCPartially AllowedNot stated in judgment (Claim filed 9.1.2012)· [2014] KEELRC 826 (KLR)

Richard Manya Ayieko v Chemilil Sugar Co. Ltd [2014] KEELRC 826 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
27 February 2014
HWHellen Wasilwa
826 words in judgment
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The bottom line

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Kenya's employment court ruled that outsourcing a worker's job without written redundancy notice is unfair termination, entitling the employee to severance, notice pay, and house allowance.

What this practically means

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Executive summary

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The claimant, Richard Manya Ayieko, sued through Bruce Odeny & Co. Advocates, alleging he was employed by the respondents in October 1986 as a sanitary attendant without an appointment letter, earning Ksh 12,420 monthly. In 2009 the respondents outsourced cleaning services, rendering him redundant without notice or terminal dues. After intervention by a labour officer he received Ksh 95,889, far below the Ksh 1,049,385 he claimed, which comprised house allowance, severance pay, notice pay, leave and off pay; he also sought a certificate of service and gratuity. The respondents, through Otieno, Yogo, Ojuro and Co. Advocates, filed a response asserting the termination followed due process and the Employment Act, and called no witness. The court, Wasilwa J, framed two issues: whether the termination was lawful, and whether the claimant was entitled to the remedies sought. Applying Section 40 of the Employment Act 2007, the court found no evidence of written notification of the redundancy; the outsourcing left the claimant 'in the cold', amounting to unfair termination. On remedies, the court awarded one month's salary in lieu of notice (Ksh 12,420), severance at 15 days' pay per completed year (Ksh 74,520), house allowance (Ksh 402,408) and a certificate of service, but refused three months' notice pay as contrary to Section 40(f), and disallowed unproven leave and overtime claims. After offsetting the Ksh 95,889 already paid, a balance of Ksh 393,459 was due. The respondents were ordered to pay costs. The claim thus partially succeeded.

Key legal issues

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01

Whether the claimant's termination on account of redundancy following outsourcing of cleaning services was lawful

Holding

The termination was unfair because the employer did not comply with the statutory redundancy procedure under Section 40 of the Employment Act 2007

Reasoning

Section 40(1) sets mandatory conditions for redundancy, including written notification of the employee and the labour officer at least one month before termination. The claimant's services were simply outsourced with no written notice, and he received no terminal dues beyond payment extracted through the labour officer. The court held this fell short of the statutory procedure, rendering the termination unfair.

p. 2
02

What remedies the claimant is entitled to

Holding

The claimant is entitled to one month's notice pay, severance pay at 15 days per completed year of service, house allowance at 15% of salary for the period of service, and a certificate of service; but not three months' notice pay or unproven leave and overtime claims

Reasoning

The court applied Section 40(f) and (g) of the Employment Act to award one month's salary in lieu of notice and severance at 15 days' pay per completed year. House allowance was computed at 15% of monthly salary over 216 months of service. Heads not proved (leave, overtime) and the claim for three months' notice, which exceeded the statutory entitlement, were disallowed. Payments already made were offset against the award.

p. 2

Legal principles established

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  • Termination on account of redundancy must strictly comply with the conditions set out in Section 40 of the Employment Act 2007, including written notice to the employee and labour officer; failure to do so amounts to unfair termination.

Court orders

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  1. 1.Respondents to pay the claimant 1 month salary in lieu of notice (Ksh 12,420)
  2. 2.Respondents to pay severance pay equivalent to 15 days' pay for each year worked (Ksh 74,520)
  3. 3.Respondents to pay house allowance of 15% of salary for 216 months (Ksh 402,408)
  4. 4.Respondents to issue the claimant with a certificate of service
  5. 5.Amounts already paid (Ksh 95,889) to be offset, leaving a balance of Ksh 393,459 payable to the claimant
  6. 6.Respondents to meet the costs of the suit

Authorities

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Legislation

  • Employment Act 2007Section 40(1)(a)-(g)
  • Employment Act 2007Section 40(f)
  • Labour Industrial ActNot specified
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act 2007; Labour Industrial Act)

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, "Richard Manya Ayieko v Chemilil Sugar Co. Ltd [2014] KEELRC 826 (KLR)", Case Analysis (2014). Not stated in judgment (Claim filed 9.1.2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/826/eng@2014-02-27

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