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Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No 1605 of 2013· [2014] KEELRC 900 (KLR)

Isaac Onsare Obondi v Value Pak Foods Limited [2014] KEELRC 900 (KLR)

Industrial Court of Kenya
25 March 2014
967 words in judgment
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed by the Respondent in various positions until his services were terminated on 17th September 2013 on the stated ground of low season in production and delivery of raw materials from farmers, sued for unfair termination. Pursuant to a consent recorded on 27th November 2013, the Respondent paid the Claimant's pre-termination entitlements, leaving only the issue of the legality of the termination for determination. The Court held that the termination letter, on its plain reading, effected a redundancy. Redundancy is a valid mode of termination but is subject to the conditions in Section 40 of the Employment Act, 2007, including notification of the employee and the labour officer, fair selection criteria with regard to seniority, skill, ability and reliability, payment of leave due, notice or wages in lieu, and severance pay of not less than fifteen days' pay per completed year of service. The Court found no evidence of compliance with any of these conditions. It also held that redundancy excludes any fault on the part of the employee, and that the Respondent's allegation of a poor employment record was unsupported apart from an unsigned attendance register, so it was ignored. The termination was declared unfair within the meaning of Section 45 of the Employment Act, and the Claimant was awarded Kshs. 97,554, being six months' salary as compensation. As part of the claim had been settled by consent, each party was directed to bear its own costs.

Key legal issues

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01

Whether the termination of the Claimant's employment, effected on grounds of low season in production and delivery of raw materials, was lawful

Holding

The termination was in substance a redundancy, but the Respondent complied with none of the Section 40 conditions, making the termination unfair under Section 45; the Claimant is awarded six months' salary as compensation.

Reasoning

The termination letter cited low season in production and delivery of raw materials, which the Court read as redundancy. Redundancy is a valid mode of termination subject to the conditions in Section 40 of the Employment Act, including notification of the employee and labour officer, fair selection criteria, payment of leave, notice and severance pay. The Court found no evidence of compliance with any condition. It also rejected the allegation of poor employment record as unsupported and inconsistent with the fault-free definition of redundancy, and awarded six months' salary.

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02

Whether the Claimant's alleged poor employment record could justify his selection for redundancy

Holding

No - the definition of redundancy excludes employee fault, and the allegation was unsupported by evidence beyond an unsigned attendance register.

Reasoning

The Respondent suggested in its Reply and submissions that the Claimant's disciplinary record informed his selection. The Court held that redundancy, by statutory definition, excludes any fault on the part of the employee. Further, apart from an unsigned attendance register for 2008 to 2010, no evidence proved the poor employment record, so the Court disregarded the allegation entirely.

p. 2

Legal principles established

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  • Redundancy, as defined in Section 2 of the Employment Act, excludes any fault on the part of the employee declared redundant, and termination on grounds of redundancy is valid only if the conditions in Section 40 of the Employment Act, 2007 are complied with.
  • An employer who terminates services citing low season/production must comply with the procedural and substantive requirements of Section 40 of the Employment Act, failing which the termination is unfair under Section 45.

Court orders

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  1. 1.Award in favour of the Claimant for the sum of Kshs. 97,554 being 6 months' salary in compensation for unfair termination
  2. 2.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 45
  • Employment ActSection 2
  • Labour Relations ActSection 2 (corresponding definition of redundancy)
Jurisdiction invoked
Industrial Court of Kenya jurisdiction over employment and labour relations disputes

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, "Isaac Onsare Obondi v Value Pak Foods Limited [2014] KEELRC 900 (KLR)", Case Analysis (2014). Cause No 1605 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/900/eng@2014-03-25

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