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ELRCPartially AllowedNot stated in the judgment· [2020] KEELRC 1261 (KLR)

Richard O. Pamba & another v Registered Trustees, Kenya Community Development Foundation [2020] KEELRC 1261 (KLR)

Employment and Labour Relations Court
15 April 2020
2,023 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 that calling a dismissal 're-organisation' makes it a redundancy, and employers who skip the required notices and benefits must pay compensation.

What this practically means

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Executive summary

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The Claimants, personal representatives of the estate of Lilian Alata Pamba, sued the Respondent over the termination of the deceased's employment as Financial Accountant, a position she held from 15 October 2012 until 31 January 2014. They claimed the termination, said to be on account of re-organization, was in substance an unfair redundancy effected without notice or due process, and sought Kshs 1,450,262 being remuneration for the remainder of the contract, costs and interest. The Respondent countered that the deceased was guilty of misconduct, including failure to report misappropriation of community funds and forgery of a medical receipt, and that termination with two months' notice was a compassionate alternative to summary dismissal after she stormed out of a meeting on 13 January 2014. The court held that the termination letter cited re-organization, which in law made the termination a redundancy. No evidence was produced of the statutory notice to the employee and labour officer required by Section 40(1) of the Employment Act, nor of the terminal benefits payable. The misconduct allegations could not suffice, as no proof was tendered and no fair hearing was shown. The court found the redundancy unfair and unjustified and awarded service pay of 15 days' salary for each year worked (Kshs 65,920) and compensation of ten months' salary (Kshs 1,318,420), totalling Kshs 1,374,340 less statutory deductions, with costs to the Claimants. The claim succeeded in part, as the award fell short of the sum sought, and no interest order was made. Judgment was delivered in Chambers via Zoom on 15 April 2020 by Lady Justice Hellen Wasilwa.

Key legal issues

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01

Whether the termination was a redundancy and if the Section 40 procedure was followed

Holding

The termination letter cited re-organization, so the termination was a redundancy; no notice or terminal benefits evidence was produced, hence the redundancy was unfair and unjustified

Reasoning

The termination letter dated 31 January 2014 cited re-organization to achieve greater effectiveness, effective 1 February 2014, implying no notice was given. Under Section 40(1) of the Employment Act, an employer must notify the employee personally in writing and the labour officer at least a month before termination on account of redundancy, pay leave in cash, one month's notice or wages in lieu, and fifteen days' pay per completed year as severance. No evidence of notice or terminal benefits was produced, so the redundancy failed the statutory test.

p. 3
02

Whether the misconduct allegations raised in evidence could justify the termination

Holding

The misconduct allegations could not suffice because no evidence of misconduct was produced and there was no evidence the deceased was accorded an opportunity to defend herself

Reasoning

The respondent abandoned the redundancy position in its evidence, alleging misappropriation, inefficiency and forgery. However, the reason stated in the termination letter was re-organization, not misconduct. No audit report or documentary proof of the misconduct was produced in court, and RW1 conceded no documents were produced since the deceased was not alive to defend herself. The meeting of 13 January 2014 was inconsistently described as disciplinary and non-disciplinary, and the deceased was not informed of her right to be accompanied. The allegations therefore could not sustain the termination.

p. 3
03

Procedural fairness in the disciplinary process

Holding

The deceased was neither notified of the disciplinary hearing nor informed of her right to be accompanied, so the termination did not pass the procedural fairness test

Reasoning

The Claimants relied on Walter Ogal Anuro v Teachers Service Commission for the principle that termination requires both substantive justification and procedural fairness. The deceased was not issued notice of the meeting of 13 January 2014, nor informed of her right to be accompanied by an employee or shop floor union official. The respondent's reliance on Carolyne Munala v Hoggers Limited (that storming out of a hearing forfeits the right to be heard) did not assist, as the court found no evidence of any hearing or opportunity to defend the alleged misconduct.

p. 2

Legal principles established

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  • An employer must strictly comply with the conditions in Section 40(1) of the Employment Act before terminating a contract on account of redundancy, including notice to the employee and the labour officer and payment of terminal benefits
  • Where a termination letter cites re-organization as the reason for termination, the termination is in law a redundancy

Court orders

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  1. 1.Service pay awarded at 15 days' salary for each year worked, computed as ½ x 131,842 x 1 year = Kshs 65,920
  2. 2.Compensation of 10 months' salary for unfair termination, computed as 131,842 x 10 = Kshs 1,318,420
  3. 3.Total award of Kshs 1,374,340/= less statutory deductions
  4. 4.Respondent to pay costs of the suit

Authorities

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Legislation

  • Employment ActSection 40(1)
  • Employment ActSections 43, 45 and 49
  • Evidence ActSections 107, 108, 109 and 110
  • Constitution of Kenya, 2010Article 41

Cases cited (3)

  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Carolyne Munala v Hoggers Limited
    [2018] eKLR
  • Judicial Service Commission v Gladys Boss Shollei and Another
    [2014] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court under Article 162(2) of the Constitution (the claim is brought under the Employment Act and Article 41 of the Constitution)

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, "Richard O. Pamba & another v Registered Trustees, Kenya Community Development Foundation [2020] KEELRC 1261 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1261/eng@2020-04-15

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