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ELRCAllowedNot stated in judgment· [2016] KEELRC 227 (KLR)

Samuel Amenya v Craft Silicon Limited [2016] KEELRC 227 (KLR)

Employment and Labour Relations Court
2 December 2016
MNMathews Nderi Nduma
1,387 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that paying an employee off doesn't excuse an employer from giving one month's redundancy notice — and the employer paid nearly Kshs. 2 million for skipping it.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 2003 (re-employed in February 2007 as project manager and head of the quality assurance department from 2009), received a letter dated 1st August 2011 terminating his employment with immediate effect because management had decided to disband the quality and assurance department for operational reasons. He earned a gross salary of Kshs.236,670. The respondent paid Kshs.197,406 covering one month's salary in lieu of notice, nineteen days' untaken leave, and statutory deductions, but did not give one month's notice of the redundancy to the claimant or the Labour office, made no offer of terminal benefits in the letter, and did not copy it to the Ministry of Labour. The court framed two issues: whether the termination was a redundancy and whether section 40 of the Employment Act, 2007 was complied with; and whether the claimant was entitled to the reliefs sought. The court found the termination was genuinely a redundancy by abolition of office, but the mandatory requirements of section 40 - one month's notice to the employee and Labour office, consultation on selection criteria - were not met, and payment in lieu of notice and leave could not cure that failure. The termination was therefore unlawful and unfair, violating section 45. Judgment was entered for the claimant: Kshs.478,070.97 as severance pay for each completed year of service and welfare dues, and Kshs.1,420,020 being six months' salary as compensation under section 49(1)(c) as read with section 49(4), with interest at court rates from filing and costs of the suit.

Key legal issues

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01

Whether the termination was a redundancy and whether section 40 was complied with

Holding

It was a redundancy by abolition of office, but section 40 was not complied with; termination unlawful and unfair

Reasoning

The termination letter gave as its only reason the disbandment of the quality assurance department which the claimant headed, bringing it within the section 2 definition of redundancy. However, no one month notice was given to the employee or the Labour office, no selection criteria or consultations were shared, and the letter was not copied to the Ministry of Labour. Payment of leave and notice pay could not cure these omissions.

p. 3
02

What remedies flow from the unlawful and unfair redundancy

Holding

Severance pay for each completed year of service plus welfare dues (Kshs.478,070.97) and six months' salary as compensation under section 49(1)(c) as read with 49(4)

Reasoning

The claimant served four years with no adverse record, did not contribute to the termination, lost career prospects and livelihood, was not paid terminal dues at termination, and waited over five years. These factors justified the maximum-ish award of six months' gross salary of Kshs.236,670, totalling Kshs.1,420,020.

p. 4

Legal principles established

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  • Payment in lieu of notice and leave dues does not relieve an employer of the mandatory obligation to give one month's notice of redundancy to the employee and the Labour office
  • A termination on account of redundancy must strictly comply with section 40 of the Employment Act, otherwise it is unlawful and unfair under section 45

Court orders

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  1. 1.Payment by the respondent to the claimant of Kshs.1,898,090.97
  2. 2.Interest on the award at court rates from date of filing suit till payment in full
  3. 3.Costs of the suit

Authorities

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Legislation

  • Employment Actsection 2
  • Employment Actsection 40
  • Employment Actsection 45
  • Employment Actsections 49(1)(c) and 49(4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Samuel Amenya v Craft Silicon Limited [2016] KEELRC 227 (KLR)", Case Analysis (2016). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/227/eng@2016-12-02

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