Daniel Githinji Waiganjo v Kenpipe Co-operative Savings and Credit Society Limited [2019] KEELRC 2044 (KLR)
The bottom line
#Kenya's Employment Court ruled Kenpipe Sacco's restructuring dismissal was an unlawful redundancy and ordered payment of about Kshs.1.48 million to the former employee.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was wrongful termination by redundancy
The termination was premature and irregular as the mandatory redundancy procedure in section 16A of the repealed Employment Act and section 4(5) of the Trade Disputes Act was not followed
The court found the real reason for termination was redundancy following restructuring. Under section 16A(1) the employer must notify the union and labour officer, pay leave in cash, give one month's notice and severance pay at 15 days per completed year. Section 4(5) of the Trade Disputes Act required reporting to the Minister. None of these steps was taken; the claimant got no prior notice and the labour officer was not informed.
Notice period applicable on termination
Claimant entitled to 3 months' salary in lieu of notice per the express contract terms; the Employee Handbook was not part of the contract
No proof was given of when the June 2007 Employee Handbook came into force or that the claimant was notified of it before termination. Even if published, a handbook of general HR guidelines cannot override express contract terms. The contract stipulated 3 months' notice or salary in lieu, yielding Kshs.454,875.45.
Unpaid emoluments and accrued leave days
Unpaid emoluments awarded at Kshs.275,913.53 as admitted by the respondent's witness; 206 leave days awarded at basic salary, Kshs.624,458.50
No particulars were pleaded for the Kshs.736,925 claimed, so only the assessed sum admitted by Rw1 was awarded. The employer failed to produce leave registers to disprove the claimant's 206 days; the leave application form of 6.8.2007 showing 285 accrued days was sufficient evidence, corroborated by Rw2's cross-examination.
Gratuity and severance pay for prior contract cycles
Gratuity for the 6 months of the last contract awarded at the respondent's assessed Kshs.123,048.75; severance pay for the earlier 3-year contracts refused as unjust enrichment
Gratuity for each completed contract 1992 to March 2007 had been paid; the respondent undertook to pay gratuity for the final 6 months and assessed it at Kshs.123,048.75, which the court adopted. The earlier fixed-term contracts were distinct and concluded; awarding severance for them would unjustly enrich the claimant, and the redundancy occurred before one year of the last contract was completed.
Sacco shares and the loan counterclaim
Both remitted to the Cooperative Tribunal
The claim for personal savings/shares and the respondent's counterclaim for outstanding Sacco loans are disputes between a Sacco and its member, over which the Cooperative Tribunal has original jurisdiction. The court noted the respondent's Reply admitted the loan had been repaid by guarantors.
Legal principles established
#- Termination on account of redundancy requires strict compliance with the mandatory procedure in section 16A(1) of the (repealed) Employment Act, including notice to the union and labour officer and severance pay for each completed year of service
- An employer's handbook/policy guidelines cannot replace or undo the express terms of an individual employee's contract of service
- The burden of keeping and producing employment records, including leave records, lies on the employer
- Damages for breach of an employment contract are limited to the earnings during the notice period
- Disputes between cooperative societies/Saccos and their members fall within the original jurisdiction of the Cooperative Tribunal
Court orders
#- 1.Judgment entered for the claimant against the respondent as follows: Notice Kshs.454,875.45; Salary arrears Kshs.275,913.53; Accrued leave Kshs.624,458.50; Gratuity Kshs.123,048.75; Total Kshs.1,478,296.25
- 2.Claimant awarded costs of the suit
- 3.Interest on the award at court rate from the date of filing the suit
- 4.Award to be paid less statutory deductions
- 5.Claims for severance pay, general damages and punitive/exemplary/aggravated damages dismissed
- 6.Claim for Sacco shares/personal savings and the loan aspect of the counterclaim remitted to the Cooperative Tribunal
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution (establishment of the Employment and Labour Relations Court); suit transferred from the High Court via the defunct Industrial Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Daniel Githinji Waiganjo v Kenpipe Co-operative Savings and Credit Society Limited [2019] KEELRC 2044 (KLR)", Case Analysis (2019). Cause No 1088 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2044/eng@2019-03-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.