Agnes Wachu Wamae & 104 others v Barclays Bank of Kenya [2018] KEELRC 857 (KLR)
The bottom line
#A Kenyan court ruled Barclays could not cap redundancy severance at 16 years, awarding 105 former employees full severance for every year worked.
What this practically means
#Executive summary
#Key legal issues
#Whether an employer may cap the number of years of service for severance pay under an enhanced exit package
The cap of 16 years was unlawful and discriminatory; the Claimants are entitled to 1.5 months' pay for each completed year of service as claimed
The court held that while section 40 of the Employment Act permits payment above the statutory minimum of 15 days per completed year, an employer cannot arbitrarily cap the years of service. The cap unjustly benefited employees with less than 16 years of service, deprived those with more than 16 years of their lawful entitlement, and amounted to discrimination under section 5(3) of the Employment Act and Article 41(1) of the Constitution. The discrimination definition in ILO Convention No. 111 was applied.
Whether the Claimants were entitled to payment in lieu of full annual leave for 2011
Claim dismissed; Claimants had been paid prorata leave up to the exit date
The exit date was 31st January 2011. The Claimants had already been paid prorata leave up to that date and could not claim full annual leave for the year 2011. The claim was found to have no merit and was dismissed.
From what date interest should be calculated on any award
Interest at court rates from 31st January 2011, the date of exit
Having found the Claimants entitled to severance pay for each completed year of service, the court awarded interest at court rates running from 31st January 2011, the date all Claimants exited the Respondent's service, until payment in full.
Legal principles established
#- Section 40 of the Employment Act is mandatory but an employer may pay severance at a rate above the statutory minimum of 15 days pay per completed year of service
- An employer may not arbitrarily cap the number of years of service to which severance pay applies, as doing so discriminates against long-serving employees contrary to section 5(3) of the Employment Act and Article 41(1) of the Constitution
Court orders
#- 1.Payment at one and a half (1.5) months salary for each completed year of service by each one of the Claimants, as set out in the statement of claim and annextures thereto within 30 days of this judgment
- 2.The Claims for payment in lieu of leave for the year 2011 are dismissed
- 3.The awards are payable with interest at court rates from 31st January, 2011, the date of exit, to payment in full
- 4.The Respondent to pay costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Agnes Wachu Wamae & 104 others v Barclays Bank of Kenya [2018] KEELRC 857 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/857/eng@2018-10-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.