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ELRCPartially AllowedAmended Plaint dated and filed 29th September 2003 (former cause; number not stated in judgment)

Charles P O Nyamunga & 68 others v Maseno University [2019] KEELRC 2198 (KLR)

Employment and Labour Relations Court
21 February 2019
2,618 words in judgment
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The bottom line

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Kenya's Employment Court ordered Maseno University to pay 69 retrenched staff extra severance and training allowances, 18 years after the 2001 retrenchment.

What this practically means

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Executive summary

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The 69 claimants were retrenched from Maseno University in 2001 under a government-wide Civil Service retrenchment policy, and sued for Kshs 41,056,218.40 comprising unsupplied uniforms, overtime, commuting allowances, underpayment, balance of the retrenchment package (golden handshake, training and transport allowances), unpaid severance, gratuity and benevolent fund dues, plus general damages and 12 months' salary compensation for allegedly unfair retrenchment. The court held that the retrenchment followed a fair and lawful procedure: the selection process was transparent and not materially impugned, and the government policy directive did not derogate from ordinary redundancy principles - the Egerton University decision to the contrary was a distinction without a difference. However, the court found the respondent erred in materially deviating from the Office of the President circular dated 23rd June 2000, which prescribed severance of 2½ months' salary per completed year of service. Having paid one month's severance and one month's gratuity (an effective two months), the respondent was ordered to pay additional severance of half a month's salary per completed year of service, computation to be filed within 60 days. Following the Egerton University authority, each claimant was awarded Kshs 35,000 for training not provided (Kshs 40,000 less Kshs 5,000 already paid). Claims for uniforms, overtime, commuting allowance, the golden handshake balance, underpayment (spent by consent) and general damages/12 months' compensation (Employment Act 2007 not in force in 2001) were dismissed. The award carries interest at court rates from filing; the respondent was ordered to pay the costs. Ten plaintiffs have died and their claims are subject to substitution.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the retrenchment of the claimants was lawful and followed a fair procedure
  2. 2.Whether the retrenchment was discriminatory, a breach of contract and/or null and void
  3. 3.Whether the respondent underpaid the retrenchment package by applying the Public Universities Retrenchment Guidelines instead of the circular from the Office of the President dated 23rd June 2000
  4. 4.Whether the claimants are entitled to the value of unsupplied uniforms, unpaid overtime, commuting allowances, golden handshake balance, training allowance, unpaid severance, gratuity and benevolent fund dues
  5. 5.Whether compensation equivalent to 12 months' salary is payable given that the retrenchment predated the Employment Act, 2007

Key legal issues

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01

Whether the retrenchment procedure was fair and lawful

Holding

The retrenchment followed a fair procedure and was lawful; selection was transparent and objective and not materially impugned.

Reasoning

The court found the exercise was guided by a government-wide policy and that the report identifying potential retrenchees set out a transparent, analytical process leading to objective selection. The plaintiffs did not materially impugn that report. The court rejected the argument that being a policy directive distinguished this retrenchment from ordinary redundancy, holding the Egerton University case was a distinction without a difference.

p. 3
02

Whether the respondent underpaid the severance package by applying the University Guidelines instead of the Presidential circular of 23rd June 2000

Holding

Yes, partially - the respondent was obliged to apply the Presidential circular's rate of 2½ months' salary per completed year; having paid severance at one month plus gratuity at one month (2 months total), the shortfall was half (1/2) month's salary per completed year of service.

Reasoning

The circular from the Office of the President dated 23rd June 2000 applied to the entire Public Service and prescribed severance of 2½ months' salary per completed year. The University materially deviated, paying one month's severance and one month's gratuity, an effective 2 months. The cumulative difference is therefore half a month's salary per year of service, which the court awarded as additional severance pay.

p. 4
03

Whether the claimants were entitled to training allowance

Holding

Yes - following the Egerton University decision, each claimant awarded Kshs 40,000 less Kshs 5,000 already paid, i.e. Kshs 35,000 each.

Reasoning

The court agreed with Justice Koome's finding in Amos Ng'ang'a Waiharo v Egerton University that failure to provide budgeted training was a serious oversight on the government and a legitimate claim. Since each claimant had already received Kshs 5,000 in lieu of training, the net award was Kshs 35,000 each.

p. 4
04

Whether 12 months' salary compensation under the Employment Act, 2007 applied

Holding

No - the retrenchment occurred in 2001 when the present Employment Act, 2007 was not in force.

Reasoning

The court noted that the retrenchment took place in 2001, before the current Employment Act. Section 40 relied on in the cited Court of Appeal decision did not then exist, and the erstwhile Act did not provide for compensation equivalent to 12 months' salary, though it embraced similar retrenchment principles.

p. 2

Legal principles established

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  • A public institution implementing a government-wide retrenchment policy must still adhere to the criteria in the applicable circular; material deviation to the detriment of employees is actionable.
  • A government retrenchment policy directive does not derogate from common-law and statutory principles guiding fair and humane retrenchment.
  • Where a CBA grievance arises, it must be escalated internally and reported to the Ministry of Labour before being litigated.

Court orders

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  1. 1.Respondent to pay additional severance pay to each claimant equivalent to half (1/2) month salary for each completed year of service, computation to be done and filed in 60 days
  2. 2.Respondent to pay each claimant Kshs 35,000 in respect of essential training not given to the retrenchees
  3. 3.Award payable with interest at court rates from date of filing suit till payment in full
  4. 4.Respondent to pay costs of the suit
  5. 5.Judgment entered in favour of the plaintiffs including deceased plaintiffs subject to substitution by lawful representatives

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment dispute (specific enabling provision not stated in judgment)

Relief refused

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Value of unsupplied uniforms (Kshs 5,388,760)

No evidence the dispute was escalated to the Ministry of Labour nor that claimants bought their own uniforms; uniforms not compulsory

p. 4

Unpaid overtime allowances (Kshs 862,456.04)

Not proved on a balance of probabilities; off-day arrangement existed; dispute never reported to the Ministry of Labour

p. 4

Unpaid commuting allowance (Kshs 4,253,170)

CBA entitlement of Kshs 500 monthly was paid and reflected in pay slips

p. 4

Balance of golden handshake (Kshs 15,542,388)

Golden handshake was Kshs 40,000 as clarified by the Office of the President advertisement; position settled by previous cases

p. 4

General damages for unfair/unlawful retrenchment and 12 months' salary compensation

Retrenchment followed fair procedure and was lawful; Employment Act 2007 compensation provisions did not exist at the material time

p. 3

Underpayment claim of Kshs 174,546

Settled by consent recorded on 2nd March 2004 and is spent

p. 4

Costs

The respondent to pay costs of the suit.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the final analysis, judgment is entered in favour of the plaintiffs, including the deceased plaintiffs subject to substitution by lawful representatives as against the respondent as follows:
p. 4Final orders - judgment entered for plaintiffs
(a) Respondent to pay additional severance pay to each of the claimants the equivalent to half ( 1/2) month salary for each completed year of service. Computation to be done and filed in 60 days.
p. 4Final orders - additional severance pay
(b) The respondent to pay to each claimants Kshs 35,000 in respect of essential training not given to the retrenchees.
p. 4Final orders - training allowance
(c) The award is payable with interest at court rates from date of filing suit till payment in full.
p. 4Final orders - interest
With respect, this is a distinction without a difference.
p. 3Policy-driven retrenchment is not distinguishable from ordinary redundancy
The University erred in deviating materially from the circular to the loss and detriment of the Plaintiffs
p. 3Deviation from the Presidential circular

Issues in the judgment

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minor

The retrenchment circular is referred to inconsistently as dated 23rd June 2000 and 23rd June 2001

minor

The Egerton University case is rendered with different claimant names: 'Amos Ng'ang'a Waiharo' and 'Amos Nyaga Weihero'

minor

The training allowance claim is stated as Kshs 2,460.00 in the claim breakdown but as Kshs 2,460,000 in the claim list

minor

The judgment says ten plaintiffs died but lists eleven numbered plaintiffs

minor

The golden handshake is said to have been clarified as 'Kshs 40,000 and not Kshs 240,000' while the plaintiffs' claim of budgeted per-person amount is stated as Kshs 265,252

minor

The Court of Appeal decision cited by the plaintiffs was relied on for redundancy procedure under Section 40 of the Employment Act 2007, but the court held that statute was not in force at the material time; treatment of that authority is not expressly resolved

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, "Charles P O Nyamunga & 68 others v Maseno University [2019] KEELRC 2198 (KLR)", Case Analysis (2019). Amended Plaint dated and filed 29th September 2003 (former cause; number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2198/eng@2019-02-21

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