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ELRCDismissedCause 1859 of 2014· [2019] KEELRC 663 (KLR)

Josephine M. Ndungu & others v Plan International Inc [2019] KEELRC 663 (KLR)

Employment and Labour Relations Court
11 October 2019
10,188 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~41 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court upheld Plan International's 2014 redundancies, confirming employers may require affected staff to reapply for restructured jobs.

What this practically means

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Executive summary

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Seven claimants, all formerly employed by Plan International Inc, sued alleging that their 2014 termination on account of redundancy during an organisational restructuring was unfair, unlawful, discriminatory and defamatory, and sought 12 months' salary compensation and other damages. The respondent defended the suit, asserting that staff-raised management concerns and reduced funding justified a restructuring review undertaken by a consultant, that the resulting realignment abolished, amalgamated or downsized positions including those held by the claimants, that the claimants were advised to apply for the new or downsized positions but declined (with the 6th and 7th claimants resigning), and that all statutory notices and terminal dues under section 40 of the Employment Act were complied with. The court framed four issues: whether the termination was unfair and unlawful; whether the claimants were discriminated against; whether they were defamed; and whether they were entitled to the reliefs sought. The court found the restructuring justified and lawful, noting the report was approved by the majority of the CMT, the Country Director, Regional Director and ROMT, and that the Country Director could overrule the CMT under its charter. Section 40(1)(b) and (f) were complied with through six months' notice or pay in lieu, and the notice to the Cabinet Secretary instead of the local labour officer was held excusable. The selection criteria under section 40(1)(c) were deemed met since the claimants declined to reapply. Discrimination and defamation claims failed for want of proof. The suit was dismissed with each party bearing their own costs.

Key legal issues

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01

Whether the redundancy was justified (valid reason)

Holding

The restructuring and resulting redundancy were justified and lawful, based on staff-raised issues of structure and reduced funding, with the report approved by CMT majority, the Country Director, Regional Director and ROMT

Reasoning

The court found the respondent faced organisational difficulties raised by staff and reduced donor funding, justifying the review. The consultant was competitively picked, and the report was approved by the majority of the CMT, Country Director, Regional Director and ROMT; even a CMT rejection could be overruled by the Country Director under the CMT Charter. The claimants declined to reapply for available positions, so the employer was justified in laying them off.

p. 8
02

Whether the statutory procedure under section 40 of the Employment Act was complied with

Holding

Section 40(1)(b) and (f) were complied with: claimants received six months' notice or salary in lieu, and the notice to the labour office, though addressed to the Cabinet Secretary, was an excusable error as the intended statutory purpose was served

Reasoning

The claimants received individual redundancy notices and the respondent's policy manual entitled them to six months' notice or payment in lieu. The notice was served on the Cabinet Secretary rather than the labour officer in charge of the area, and not on the Kilifi labour office, but the court held the error excusable since the notice reached the correct government office of Labour and the statutory purpose was served.

p. 9
03

Whether the selection criteria under section 40(1)(c) were met

Holding

Section 40(1)(c) was complied with because the claimants were advised to reapply for the new or downsized positions and declined, thereby opting to exit through redundancy

Reasoning

The employer advertised the new and downsized positions and advised the claimants to apply. Their refusal meant they could not be considered for the jobs, and the employer could not force appointment on the 6th and 7th claimants who resigned. Had they applied, the statutory criteria of seniority, skill and ability would have applied to selection.

p. 10
04

Whether the claimants were discriminated against

Holding

The discrimination claim failed; the claimants were treated like all other staff during the restructuring and redundancy exercise

Reasoning

In light of the finding that the restructuring and redundancy were justified and procedurally fair, the court held the discrimination claim lacked merit. The evidence showed the claimants' views were sought, they received the same memos, redundancy notices and dues computed the same way as other staff.

p. 11
05

Whether the claimants were defamed

Holding

No defamation was established; no evidence of publication to third parties lowering the claimants' reputation

Reasoning

The claimants alleged defamation through disciplinary proceedings and removal from committees or bank signatory status, but no third-party evidence of publication was adduced. Membership of committees and bank signatory status are at the employer's discretion, and an employer is entitled to investigate suspected misconduct; being cleared after investigation does not found a defamation claim.

p. 11

Legal principles established

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  • The burden of proving unfair termination lies with the employee, who must establish a prima facie case, whereupon the employer assumes the burden of justifying the reason and proving fair procedure
  • Where restructuring is done to ensure operational efficiency, an employer may require employees in affected positions to reapply for the new or downsized positions, and failure to apply means the employee has chosen to exit through redundancy
  • An employee cannot sue an employer for defamation merely because disciplinary proceedings resulted in a finding of innocence

Court orders

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  1. 1.The suit is dismissed
  2. 2.Each party to bear his or her own costs

Authorities

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Legislation

  • Employment Actsection 40(1)(a)-(g), 40(2), 40(3)
  • Employment Actsection 45, 45(2)
  • Employment Actsection 43(1)
  • Employment Actsection 47(5)
  • Defamation Actsection 3
  • Constitution of KenyaArticle 41
  • Constitution of KenyaArticle 10
  • ILO Recommendation No. 166 on Termination of EmploymentArticle 23
  • Respondent's People & Culture Policies and Procedures Manual November 2008Clause 110.3

Cases cited (10)

  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Rose Wangui Mambo & 2 Others v Limuru Country Club & 15 Others
    [2014] eKLR
  • Peter K. Waweru v Republic
    [2006] eKLR
  • Ezekiel Nyangoya Okemwa v Kenya Maritime & Fisheries Research Institute
    [2016] eKLR
  • Aoraki Corporations Limited v Collin Keih Mc Gavin
    CA 2 of 1997 [1998] 2 NZLR 278
  • G.N. Hale & So Ltd v Wellington Caretakers IUW 4
  • Kenya Airways Corporation Ltd v Tobias Oganya Auma & 5 Others
  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    [2013] eKLR
  • Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
    [2018] eKLR
  • Miguna Miguna v Standard Group Limited & 4 others
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, section 40, 43, 45, 47(5))

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Josephine M. Ndungu & others v Plan International Inc [2019] KEELRC 663 (KLR)", Case Analysis (2019). Cause 1859 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/663/eng@2019-09-11

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