Kenya Union of Commercial Food & Allied Workers v Reli Co-operative Savings & Credit Society Ltd [2016] KEELRC 1799 (KLR)
The bottom line
#A Kenyan court ruled an employee validly took early retirement under her CBA, awarding her over Kshs 1 million despite short notice.
What this practically means
#Executive summary
#Key legal issues
#Whether the Grievant's early retirement had a contractual foundation under clause 6B of the CBA
Yes - the Grievant, having served 12 years and being aged 44, qualified for special early retirement under clause 6B; the purported letter of 4 January 2014 treating her as having forfeited her appointment was of no legal consequence
The undisputed facts showed the Grievant had served 12 years since 2001 and was 44 years old, satisfying clause 6B's threshold of ten years' service and age 40. She was therefore entitled to retire early on 3 months' notice. The Respondent's later letter forfeiting her appointment and desertion allegations were ineffective because the relationship had ended earlier. Although she gave only about two weeks' notice, inadequate notice did not invalidate the retirement; the employer's remedy was pay in lieu or a breach claim, which was never made.
Entitlement to severance pay, handshake and transport
Severance pay awarded as calculated by the Respondent (Kshs 939,240/-), plus handshake of Kshs 100,000/- and transport of Kshs 10,000/- as mutually agreed in clause 6B
Clause 6B(iv) provided for severance pay in cases of special early retirement and clause 6B(v) for pension. Although severance pay is statutorily a redundancy concept, the CBA used it in the early retirement scheme. The Respondent's own schedule of final dues showed entitlement to Kshs 939,240/-, and the court adopted that figure. The handshake and transport sums were mutually agreed contractual entitlements.
Legal principles established
#- An employee's failure to give the requisite contractual notice of early retirement does not invalidate the notice; the employer's remedy is to demand pay in lieu of notice or sue for breach
- Severance pay as a statutory term of art applies only in redundancy, but parties may provide for it contractually in early retirement schemes
Court orders
#- 1.Declaration that the Grievant validly retired early pursuant to a contractual provision (clause 6B of the CBA)
- 2.Award of severance pay of Kshs 939,240/- as calculated by the Respondent
- 3.Award of handshake of Kshs 100,000/-
- 4.Award of transport of Kshs 10,000/- (total Kshs 1,049,240/-)
- 5.The Respondent to recover the liabilities indicated in the final dues schedule (adjusted for pay in lieu of notice) but also pay the undisputed dues in the said schedule
- 6.Costs of Kshs 25,000/- awarded to the Union
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court over a trade dispute reported to the Cabinet Secretary, Labour and a rejected conciliator's recommendations
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Commercial Food & Allied Workers v Reli Co-operative Savings & Credit Society Ltd [2016] KEELRC 1799 (KLR)", Case Analysis (2016). Cause No 562 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1799/eng@2016-01-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.