Geoffrey Nyabuti Onguko v Blow Plant Limited (Cause 1647 of 2014) (Employment and Labour) [2015] KEELRC 458 (KLR)
The bottom line
#A Kenyan court ruled the employer's redundancy was unfair because it skipped proper notice to employees, awarding the worker compensation, notice pay and severance.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 40 of the Employment Act in redundancy
The termination notice issued on 28th December 2012 without a general notice to employees and a personal notice of not less than one month was invalid and unlawful, rendering the redundancy unfair
Redundancy is a business decision not arising from the employee's fault, and the law requires a general notification to employees that redundancy is likely, followed by an individual notice of at least one month. The Respondent issued only a termination letter on 28th December 2012 and invited the Claimant for dues on 31st December 2012. No general notice was issued, the Labour Officer was not involved, and no evidence showed when or why the decision was made or that other employees were affected. The process offended section 40 and Article 41.
Unfair termination under Article 41 of the Constitution
Singling out the Claimant for termination under the guise of redundancy without demonstrated justification was contrary to Article 41 and constituted an unfair labour practice warranting compensation
The Respondent's witness did not state when the layoff decision was taken or by whom, why sales were declining, or how the layoff was necessary. No other employees were shown to be affected. Terminating only the Claimant under the guise of redundancy violated the constitutional guarantee of fair labour practices, so compensation was due for unfair termination, assessed at six months' gross pay.
Severance pay computation absent employer records
In the absence of employer-held employment records, the Claimant was taken to have served from the whole of 2010, earning severance of 15 days' wage for each of 3 years
Severance pay in redundancy, where not agreed, is 15 days' wage for each completed year of service. The Claimant only stated he was employed in 2010 without dates, but sections 73 and 74 of the Employment Act make the employer the legal custodian of work records. Since the Respondent did not produce the records, the court inferred service for the whole of 2010, 2011 and until the end of 2012.
Legal principles established
#- A lawful redundancy under section 40 of the Employment Act requires a general notification to all employees followed by a personal notice of not less than one month to the affected employee; payment in lieu does not substitute for the notice
- Where an employer is the legal custodian of employment records, the absence of records is construed in favour of the employee's claimed period of service
- Terminal dues are subject to statutory deductions; an employer is required by law to make NSSF and NHIF deductions and refusal of dues on that ground is unjustified
Court orders
#- 1.A declaration that the termination of the Claimant was unfair
- 2.Compensation awarded at Kshs.68,670.00 (6 months gross pay)
- 3.Notice pay at Kshs.11,445.00
- 4.Severance pay at Kshs.17,167.50 (15 days' wage for each of 3 years)
- 5.Salary for December 2012 awarded at Kshs.11,445.00
- 6.Costs of the case at 50% awarded to the Claimant
- 7.Statutory deductions to be made from the award and remitted to the relevant agencies
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act over dismissal and dues claims
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Geoffrey Nyabuti Onguko v Blow Plant Limited (Cause 1647 of 2014) (Employment and Labour) [2015] KEELRC 458 (KLR)", Case Analysis (2015). Cause No. 1647 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/458/eng@2015-09-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.