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ELRCPartially AllowedEmployment and Labour Relations Cause (memorandum of claim filed 22.11.2013; amended 22.11.2015)· [2019] KEELRC 1115 (KLR)

Moses Ngumo v East African Breweries Limited [2019] KEELRC 1115 (KLR)

Employment and Labour Relations Court
19 July 2019
BOByram Ongaya
1,853 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 an EABL redundancy unfair because the employer skipped statutory notice, but awarded only two months' salary.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 09.04.2002 as a Service Delivery Manager, IT and promoted to various senior positions, received a one-month notice of intended redundancy on 22.10.2013 on account of restructuring, and his employment terminated on account of redundancy with effect from 22.11.2013 with a full redundancy package (salary and allowances, three months' pay in lieu of notice, accrued leave pay, and severance at 21 days' pay per completed year of service) and an enclosed certificate of service. The dispute arose against the background of a performance rating of 'below expectation' which the claimant had grieved; an independent panel upheld the rating and the decision was conveyed to him on 16.12.2013, after the termination. The claimant sought declarations that his dismissal was unprocedural and unfair, 12 months' salary in damages, exemplary damages, constitutional compensation, a certificate of service and a Kshs.100,000 fine under section 51(3) of the Employment Act. The court found the reason for the redundancy genuine and valid, but held that the respondent failed to serve the notices required under section 40 of the Employment Act, 2007 on the labour officer and the claimant, so the redundancy amounted to unfair termination. Balancing the section 49 factors - including the unaddressed pending grievance as an aggravating factor and the belated determination of the appeal, channels for clarification, and six months' continued medical cover as mitigating factors - the court awarded two months' gross salary, Kshs.1,060,621.70, payable by 01.09.2019 with interest at court rates thereafter. Other prayers failed: the redundancy dues were already satisfied, no violation of rights or basis for exemplary damages was established, no criminal liability or fine could be imposed in a civil suit, and the certificate of service was to be delivered. The respondent was ordered to pay 50% of the claimant's costs. Judgment delivered at Nairobi on 19th July 2019 by Byram Ongaya, Judge.

Key legal issues

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01

Validity of the reason for termination

Holding

The reason for the redundancy - reorganisation of the African Regional markets abolishing the claimant's role - was genuine and valid

Reasoning

The claimant testified he was aware of the restructuring as conveyed by the respondent, and the respondent's witness explained that the claimant's role and three others were abolished. The court therefore found the reason valid as at the time of termination, even though procedure was flawed.

p. 3
02

Procedural fairness of the redundancy under section 40

Holding

The redundancy was procedurally unfair because the statutory notices under section 40 of the Employment Act were not served on the labour officer and the claimant

Reasoning

The respondent's witness did not exhibit the notice to the labour officer required by section 40, only asserting it had been issued in August 2013. The court held that failure to serve the relevant notices meant the statutory procedure was not followed, rendering the redundancy an unfair termination.

p. 2
03

Quantum of compensation

Holding

Two months' gross salary (Kshs.1,060,621.70) awarded after weighing section 49 factors including the pending grievance, belated determination of the appeal, channels for clarification, and continued medical cover

Reasoning

The court considered the aggravating factor that the respondent failed to resolve the claimant's complaint against the BE rating before terminating, but found mitigation in the belated conclusion of the appeal, the clear channels of clarification in the termination letter, and retention on medical cover for six months, balancing justice between the parties.

p. 3

Legal principles established

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  • Failure to serve the notice to the labour officer and the employee as required under section 40 of the Employment Act renders a redundancy procedurally flawed and an unfair termination
  • Where termination is founded on a valid ground but procedure is flawed, compensation is assessed by balancing the factors in section 49 of the Employment Act, including mitigation

Court orders

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  1. 1.Declaration that the termination by the letter of redundancy dated 22.11.2013 was unfair
  2. 2.Respondent to pay the claimant Kshs.1,060,621.70 by 01.09.2019, failing which interest at Court rates from the date of judgment till full payment
  3. 3.Respondent to pay the claimant's 50% costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 40
  • Employment Act, 2007section 49
  • Employment Act, 2007section 51(3)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Moses Ngumo v East African Breweries Limited [2019] KEELRC 1115 (KLR)", Case Analysis (2019). Employment and Labour Relations Cause (memorandum of claim filed 22.11.2013; amended 22.11.2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1115/eng@2019-07-19

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