Ignas Karingo Mghona & 4 others v Star of Hope International Foundation [2016] KEELRC 1612 (KLR)
The bottom line
#Kenya's Employment Court confirmed genuine redundancies still become unfair if employers skip Section 40 steps and fail to pay dues before termination.
What this practically means
#Executive summary
#Key legal issues
#Genuineness of redundancy
Redundancy was genuine, driven by a 50% cut in donor funding and the Respondent's perennial financial inability to meet its wage bill
The Respondent is a charitable NGO dependent on Swedish donor funding, supplemented only by poultry farming and minimal pupil fees. The Director testified funding was cut by 50% and insufficient to retain the Claimants. The Claimants' own testimony about pay agitation and boycotts reinforced the picture of an employer in financial distress. The Court therefore found operational reasons justified the redundancy, though its execution was procedurally flawed.
Procedural compliance under Section 40 of the Employment Act 2007
The procedure was flawed: notices issued on 31st May 2012 took effect the next day, with no 30-day notice, no tripartite consultation, and dues offered only after termination
Section 40 requires notice of not less than 30 days to the union and labour office, disclosure of reasons and extent of redundancy, consideration of selection criteria, and payment of severance pay, notice pay and outstanding leave before termination. The Respondent's notice was effective the following day and dues were to be collected after termination. Failure of these conditions rendered the termination unfair, attracting 9 months' salary compensation under Section 49.
Eligibility of the 3rd, 4th and 5th Claimants under the Wage Orders
The 3rd Claimant, though a Book-keeper, was equivalent to a General Clerk and covered by the Wage Order; the 4th and 5th Claimants, as private-school teachers, were not covered and their underpayment claims failed
The Wage Order of 2012 does not capture the term Book-keeper, but the Court held Chenye performed the role of a General Clerk entitled to Kshs. 13,214.60 monthly. The teachers negotiated their own packages, produced no CBA with KUDHEIHA covering teachers, and earned above the general minimum wage of Kshs. 8,579 for General Labourers. Their claims for higher rates had no foundation in law or fact and were rejected.
Limitation of claims for underpayment, annual leave and traveling allowance
Claims for terminal dues and underpayments are not statute-barred; the employer renews the accrual date each time the claim remains unpaid
The Respondent argued claims dating back years were statute-barred under Sections 68 and 69 of the Employment Act, but the Court found those provisions relate to insolvency of employers and do not apply. The Court endorsed a 3-year reasonable period for computing underpayments, noting the Claimants themselves restricted their claims to 3 years. The Claimants' unpaid dues accrued afresh with each passing period.
Legal principles established
#- Redundancy dues, including severance pay, notice pay and outstanding leave, must be paid before termination takes effect; failure to do so renders the termination unfair and unlawful
- Claims for terminal dues, underpayments, arrears of salary or accrued annual leave are not defeated by the passage of time; the employer renews the accrual date each time the claim remains unpaid
- Private-school teachers not covered by a wage order or CBA negotiate their own terms, and provided pay does not breach the general minimum wage, cannot claim higher rates based on individual market research
- A benefit legally conferred by an employer cannot be unilaterally withdrawn on the basis of lack of authorization unless shown to have been illegally conferred
Court orders
#- 1.A declaration that redundancy was justifiable but flawed in the procedure of its execution, and termination was therefore unfair
- 2.Payment of terminal dues and compensation: 1st Claimant Kshs. 737,159.30; 2nd Claimant Kshs. 182,269.80; 3rd Claimant Kshs. 464,087.60; 4th Claimant Kshs. 195,230; 5th Claimant Kshs. 96,576
- 3.The Respondent shall release to the Claimants their Certificates of Service
- 4.Sums awarded to be paid within 30 days of delivery of the Award
- 5.Interest at 14% per annum from the date of delivery of the Award, payable if the full amount remains unpaid within 30 days
- 6.Each party to meet their own costs of the litigation
- Jurisdiction invoked
- Employment and Labour Relations Act, Section 12; Industrial Court (Procedure) Rules 2010, Rule 27(1)(a)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers v Game on Solutions (K) Limited (Cause E081 of 2021) [2024] KEELRC 2790 (KLR)[2024] KEELRC 2790 (KLR)14 Nov 2024
- Jackson Kanigia Myagah v University of Nairobi [2022] KEELRC 324 (KLR)[2022] KEELRC 324 (KLR)14 Apr 2022
- Benedict Ojou Juma & 10 others v A. J. Pereira & Sons Limited [2016] KEELRC 180 (KLR)[2016] KEELRC 180 (KLR)13 Dec 2016applied
Cite this brief
#Cite this brief
Caselaw, "Ignas Karingo Mghona & 4 others v Star of Hope International Foundation [2016] KEELRC 1612 (KLR)", Case Analysis (2016). Cause Number 236 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1612/eng@2016-03-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.