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ELRCPartially AllowedCause No 1991 of 2012· [2015] KEELRC 981 (KLR)

Charles Nyangi Nyamohanga v Action Aid International [2015] KEELRC 981 (KLR)

Employment and Labour Relations Court of Kenya
5 June 2015
LNLINNET NDOLO
1,974 words in judgment
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The bottom line

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Kenya's Employment Court ruled a redundancy was unfair because the employer skipped the mandatory one-month notice to the employee and Labour Officer, and a signed discharge form couldn't fix it.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as Programme Coordinator from 6th April 2010 at a monthly basic salary of Kshs.111,258.00 plus transport allowance, was declared redundant by letter dated 15th March 2011, with termination effective 31st March 2011. He sued for a declaration of wrongful termination, reinstatement or, in the alternative, Kshs.3,003,966.00 in terminal benefits or twelve months' salary as compensation for unfair redundancy, plus costs and interest. The Respondent admitted the employment but justified the redundancy as arising from a restructuring of its Kenya programmes, paid the Claimant Kshs.329,995.20 as final dues upon signing a discharge, and denied refilling the position. The court, framed two issues: the lawfulness and fairness of the redundancy, and entitlement to remedies. Applying Section 40 of the Employment Act, 2007, the court found the Respondent failed to give the mandatory one-month notice to the employee and the Labour Officer, the entire transaction taking less than a month, rendering the termination unfair under Section 45. The court further held that the discharge signed by the Claimant could not cure the illegality. Reinstatement was declined because the position no longer existed and the Claimant was employed elsewhere; the terminal benefits claim was dismissed for want of proof. The court awarded three months' salary, Kshs.351,774.00, plus costs and interest at court rates from the date of the award until payment in full.

Key legal issues

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01

Whether the declaration of redundancy was lawful and fair

Holding

The redundancy was unfair because the Respondent did not give the one-month notice to the employee and Labour Officer as required by Section 40 of the Employment Act; the entire transaction took less than a month and the Labour Officer was not notified.

Reasoning

The court applied Section 40 of the Employment Act, 2007, which prescribes conditions precedent to redundancy. Since the Claimant was not a union member, conditions (a) and (d) did not apply, and his dues were paid. However, the Claimant first learnt of the redundancy on 11th March 2011 and received termination notice on 15th March 2011 to take effect on 31st March 2011 - less than a month overall - and the Labour Officer was never notified. Citing Francis Maina Kamau v Lee Construction, the court held the termination unfair under Section 45.

p. 4
02

Effect of the discharge/indemnity signed by the Claimant on receipt of final dues

Holding

The discharge clause could not bar the claim; an employer cannot circumvent statutory obligations by relying on a signed discharge form.

Reasoning

The Respondent argued that the Claimant's signed indemnity stating he had no further claims defeated the suit. Relying on its earlier decision in Simon Muguku Gichigi v Taifa SACCO Limited, the court held that where an employer fails to follow the law in effecting a redundancy, no discharge can cure the resulting illegality, and advised Human Resource Managers to concentrate on legal compliance rather than drafting discharge forms.

p. 4
03

Whether the position was filled after the Claimant's departure

Holding

The allegation was unsupported by evidence and denied by the Respondent.

Reasoning

The Claimant alleged the redundancy was coloured by malice because his position was filled soon after his departure. The court found no evidence to support this allegation, which the Respondent denied, and accordingly rejected it as a ground of attack on the redundancy.

p. 3

Legal principles established

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  • Where an employer declares a redundancy without observing the conditions set out under Section 40 of the Employment Act, the redundancy becomes an unfair termination within the meaning of Section 45 of the Act.
  • There are two distinct notices in redundancy: the one-month notification of reasons and extent to the employee and labour officer, and the termination notice under the contract; they cannot be issued simultaneously.
  • A discharge clause signed by an employee cannot cure an employer's failure to comply with the law in a redundancy termination.

Court orders

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  1. 1.Declined to order reinstatement
  2. 2.Awarded the Claimant Kshs.351,774.00 being three (3) months' salary in compensation for unfair termination of employment
  3. 3.Awarded the Claimant the costs of the case
  4. 4.Award amount to attract interest at court rates from the date of the award until payment in full

Authorities

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Legislation

  • Employment ActSection 2
  • Employment ActSection 40
  • Employment ActSection 45
  • Labour Relations ActSection 2 (corresponding definition of redundancy)

Cases cited (2)

  • Francis Maina Kamau Vs Lee Construction
    [2014] eKLR
  • Simon Muguku Gichigi Vs Taifa SACCO Limited
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (unfair termination/redundancy claim)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (14)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Charles Nyangi Nyamohanga v Action Aid International [2015] KEELRC 981 (KLR)", Case Analysis (2015). Cause No 1991 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/981/eng@2015-06-05

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