John Ngowah v East Africa Safari Air Express Limited [2015] KEELRC 840 (KLR)
The bottom line
#A Kenyan court ruled that an employer who retrenched a worker without following the legally required redundancy procedure must pay him notice, severance, bonus and compensation.
What this practically means
#Executive summary
#Key legal issues
#Identity of the employer and commencement date of employment
The employer was East Africa Safari Air Express Limited from 1st July 2003, the Claimant having accepted a new letter of appointment from a different entity than Eagle Aviation Limited.
The court compared the two appointment letters (annexures 1 and 2). Although terms were similar, the appointment at annexure 2 was by a different legal entity and was signed in acceptance by the Claimant on 18th July 2003. The explanation that this was a mere change of name was unsupported; the earlier employer was not joined, so no claims predating 1st July 2003 could lie against the Respondent.
Whether the termination was a lawful termination for poor performance or a redundancy/retrenchment
The sole reason in the termination letter was financial/operational difficulties, which in law amounts to a redundancy (retrenchment), not a termination for poor performance.
The termination letter cited price wars and high operating costs and offered future recruitment priority. The Respondent's own witness confirmed serious financial problems and a management decision to lay off staff. Poor performance was not stated in the letter, so the court could not treat it as the ground. The situation fell within the statutory definition of redundancy under section 2 of the Employment Act.
Whether the redundancy complied with section 40 of the Employment Act
The redundancy was procedurally flawed - no notice of the intended layoff or reasons given in advance - and therefore amounted to unfair termination under section 45.
While the employer's management decision to retrench was genuine and within its prerogative, section 40 procedure is mandatory: notice, reasons for the intended layoff given in advance, and other outlined steps. Nothing prevented the Respondent from complying, and no justification existed under sections 43 or 45. If poor performance were the issue, due process should have been followed instead.
Remedies
Notice pay (admitted), severance pay at 15 days per completed year under section 40(1)(g) for 8 years, bonus of Kshs.5,700, and three months' salary as compensation under section 49 were awarded; service pay under section 35 declined.
Notice pay was admitted and computed at two months of Kshs.21,850. Severance pay flowed from the finding of unfair redundancy, 15 days' pay for each of 8 complete years. The bonus was a written benefit recognised by the Respondent, and since poor performance was not the ground, it remained due. Service pay under section 35 was barred because NSSF and NHIF remittances were made. Compensation of three months' salary was fair in the circumstances.
Legal principles established
#- Section 40 of the Employment Act sets out mandatory procedures for redundancy, and non-compliance renders the resulting termination unlawful and unfair under sections 43 and 45.
- The decision to declare redundancy or retrench is the employer's prerogative, but it must be implemented in accordance with the law.
- Terminal dues on redundancy are payable immediately upon termination, and an employer may not delay payment on the footing of a 90-day waiting period.
Court orders
#- 1.Declaration that the Claimant was unfairly terminated through a flawed redundancy process
- 2.Compensation of Kshs.65,550.00 (three months' salary)
- 3.Notice pay of Kshs.43,700.00
- 4.Bonus payment of Kshs.5,700.00
- 5.Severance pay of Kshs.87,400.00
- 6.Costs of the suit to the Claimant
- 7.Interest on notice pay, bonus and severance pay at court rates
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; claim for unfair termination and terminal dues)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Ngowah v East Africa Safari Air Express Limited [2015] KEELRC 840 (KLR)", Case Analysis (2015). Cause No. 2258 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/840/eng@2015-06-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.