Ndombi Georgina Ngina v Ecobank Kenya Limited [2018] KEELRC 1227 (KLR)
The bottom line
#A Kenyan employer with a valid redundancy reason still had to pay because it skipped mandatory written notice to the employee and labour officer.
What this practically means
#Executive summary
#Key legal issues
#Validity of the reason for redundancy
The retrenchment was for a valid reason because the Claimant's position was abolished and she lacked the education and competence for the new CEM role
RW1 testified that the Domestic Bank Department was scrapped and replaced by client engagement managers requiring a new role, new grading and new key performance indicators. The Claimant lacked the required educational background. The court found it prudent and reasonable to declare her redundant, upholding the substantive fairness of the decision.
Procedural compliance with section 40 of the Employment Act
The Respondent failed to comply with the mandatory notice requirements of section 40(1)(b) and the spirit of section 40(1)(c), rendering the redundancy unprocedural
The Respondent admitted no notice was specifically addressed to the Claimant or the labour office before the position was declared redundant; the labour office was notified only after the Claimant had left. The Claimant was also denied an audience on selection criteria and re-deployment, was treated rudely and escorted out like a criminal, violating sections 40, 41 and 45.
Entitlement to notice pay
The contract entitled the Claimant to three months' notice; having been paid one month, she was awarded the balance of two months
The court found on a balance of probabilities that the letter of appointment provided three months' termination notice. Since only one month's salary was paid in lieu, the shortfall of two months was awarded at the contractual monthly rate.
Severance pay claim
The claim for severance at three months per year was dismissed because service gratuity at one month per year already satisfied section 40(1)(g)
The court held that the Respondent had already paid service gratuity calculated at one month's salary for each completed year of service, which met the statutory minimum for severance under section 40(1)(g). The claim for a higher rate was therefore not proved and was dismissed.
Legal principles established
#- Redundancy is valid where the position held by the employee has been abolished and the employee lacks the competence for the new position
- An employer must notify the employee personally in writing and the labour officer before declaring a non-unionised employee redundant, as section 40(1)(b) speaks in mandatory terms
- Procedural failure in a redundancy entitles the employee to compensation under section 49 even where the redundancy is substantively valid
Court orders
#- 1.Five (5) months in compensation for the unprocedural declaration of redundancy in the sum of Kshs. 1,528,820
- 2.Two months notice pay Kshs. 611,408
- 3.Unpaid allowances as at the time of termination Kshs. 58,753
- 4.Provision of certificate of service within 30 days of the judgment
- 5.Interest at court rates from date of filing suit in respect of (ii) & (iii) above and from date of judgment in respect of (i) above till payment in full
- 6.The Respondent to pay costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (Employment Act, 2007 claims)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ndombi Georgina Ngina v Ecobank Kenya Limited [2018] KEELRC 1227 (KLR)", Case Analysis (2018). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1227/eng@2018-08-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.