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ELRCDismissedCause No. 1904 of 2015 (Notice of Motion dated 22nd December 2015)· [2016] KEELRC 1552 (KLR)

Communication Workers Union of Kenya (COWU) v Telkom (K) Limited [2016] KEELRC 1552 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
8 March 2016
HWHellen Wasilwa
4,343 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled Telkom Kenya could proceed with redundancy because it consulted the union and met the legal standards in Section 40.

What this practically means

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Executive summary

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The Communication Workers Union filed a Notice of Motion dated 22 December 2015 seeking an ex parte and later inter partes injunction restraining Telkom Kenya Limited from commencing or continuing a redundancy exercise affecting unionisable staff pending hearing of the main suit. The Union argued that the Respondent had abandoned ongoing consultations on redundancy packages contrary to Clause 25 of the CBA and Article 41 of the Constitution, terminating discussions by a letter of 16 December 2015 before agreement on severance pay and golden handshake. The Respondent countered that redundancy was its prerogative as employer, that the redundancy was genuine (driven by technological change, PwC findings on labour cost inefficiencies and five years of losses), that it had complied with Section 40 of the Employment Act, and that it was under no obligation to accept the Union's proposals, which exceeded its Kshs 710 million budget. It warned that delaying the redundancy would jeopardise a share sale transaction and risk all 1,641 jobs. The court framed two issues: whether adequate consultations occurred, and whether the Respondent was acting within the law. It found that consultations did occur - the parties met on 8 and 14 December 2015 and ceded ground - and that failure to agree did not negate consultation. It further found the Respondent's proposal met Section 40 requirements, noting the offered 30 days' severance per year exceeded the statutory 15 days. The court dismissed the application, ruling the redundancy could continue so long as the law was observed, and allowed the Union to seek an early hearing date for the main case. No costs order was recorded.

Key legal issues

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01

Whether adequate consultations on the redundancy took place

Holding

Consultations did occur; the parties met in three meetings and discussed the issues, each ceding ground, so consultation was given a chance notwithstanding that they did not fully agree

Reasoning

The court reviewed the chronology: the Respondent proposed a Transformation Plan with redundancy on 30 November 2015; the Union countered; meetings were held on 8 and 14 December 2015 under FKE chairmanship in which both sides adjusted their positions on severance pay and golden handshake. The court found the parties met, discussed, and ceded ground, which satisfied the requirement of consultation even without full agreement.

p. 8
02

Whether the Respondent was acting within the law in intending to declare staff redundant

Holding

The Respondent's proposal met the requirements of Section 40 of the Employment Act, and the orders sought could not be granted unless the Respondents went against the law

Reasoning

The court set out the conditions in Section 40 of the Employment Act 2007, including notification of the union and labour officer one month in advance, payment of leave in cash, one month's notice or wages in lieu, and severance pay at not less than fifteen days' pay per completed year of service. It found the Respondent's offer of 30 days' severance per completed year exceeded the statutory minimum and that the redundancy was genuine, driven by technological change, inefficiencies identified by PwC, and lack of profitability.

p. 9

Legal principles established

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  • Consultation on redundancy is satisfied where the parties meet and discuss the issues even if they do not fully agree with each other's proposals; failure to agree does not mean there was no consultation
  • An employer may proceed with a redundancy exercise provided the requirements of Section 40 of the Employment Act are observed

Court orders

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  1. 1.The application dated 22nd December 2015 seeking an injunction to restrain the redundancy was not granted
  2. 2.A ruling that the redundancy exercise should continue so long as the law is being observed
  3. 3.The Applicants may proceed and seek an early date for the hearing of the main case

Authorities

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Legislation

  • Industrial Court ActSection 4(1)
  • Constitution of KenyaArticle 41 (fair labour practices)
  • Constitution of KenyaArticle 2(6)
  • Labour Relations Act Cap 233Section 54(1)
  • Employment Act 2007Section 40(1)
  • ILO Convention No. 158 - Termination of Employment Convention 1982Article 13 of Recommendation 166
  • Collective Bargaining Agreement between the partiesClause 25

Cases cited (9)

  • George Onyango Akuti vs G4S Services LTD
    [2013] eKLR
  • Kenya Airways Limited vs Aviation & Allied Workers Union of Kenya & 3 others
    [2014] eKLR
  • Aoraki Corporation Limited vs. Collins Keith McGavin
  • Mornach Insurance Co. Ltd vs. Industrial Court & Another
    [2015] eKLR
  • BMD Knitting Mills (pty) LTD vs. South African Clothing & Textile Workers Union
    1998 (19) ILJ 1451 (LAC)
  • Transport & Allied Workers Union vs Societe Internationale De Telecommunications Aeronautiques
    [2011] eKLR
  • Giella vs Cassman Brown & Company Ltd
  • Churchill Ongalo vs Kenya Kazi Security Services
    [2014] eKLR
  • Oil Workers Union vs Kenya Petroleum Refineries Ltd & Others
    [2014] eKLR
Jurisdiction invoked
Section 4(1) of the Industrial Court Act No. 10 of 2011 - establishment of the Court to settle employment and industrial relations disputes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Communication Workers Union of Kenya (COWU) v Telkom (K) Limited [2016] KEELRC 1552 (KLR)", Case Analysis (2016). Cause No. 1904 of 2015 (Notice of Motion dated 22nd December 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1552/eng@2016-03-08

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