Charles Okwany & 10 others v Corn Products Kenya Limited [2018] KEELRC 287 (KLR)
The bottom line
#A Kenyan court confirmed that employers who follow the legal redundancy steps - notice, leave pay, and severance - cannot be successfully sued for unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination on account of redundancy was unfair and unlawful
The redundancy was lawful; claimants received one month notice, paid leave and severance pay, and signed releases
The court applied Section 40(1) of the Employment Act. Redundancy notices were served on 23/7/2012 and termination letters issued a month later, satisfying the notice requirement. Terminal dues including leave and severance pay were set out in termination letters and paid, and claimants signed a released discharge. The statutory conditions for a fair redundancy were therefore met.
Whether severance pay required recalculation
No; the statutory formula of 15 days salary per year worked was correctly applied
The claimants sought a formula of salary multiplied by 12 times years worked minus amounts paid. The court held this formula is unknown and alien to the process, as Section 40 fixes severance at not less than 15 days pay for each completed year of service, which the respondent had already paid.
Whether claimants were entitled to gratuity despite receiving pension
Not entitled; membership of a pension scheme and NSSF excludes service pay under Section 35(6)
Under Section 35(6) of the Employment Act, employees who are members of a pension scheme, NSSF or a service pay scheme established under a CBA are not entitled to service pay. The claimants admitted membership of the pension fund and receipt of pension, so gratuity over and above pension was not warranted.
Legal principles established
#- Compliance with Section 40(1) of the Employment Act - due notice, payment of leave and severance pay - renders a redundancy lawful and fair
- Severance pay on redundancy is calculated at 15 days salary for each completed year of service
- Employees who are members of a pension scheme or NSSF are not entitled to service pay/gratuity under Section 35(6) of the Employment Act
Court orders
#- 1.Claimants' case dismissed
- 2.Each party to pay its own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act / ELRC Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Charles Okwany & 10 others v Corn Products Kenya Limited [2018] KEELRC 287 (KLR)", Case Analysis (2018). Cause No. 1973 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/287/eng@2018-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.