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ELRCPartially AllowedCause No 628 of 2014· [2016] KEELRC 232 (KLR)

James Maoga Osiemo v Laminate Tube Industries Limited [2016] KEELRC 232 (KLR)

Employment and Labour Relations Court
9 December 2016
790 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled an employer's redundancy was unfair because it never notified the local labour officer, awarding the worker seven months' pay.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nakuru (Radido Stephen, J) determined whether the termination of James Maoga Osiemo's employment by Laminate Tube Industries Ltd was unfair and, if so, the appropriate remedies. The claimant was dismissed on 31 December 2013, with the respondent citing reduced business/downsizing and paying one month's salary in lieu of notice, though the termination letter invoked a contractual termination-without-cause clause without stating a reason. The court characterised the termination as a redundancy, thereby engaging section 40 of the Employment Act, 2007. It found the respondent had not complied with the statutory conditions, particularly notification of the local labour officer in writing and in advance, and on that single ground held the termination procedurally unfair. On substantive fairness, the court made obiter observations that redundancy must be based on operational requirements rather than misconduct, and expressed doubt that a termination-without-cause clause can survive the statutory framework of sections 43 and 45 of the Employment Act, 2007, distinguishing the respondent's authority (Delmonte) as predating the 2007 Act. On remedies, the court refused wages for January 2014, pay in lieu of notice and gratuity as already paid, and awarded compensation equivalent to 7 months' gross wages (Kshs 74,060/-) based on approximately six years of service and a pleaded gross monthly wage of Kshs 10,580/-. The claimant was awarded costs. Judgment delivered in Nakuru on 9 December 2016.

Key legal issues

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01

Procedural fairness of redundancy termination

Holding

Termination was procedurally unfair because the local labour officer was not informed in writing and in advance as required by section 40

Reasoning

The court characterised the termination as one of redundancy despite the respondent invoking a termination-without-cause clause. Section 40 conditions therefore applied. The respondent failed to demonstrate compliance, particularly the mandatory notification of the local labour officer in writing and in advance, and that single failure sufficed to render the termination procedurally unfair.

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02

Reliance on a termination without cause clause

Holding

Doubtful that such a clause is valid under the Employment Act, 2007

Reasoning

The court observed obiter that sections 43 and 45 of the Employment Act, 2007 oblige an employer to prove reasons for termination and their validity and fairness, undermining contractual termination-at-will clauses. The Delmonte authority relied on by the respondent predated the 2007 Act and concerned a 2005 dismissal.

p. 2
03

Appropriate compensation

Holding

Equivalent of 7 months gross wages (Kshs 74,060/-) awarded based on about 6 years of service

Reasoning

Having found procedural unfairness, the court exercised discretion under the remedies framework, considering length of service of about 6 years. The claimant's gross monthly wage was taken as pleaded at Kshs 10,580/- despite absence of produced pay slips, yielding 7 months' compensation of Kshs 74,060/-.

p. 2

Legal principles established

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  • Termination on account of redundancy engages section 40 of the Employment Act, 2007, including informing the local labour officer in writing and in advance; non-compliance renders termination procedurally unfair.
  • Redundancy should be based on operational requirements, not misconduct.
  • It is doubtful whether an employer can rely on a termination without cause clause under the Employment Act, 2007 framework.

Court orders

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  1. 1.Declaration that termination of the Claimant's employment was on account of redundancy and was procedurally unfair
  2. 2.Respondent to pay the Claimant compensation of Kshs 74,060/- (equivalent of 7 months gross wages)
  3. 3.Claimant to have costs

Authorities

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Legislation

  • Employment Act, 2007section 40
  • Employment Act, 2007section 43
  • Employment Act, 2007section 45

Cases cited (1)

  • Joseph Ndambuki & 4 Ors v Delmonte (K) Limited
    (2012) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (not expressly cited in judgment)

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, "James Maoga Osiemo v Laminate Tube Industries Limited [2016] KEELRC 232 (KLR)", Case Analysis (2016). Cause No 628 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/232/eng@2016-12-09

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