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ELRCPartially AllowedCause No. 1621 of 2014· [2018] KEELRC 428 (KLR)

Joseph Titus Akong’o v Magnum Engineers & General Contractors Limited [2018] KEELRC 428 (KLR)

Employment and Labour Relations Court of Kenya
3 December 2018
1,692 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 that calling a dismissal 'redundancy' without following the redundancy law makes it unlawful, entitling the worker to compensation.

What this practically means

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Executive summary

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The claimant, a former employee of the respondent from 4th January 2011 until his termination by letter dated 14th May 2014, sued for wrongful and unlawful termination of employment and failure to pay terminal benefits, claiming one month's salary in lieu of notice, three years' leave allowance, service pay, house allowance, service gratuity, 12 months' compensation for unfair termination, and salary for the 24 months' unexpired term of his contract ending February 2016. The respondent denied the claim, contending that the termination was on grounds of redundancy following structured adjustments at the workplace, that all terminal dues were cleared, that leave was allowed and paid, and that house allowance was included in the daily pay. By agreement of 16th October 2018 the parties proceeded by written submissions, and the court framed three issues: whether the termination was wrongful, unfair and unlawful; entitlement to relief; and costs. The court agreed with the claimant that although the respondent displayed a notice of termination on grounds of redundancy, it did not apply the law on redundancy, including the requirements of section 40(1)(f) and (g) of the Employment Act, 2007, either in the termination process or in computing terminal benefits, and therefore found unlawful termination. The claim was allowed in part: the court awarded one month's salary in lieu of notice (Kshs.19,912.50), service pay of 15 days for each of three years (Kshs.29,868.75), and six months' compensation for unlawful termination (Kshs.119,475.00), totalling Kshs.169,256.25, with costs of the claim to the claimant. Other heads of claim, including leave allowance, house allowance, gratuity, and the 24 months' salary for the unexpired contract, were not granted.

Key legal issues

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01

Whether the termination of the claimant's employment was wrongful, unfair and unlawful

Holding

The termination was unlawful. Although the respondent issued a notice of termination on grounds of redundancy, it failed to apply the law on redundancy, including section 40(1)(f) and (g) of the Employment Act, both in the termination process and in computing terminal benefits.

Reasoning

The respondent relied on the letter of termination dated 14th May 2014 citing structural adjustments. The claimant submitted that the respondent failed to comply with section 40(1)(f) and (g) of the Employment Act, 2007, requiring one month's notice or pay in lieu and severance pay of not less than 15 days per completed year. The court agreed with the claimant, holding that the respondent displayed a redundancy notice but did not apply redundancy law in the process or in the computation of terminal benefits, and therefore found unlawful termination.

p. 3
02

Whether the claimant is entitled to the relief sought

Holding

Yes, but the court granted only part of the relief claimed: one month's salary in lieu of notice, service pay for three years, and six months' compensation for unlawful termination, totalling Kshs.169,256.25.

Reasoning

Having found unlawful termination, the court held the claimant entitled to relief. However, the court's final orders were narrower than the claims: it awarded one month's salary in lieu of notice (Kshs.19,912.50), service pay of 15 days per year for three years (Kshs.29,868.75), and six months' compensation for unlawful termination (Kshs.119,475.00). Heads such as leave allowance, house allowance, gratuity and the 24 months' salary for the unexpired contract were not granted.

p. 4
03

Who bears the costs of the claim

Holding

The respondent bears the costs of the claim.

Reasoning

The claimant having succeeded in establishing unlawful termination of employment, the court ordered that the costs of the claim be borne by the respondent as part of the final disposition.

p. 4

Legal principles established

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  • An employer who dresses a termination as redundancy but does not apply the statutory redundancy procedure under section 40 of the Employment Act effects an unlawful termination.
  • An employee who wins on unlawful termination of employment becomes entitled to the relief sought.

Court orders

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  1. 1.One month's salary in lieu of notice of Kshs.19,912.50
  2. 2.Service pay of 15 days for every year of service, computed as 15/30 x 19,912.50 x 3, i.e. Kshs.29,868.75
  3. 3.Six months' compensation for unlawful termination of employment at Kshs.19,912.50, i.e. Kshs.119,475.00
  4. 4.Total award of Kshs.169,256.25
  5. 5.The costs of the claim to be borne by the respondent

Authorities

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Legislation

  • Employment Actsection 40(1)(f) and (g)

Cases cited (2)

  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Tobias Ongaya Auma & 5 others v Kenya Airways
    [2007] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act over disputes arising from employment (Employment Act, 2007)

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, "Joseph Titus Akong’o v Magnum Engineers & General Contractors Limited [2018] KEELRC 428 (KLR)", Case Analysis (2018). Cause No. 1621 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/428/eng@2018-12-03

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