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ELRCPartially AllowedCause No. 18 of 2014· [2016] KEELRC 871 (KLR)

Albert Saina v B O G Moi Girls High School Eldoret [2016] KEELRC 871 (KLR)

Employment and Labour Relations Court of Kenya at Kisumu
23 June 2016
2,042 words in judgment
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The bottom line

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A Kenyan school's redundancy was ruled unlawful because it skipped notifying the worker and labour office a month in advance, and it had underpaid the employee.

What this practically means

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Executive summary

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The claimant, employed by the respondent school in January 2008 and deployed as an electrician, was declared redundant by letter dated 1st February 2013 following a Board resolution to replace him with a multi-tasking artisan and outsource electrical work. He sued claiming unfair redundancy, underpayment below statutory minimum wages, unpaid house and commuter allowance, and leave pay, invoking Articles 41(1), 28, 47, 48 and 50(1) of the Constitution. The respondent defended the redundancy as lawful, undertaken per its Human Resources Manual, with payment of two months' salary in lieu of notice and severance at 15 days per completed year. The court framed two issues: whether the redundancy was unfair and whether the claimant was entitled to the prayers sought. It held the employer bound by both section 40 of the Employment Act and the Human Resources Manual; the failure to notify the claimant and the Labour Officer at least one month before the redundancy, and the failure to give three months' notice, rendered the redundancy unlawful. However, it found no evidence that the claimant was victimised for demanding minimum wage. Applying section 26 of the Employment Act and section 48 of the Labour Relations Act, the court found the claimant underpaid against Artisan Grade 1 minimum rates for Eldoret and awarded arrears of wages and house allowance at 15% of basic from 2010, pay in lieu of redundancy notification, the balance of notice pay, and the severance balance. Commuter allowance and annual leave claims were rejected. Costs were awarded to the claimant.

Key legal issues

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01

Whether the redundancy of the Claimant was unfair

Holding

The redundancy was unlawful because the Respondent failed to notify the Claimant and the Labour Officer one month before the redundancy as required by section 40(1)(a) and (b) of the Employment Act, and failed to give three months' notice or pay in lieu as required by the Human Resources Manual.

Reasoning

The court set out section 40 of the Employment Act and clauses 5.9.3.3 to 5.9.4.2 of the Respondent's Human Resources Manual. It found the employer bound by both. The Claimant was not notified as required and was only paid two months' salary in lieu of the three months' notice provided in the manual. The court also found no evidence the Claimant was victimised for demanding minimum wage, though he had complained of underpayment by letters.

p. 3
02

Whether the Claimant was underpaid

Holding

The Claimant was underpaid; his salary was below the statutory minimum rates for Artisan Grade 1 in Eldoret, and severance and notice ought to have been calculated on the correct wage of Shs.18,219.30 plus 15% house allowance.

Reasoning

Relying on section 26 of the Employment Act and section 48 of the Labour Relations Act, the court held that wages order minimum rates are terms of the contract that cannot be varied by agreement. The gazetted rates for Artisan Grade 1 from 2010 to 2013 exceeded what the Claimant was paid, entitling him to arrears of wages and house allowance at 15% of basic since he was not housed.

p. 3
03

Whether the Claimant is entitled to the prayers sought

Holding

The court awarded pay in lieu of redundancy notification, pay in lieu of notice, the severance balance, wage underpayments and house allowance calculated from 2010, but rejected commuter allowance and annual leave claims.

Reasoning

The court quantified each head: Shs.20,952.20 for lack of statutory notification; Shs.35,956.60 as the balance of three months' notice pay under the manual and section 40(1)(f); Shs.26,498.25 as severance balance at 15 days per year for five years; wage and house allowance arrears computed from 2010. Commuter allowance had no legal basis and the Claimant was not owed leave having taken six months' leave before redundancy.

p. 5

Legal principles established

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  • An employer declaring redundancy must notify both the employee personally and the labour officer at least one month before the termination, failing which the redundancy is unlawful.
  • An employer is bound by both the statutory redundancy procedure in section 40 of the Employment Act and its own Human Resources Manual provisions on notice.
  • Payment below statutory minimum wages is prohibited and the wages order rates are read into the contract in substitution for inferior terms.
  • Severance pay and notice on redundancy must be calculated on the correct statutory minimum wage, inclusive of house allowance at 15% of basic where the employee was not housed.
  • Failure to give the statutory notification attracts an award of one month's salary in lieu of notification.

Court orders

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  1. 1.Award of Shs.20,952.20 being pay in lieu of notification of redundancy
  2. 2.Award of Shs.35,956.60 being pay in lieu of notice (Shs.62,856.60 less Shs.26,900 already paid)
  3. 3.Award of Shs.26,498.25 being balance of severance pay (Shs.45,548.25 less Shs.19,050 paid)
  4. 4.Award of Shs.69,104.00 for underpayment of wages January 2010 to April 2011
  5. 5.Award of Shs.69,708.00 for underpayment of wages May 2011 to April 2012
  6. 6.Award of Shs.68,573.70 for underpayment of wages May 2012 to February 2013
  7. 7.Award of Shs.34,365.60 house allowance January 2010 to April 2011
  8. 8.Award of Shs.28,996.20 house allowance May 2011 to April 2012
  9. 9.Award of Shs.24,596.10 house allowance May 2012 to February 2013
  10. 10.Respondent to pay Claimant's costs of the suit
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (claim for unfair redundancy and underpayment under the Employment Act and Articles 41(1), 28, 47, 48 and 50(1) of the Constitution)

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, "Albert Saina v B O G Moi Girls High School Eldoret [2016] KEELRC 871 (KLR)", Case Analysis (2016). Cause No. 18 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/871/eng@2016-06-23

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