Elizabeth Tumaini Adhola v Management Board of St. Mary’s School [2015] KEELRC 1547 (KLR)
The bottom line
#A Kenyan court ruled that calling a job cut a 'normal termination' doesn't excuse an employer from paying legally required redundancy benefits, even if the employee signed a settlement certificate.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was a redundancy within the meaning of the Trade Disputes Act, engaging Section 16A of the repealed Employment Act Cap 226
Yes; the termination followed a review revealing the school was over-manned and a decision to reduce staff numbers, and was therefore a redundancy requiring compliance with Section 16A (Section 6A(1)) conditions.
The court undertook a plain reading of the termination letter, identifying characteristics: it followed an in-depth review, aimed at improving performance and reducing expenses, revealed the school was grossly over-manned and led to staff reductions. These corresponded with the statutory definition of redundancy as loss of employment through no fault of the employee at the employer's initiative where services are superfluous. The employer's characterisation of the process as normal termination was rejected.
Whether the Defendant complied with the statutory redundancy procedure
No; the Defendant failed to notify the local labour office, failed to apply or disclose a valid selection criteria, and failed to pay severance pay, rendering the redundancy unlawful.
Although the Defendant paid three months' salary in lieu of notice and contractual terminal benefits including provident fund dues, it did not treat the process as a redundancy. It fell foul of Section 6A by not notifying the labour office, not discussing or disclosing the criteria for selection of affected employees, and not paying severance pay at 15 days per completed year. The redundancy was therefore not based on a valid criteria nor effected through a fair procedure.
Whether the exclusion clause and the clearance certificate extinguished the Plaintiff's statutory claims
No; neither the clause 26.1 supersession clause nor the clearance certificate could extinguish statutory benefits, being inconsistent with Section 6A.
The Respondent took over accrued employment obligations when the school changed hands, absent an exclusion clause. Clause 26.1 was held not to be an exclusion clause capable of extinguishing statutory benefits, and the clearance certificate executed in full and final settlement was incapable of extinguishing lawfully owed statutory benefits. Any such exclusion clause is unlawful to the extent of its inconsistency with Section 6A of Cap 226.
Legal principles established
#- A contractual exclusion clause or a clearance certificate signed in full and final settlement cannot extinguish statutory benefits owed to an employee under the redundancy provisions.
- A restructuring exercise that reduces staff numbers following a review of operations amounts to a declaration of redundancy attracting the statutory redundancy procedure.
Court orders
#- 1.Kshs.369,264.00 being severance pay calculated at fifteen (15) days salary for each completed year of service
- 2.Five (5) months salary being compensation for the unlawful and unfair termination of employment in the sum of Kshs.263,760.00
- 3.Total amount of Kshs.633,024.00
- 4.Costs of the suit to the Plaintiff
- 5.Decretal amount to attract interest at Court rates from the date of judgment till payment in full
- Jurisdiction invoked
- Transferred from the Chief Magistrate's Court, Milimani Commercial Courts, to the Industrial Court
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mwadime & 3 others v Polystar Plastiks Limited (Cause E040, E038, E039 & E041 of 2024 (Consolidated)) [2024] KEELRC 2793 (KLR)[2024] KEELRC 2793 (KLR)14 Nov 2024followed
Cite this brief
#Cite this brief
Caselaw, "Elizabeth Tumaini Adhola v Management Board of St. Mary’s School [2015] KEELRC 1547 (KLR)", Case Analysis (2015). Civil Suit No. 457 of 2007 (transferred to the Industrial Court). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1547/eng@2015-02-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.