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ELRCPartially AllowedEmployment and Labour Relations Cause (Memorandum of Claim filed 30 October 2015)· [2019] KEELRC 2459 (KLR)

Faiza Mayabi v First Community Bank Limited [2019] KEELRC 2459 (KLR)

Employment and Labour Relations Court of Kenya
17 January 2019
HWHellen Wasilwa
3,669 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled a bank's redundancy was unfair because the employee was never given written notice, awarding her 12 months' salary.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent Bank from 2011 and last serving as Senior Officer Remedial Grade 2, claimed that her summary dismissal by letter dated 7th August 2015 was an unlawful, unfair and wrongful declaration of redundancy violating Section 40 of the Employment Act and Articles 41, 47, 50 and 28 of the Constitution. She sought declarations of unfairness, pecuniary loss, constitutional and general damages, interest and costs. The Respondent admitted the employment but maintained that the termination followed a genuine restructuring prompted by strained financial and operational conditions, in line with Section 40, its Human Resources Policy and the contract, and that all dues were paid. The Court framed three issues: validity of reasons, due process, and remedies. On the evidence, the termination letter assigned no reason, the general circular of 30th June 2015 on closure of two branches showed no proof of receipt by the Claimant, and there was no personal written notification, no communication of selection criteria, no notice, and no consultation, contrary to Section 40(1). Relying on Aviation & Allied Worker Union v Kenya Airways, the Court found the redundancy unjustified and the process irregular. The Claim was allowed: the Respondent was ordered to pay 12 months' salary (Kshs 715,560/=) as compensation for unlawful redundancy, the Claimant's pension dues, and costs of the suit with interest at court rates - on the compensation from the date of judgment and on pension dues from the date of filing suit.

Key legal issues

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01

Whether there were valid reasons for the termination

Holding

There was no valid reason established; the termination letter assigned no reason and the general circular evidencing branch closure did not establish that the Claimant's position was abolished

Reasoning

The termination letter dated 7.8.2015 gave no reason, merely citing the employment contract. The only evidence of redundancy was a general circular about closure of two branches, with no proof of receipt by the Claimant or that her position was affected. The Court therefore found no justification for the termination.

p. 5
02

Whether due process under Section 40 of the Employment Act was followed

Holding

Due process was not followed - no personal written notice, no notification of selection criteria, no notice prior to termination, and no consultation

Reasoning

Section 40(1)(b) requires personal written notification to the employee and the labour officer. There was no indication the Claimant was personally informed of the redundancy, no evidence of the selection criteria used, and no notice was issued before termination. The employer also failed to consult affected employees, rendering the process irregular and the termination unfair and unjustified.

p. 6
03

Whether the Claimant is entitled to remedies

Holding

The Claimant was awarded 12 months' salary as compensation, pension dues, costs and interest

Reasoning

Having found the termination unfair and unjustified, the Court exercised its powers under Section 49 of the Employment Act to award 12 months' gross salary as compensation for the unlawful redundancy, ordered payment of pension dues, and granted costs with interest on the compensation from judgment date and on pension dues from filing date.

p. 6

Legal principles established

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  • An employer terminating on account of redundancy must strictly comply with the conditions in Section 40(1) of the Employment Act, including personal written notification to the employee and notification of the labour officer
  • An employer's right to reorganise or declare redundancy is subject to compliance with the statutory procedure

Court orders

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  1. 1.Payment of 12 months' salary as compensation for the unlawful redundancy (12 x 59,630 = Kshs 715,560/=)
  2. 2.Payment of the Claimant's pension dues
  3. 3.The Respondent to pay costs of the suit plus interest at Court rates on the compensation with effect from the date of judgment and on pension dues with effect from the date of filing suit

Authorities

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Legislation

  • Employment Act, 2007Section 40(1)
  • Employment Act, 2007Sections 41(2), 43, 44, 45
  • Employment Act, 2007Section 49
  • Employment Act, 2007Sections 5 and 7
  • Employment Act, 2007Section 35(1)
  • Constitution of Kenya, 2010Articles 41, 47, 50, 28

Cases cited (15)

  • Hesbon Ngaruiya Waigi Versus Equitorial Commercial Bank Limited
    (2013) eKLR
  • Kenfreight (E.A.) Limited Versus Benson K. Nguti
    (2016) eKLR
  • George Onyango Akuti Versus Security Services Kenya Limited
    (2013) eKLR
  • Shankar Saklani Versus DHL Global Forwarding (K) Ltd
    (2012) eKLR
  • C.P.C Industrial Products Versus Angima
    Civil Appeal No. 197 of 1992
  • Kenya Airways Limited Versus Aviation & Allied Workers Union Kenya & 3 Others
    (2014) eKLR
  • Kenya Airways Corporation Limited Versus Tobias Ogaya Auma & 5 Others
    (2007) eKLR
  • The Queen Versus Industrial Commission of South Australia; ex-parte Adelaide Milk Supply Co-operative Limited
    (1977) 44 SAIR 1202
  • Jones Versus Department of Energy and Minerals
    (1995) IRCA 292
  • Lucas O. Ondoya & 43 Others Versus Rift Valley Railways Kenya Limited
    HCCC No. 33 of 2009 (UR)
  • Samuel Gachomo Chege Versus Roof Top Owner
    Nairobi Cause No. 1357 of 2010
  • Kavutha Ngonzi & 11 Others Versus Kapric Apparels (EPZ) Ltd
    (2017) eKLR
  • Rift Valley Textiles Limited Versus Edward Onyango Ogonda
    C.A No. 27 of 1992 (UR)
  • Shimba Tourist Services Limited Versus Wilson Mise Kigani
    C.A No. 135 of 1994 (UR)
  • Aviation & Allied Worker Union vs Kenya Airways Limited and 3 Others
    (2012) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 40, 41, 43, 44, 45, 49) and Articles 41, 47, 50 and 28 of the Constitution invoked by the Claimant

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (13)

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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, "Faiza Mayabi v First Community Bank Limited [2019] KEELRC 2459 (KLR)", Case Analysis (2019). Employment and Labour Relations Cause (Memorandum of Claim filed 30 October 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2459/eng@2019-01-17

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