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ELRCPartially AllowedStatement of Claim filed 03.06.2014 (cause number not stated in judgment)· [2018] KEELRC 1992 (KLR)

Grace Itunga v Commonwealth War Graves Commission [2018] KEELRC 1992 (KLR)

Employment and Labour Relations Court
18 May 2018
2,471 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled the redundancy was genuine, but the employer still lost for skipping the mandatory one-month redundancy notice to the employee and labour officer.

What this practically means

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Executive summary

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The claimant, employed by the Commonwealth War Graves Commission from 26.06.2000 to 30.05.2013 and last serving as Administrator of its Kenyan offices, was terminated on account of redundancy following a worldwide restructuring that saw IT functions merged and accounting relocated to the UK. She sued seeking a declaration of wrongful dismissal, reinstatement or compensation for the residue of her contract to retirement age, damages and costs. The court framed two principal issues: the validity of the reason for termination and compliance with the redundancy procedure in section 40 of the Employment Act, 2007. On the first, the court held the redundancy was valid and genuine, being a genuine restructuring aimed at better economy and efficiency, and the claimant did not dispute it or her lack of the new competencies. On the second, the court found the respondent failed to serve the statutory one month notice on the labour officer and the claimant, and that the 30.05.2013 letter could not serve as both redundancy notice and termination letter; pay in lieu of notice could not cure the defect. The termination was therefore procedurally unfair. Following Ndolo J in Charles Nyangi Nyamohanga v Action Aid Kenya, the court emphasised the two distinct notices required in redundancy. Weighing aggravating factors (stress, trauma, hospitalisation; 13 years' clean service; no contribution to termination) against the termination indemnity paid, the court awarded 8 months' salaries, Kshs.1,429,560.00, with interest on default and costs. Reinstatement and payment of salaries up to retirement age were refused as unjustified.

Key legal issues

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01

Validity of the reason for termination (redundancy)

Holding

The reason for termination was valid and genuine

Reasoning

The court found the respondent was restructuring its Nairobi office in view of a computerised accounting system to be hosted in the UK, aimed at better economy and efficiency. The claimant did not dispute the reason nor that she lacked the relevant competencies for the changing workload. The reason related to the claimant's compatibility and the respondent's operational requirements, satisfying section 43 read with section 45(2)(a) and (b) of the Employment Act.

p. 3
02

Compliance with the redundancy procedure under section 40 of the Employment Act

Holding

The procedure was not complied with; termination was procedurally unfair

Reasoning

Section 40(1) required the respondent to notify the employee and the labour officer not less than one month before the intended termination. The respondent failed to notify the labour officer, and although consultations were underway, the one month notice was never served. The letter of 30.05.2013 could not serve as both redundancy notice and termination letter. Pay in lieu of notice could not cure the procedural defect.

p. 3
03

Appropriate compensation for unfair termination

Holding

8 months' salaries in compensation awarded

Reasoning

Under section 49 of the Employment Act, 12 months' salaries is the maximum but discretionary. The claimant served about 13 years with a clean record, suffered stress, trauma and hospitalisation from the mishandled process, and did not contribute to her termination. Balancing the mitigating factor of the termination indemnity paid, the court awarded 8 months' salaries at Kshs.178,695.00 per month, totalling Kshs.1,429,560.00.

p. 3

Legal principles established

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  • A redundancy requires service of one month's notice to the employee and the labour officer under section 40 of the Employment Act before termination; payment in lieu of notice does not cure non-service of the statutory notice
  • A letter of termination on account of redundancy cannot simultaneously serve as the redundancy notice and the termination notice

Court orders

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  1. 1.Declaration that the termination was procedurally unfair as it was abrupt, the one month notice in section 40 of the Employment Act, 2007 not having been served upon the labour officer and the claimant
  2. 2.The respondent to pay the claimant Kshs.1,429,560.00 by 01.07.2018, failing interest to run thereon at court rates from the date of judgment till full payment
  3. 3.The respondent to pay the claimant's costs of the suit
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute); no specific constitutional provision invoked

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, "Grace Itunga v Commonwealth War Graves Commission [2018] KEELRC 1992 (KLR)", Case Analysis (2018). Statement of Claim filed 03.06.2014 (cause number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1992/eng@2018-05-18

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