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ELRCPartially AllowedNot stated in the excerpt (ELRC Cause, Nairobi)· [2020] KEELRC 1645 (KLR)

Wilson Githu Rutinu v Orpower 4 Inc Limited [2020] KEELRC 1645 (KLR)

Employment and Labour Relations Court
13 February 2020
MOMaureen Onyango
2,908 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan employer that skipped giving an employee one month's redundancy notice was ordered to pay millions in compensation.

What this practically means

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Executive summary

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The Claimant, employed as a plant technical manager on 14th January 2013, was terminated by letter dated 8th April 2014 on account of redundancy. He sued seeking payment in lieu of notice, expected income for at least 20 years, punitive damages for unlawful termination, general damages and costs, contending the redundancy was malicious and a disguised termination since his position was allegedly retained. The Respondent defended the termination as a lawful restructuring, asserted full payment of terminal dues under a discharge certificate, and that the Claimant was considered for the plant manager role but found unsuitable due to efficiency concerns. The court framed two issues: whether the redundancy was lawful and justified, and whether the Claimant was entitled to the reliefs. On the first, the court found that although the labour office was notified on 3rd March 2014, the Claimant was never given the one-month notice of intention required by section 40(1)(b) of the Employment Act; he received only the termination letter. Relying on Kenya Airways, Thomas De La Rue and Gerrishom Obayo, the court held the section 40 procedure mandatory and the redundancy unprocedural and unfair. It further found the redundancy malicious and a disguised termination: only the Claimant's position was abolished, the selection criteria were unexplained, and unproven efficiency complaints were used to justify it. On relief, payment in lieu of notice, punitive damages and 20 years' expected income were refused. The court awarded 8 months' salary as compensation, Kshs. 3,080,000, and costs to the Claimant. Judgment delivered at Nairobi on 13th February 2020 by Maureen Onyango, Judge.

Key legal issues

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01

Whether the redundancy was lawful and justified under section 40 of the Employment Act

Holding

The redundancy was unprocedural and unfair because the Claimant was never issued with the one-month notice of intention to declare him redundant; only the labour office was notified, and the Claimant received only the termination letter of 8 April 2014.

Reasoning

The court examined the Respondent's bundle and found a redundancy notice issued to the labour office on 3rd March 2014 but no notice to the Claimant at that time. Relying on the Court of Appeal in Kenya Airways and Thomas De La Rue, it held the section 40 procedure is mandatory and the order of notices matters. The single letter of 8th April was a notice of termination under section 40(1)(f), not a notification of intention. Non-compliance rendered the redundancy unfair.

p. 4
02

Whether the redundancy was actuated by malice or was a disguised termination

Holding

The Claimant proved the redundancy was malicious and a disguised termination: only his position was abolished on the organograms, the person placed in the plant manager role had reported to him, and the selection criteria were not explained.

Reasoning

The organograms showed all other positions remained materially the same and were occupied by the same individuals. The Respondent justified not placing the Claimant on efficiency concerns, evidenced by complaint emails, but did not prove those facts as justifying redundancy nor explain the selection criteria. Poor performance, if relied on, required the employee be given a chance to improve. The court concluded the redundancy was a disguised termination of one singled-out employee.

p. 4
03

Whether the Claimant was entitled to the reliefs sought

Holding

Partially: the Claimant was awarded 8 months' gross salary (Kshs. 3,080,000) as compensation under section 49, but the claims for payment in lieu of notice, punitive damages and 20 years' expected income were refused.

Reasoning

Payment in lieu of notice had already been paid per the Respondent's evidence. Punitive damages and expected income for 20 years lacked legal or contractual basis. Compensation of 8 months was assessed considering the short service of about 1 year 3 months, the disguised termination, the singling out of the Claimant, and the failure to comply with section 40(1)(b), covering discrimination and failure to notify and consult.

p. 4

Legal principles established

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  • Section 40 of the Employment Act sets out mandatory preconditions for a valid redundancy, including personal written notice to the employee and notification of the labour officer at least one month before the redundancy takes effect.
  • Where poor performance of an employee is noted, the shortcomings must be pointed out and the employee given an opportunity to improve; an employer cannot disguise a performance-based termination as redundancy.

Court orders

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  1. 1.Claimant awarded 8 months' salary as compensation for unfair and unprocedural redundancy, assessed at Kshs. 3,080,000
  2. 2.Costs of the suit awarded to the Claimant

Authorities

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Legislation

  • Employment Actsection 40 (including 40(1)(a)-(g), 40(1)(b), 40(1)(c), 40(1)(f))
  • Employment Actsection 2
  • Employment Actsection 47(5)
  • Employment Actsection 49(1)(c)
  • ILO Convention No. 158 - Termination of Employment Convention, 1982Article 13 of Recommendation 166
  • ILO Recommendation No. 119 - Termination of Employment Recommendation, 1963Article 15 of the Supplementary Provisions

Cases cited (11)

  • Hesbon Ngaruiya v Equitorial Commercial Bank Limited
    [2013] eKLR
  • Francis Maina Kamau v Lee Construction
    [2014] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Aga Khan University Hospital v KUDHEIHA
    Civil Appeal 7 of 2016
  • Caroline Atieno Osweta v Kenya Yungheng Plate Making Limited
    [2013] eKLR
  • Super Group Supply Chain Partners v Arthur Dlamini & Another
    (JA 77/10)
  • Patrick Ombati v Credit Bank Limited
    [2016] eKLR
  • David Nyamu v Insurance Training and Education Registered Trustees
    [2017] eKLR
  • Thomas De La Rue (K) Ltd v David Opundo Omutelema
    [2013] eKLR
  • Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited
    [2018] eKLR
  • Kenya Science Research International Technical and Allied Workers Union v Stanley Kinyanjui and Magnate Ventures Limited
    ELRC Cause 273 of 2010
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim; specific enabling provision not quoted in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Wilson Githu Rutinu v Orpower 4 Inc Limited [2020] KEELRC 1645 (KLR)", Case Analysis (2020). Not stated in the excerpt (ELRC Cause, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1645/eng@2020-02-13

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