Gladys Agayo v Somak Travel Ltd [2015] KEELRC 122 (KLR)
The bottom line
#A Kenyan court ruled that paying money cannot fix a badly handled redundancy — employers must follow the law's notice and hearing steps.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 40 redundancy procedure
The Respondent violated the mandatory notice and consultation requirements of section 40, rendering the redundancy unfair
The Respondent's business downturn dated from 2008 and the decision to terminate was taken in 2012, giving ample time to issue the notices required by section 40, including notification of the labour officer and consultation with affected employees. Willingness to pay more notice pay cannot cure procedural non-compliance. The abrupt issuance of a termination letter on the Claimant's return from leave caused trauma and is not legally acceptable.
Termination for poor performance
No evidence of notice, hearing or warning letters was produced; imputing poor performance as a reason was unfair under section 45
The termination letter cited only the business downturn, not poor performance. The alleged warning letters were not produced in court and the reasons for them were not stated. Where poor performance is alleged, section 41 demands that the employee be informed, given a chance to defend herself and heard before a decision is taken. None of that occurred, so the reason cannot stand.
Lawfulness of medical cover deductions
The unilateral conversion of a fully employer-funded medical benefit into a contributory scheme and deduction from salary without consent was unlawful
Section 10(2) of the Employment Act requires employment contracts to spell out all benefits, including medical cover. Once outlined, benefits cannot be negatively varied without the employee's consent. The Respondent relied on a memo posted on a notice board while the Claimant was on leave, and produced no policy document or audited accounts showing the scheme was contributory or what the employer contributed. The Claimant's personal payments must be refunded.
Severance pay quantum
Severance pay assessed at 15 days' pay for each of 11 complete years served, at kshs.313,010.50
The Claimant served from 5th June 2001 to 1st April 2012, completing 11 years. In the absence of any document showing a higher entitlement, such as a negotiated union package which the Claimant bore the duty to produce, the statutory rate of 15 days' pay per year under section 40 applies. The higher amount offered by the Respondent was not disturbed as to receipt but the assessed entitlement is as stated.
Legal principles established
#- Section 40 of the Employment Act is mandatory in redundancy; failure to give the required notices renders the termination an unfair labour practice
- Benefits granted under a written contract of employment cannot be unilaterally reviewed to the employee's disadvantage without consent
- Where an employer alleges poor performance, section 41 requires notice and a hearing before termination
Court orders
#- 1.A declaration that the termination of the Claimant was unfair
- 2.Compensation awarded at kshs.569,110.00
- 3.Notice pay at kshs.113,882.00
- 4.Severance pay at kshs.313,010.50
- 5.Medical cover deductions refunded at kshs.387,000.00
- 6.Payments subject to the provisions of section 49(2) of the Employment Act
- 7.Payments due less kshs.389,394.03 already received from the respondent
- 8.Claimant awarded 50% of costs
- 9.A Certificate of Service to be issued within 7 days without any conditions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; Labour Relations Court Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gladys Agayo v Somak Travel Ltd [2015] KEELRC 122 (KLR)", Case Analysis (2015). Cause No. 413 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/122/eng@2015-11-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.