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ELRCDismissedCause 19 of 2018· [2021] KEELRC 722 (KLR)

John K. Otieno v G.E. East Africa Services Limited [2021] KEELRC 722 (KLR)

Employment and Labour Relations Court
28 September 2021
2,436 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 upheld a redundancy dismissal because the employer consulted the employee, offered him another job, and paid his dues.

What this practically means

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Executive summary

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The Claimant, formerly Senior Manager Sub-Sahara Africa Business Development with the Respondent, sued by memorandum of claim dated 30 January 2018 seeking one month's salary in lieu of notice (Kshs. 1,395,833.33), twelve months' salary as compensation for unfair termination (Kshs. 13,500,000/-), costs and interest. He contended that his termination on account of redundancy was a sham because some of his functions were taken over by another employee, Fatima White, and that the Respondent failed to comply with the notice requirements of Section 40 of the Employment Act, both to him and to the Labour Officer. The Respondent maintained that a global restructuring of its operations abolished the position of Senior Development Leader in its Power Business Unit; that it consulted the Claimant, offered him an alternative senior role in the Renewable/Hydro Business Unit at better remuneration, which he declined after imposing an unreasonable condition; and that he received his dues including redundancy pay and bonuses totalling some Kshs. 6 million. At trial the Respondent's HR Manager conceded that the notice to the Labour Officer, though said to have been issued, was not exhibited. The Claimant relied on Hesbon Ngaruiya Waigi and Kenafric Industries on procedural fairness; the Respondent relied on Peter Muindi and Pepper v Hart for a purposive reading of Section 40. The court found the Respondent had valid, fair and justifiable reasons, that the purposes of the notices were attained through consultation and the offer of redeployment, and dismissed the suit with each party bearing its own costs.

Key legal issues

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01

Justifiability of the redundancy

Holding

The Respondent had valid, fair and justifiable reasons for terminating the Claimant's employment arising from global restructuring that resulted in abolition of his position

Reasoning

The Respondent demonstrated that economic, technological, organizational and structural changes in its Power Business Unit necessitated a global restructuring that abolished the position of Senior Development Leader. The restructuring combined functions so the company did not have to pay two people to perform the same functions. The court accepted that the redundancy was genuine notwithstanding the Claimant's contention that some roles were taken over by another employee.

p. 2
02

Procedural compliance with Section 40 of the Employment Act

Holding

The court accepted the Respondent's submission that the substance of the statutory notices - consultation and consideration of redeployment - was attained even though the notice to the labour office was not exhibited

Reasoning

The Claimant argued that no notice of intention to declare redundancy was issued to him or to the Labour Officer as required by Section 40. The Respondent submitted that the purposes of the notices were to allow consultations and ascertain possible redeployment, and that these purposes were attained since the Claimant was offered another role and knew of the redundancy as early as February 2017. The court adopted this purposive view and found the suit unmerited.

p. 2
03

Whether performance of the Claimant's functions by another employee negates redundancy

Holding

The court found against the Claimant on this issue, accepting that not the full scope of his role was taken over and that some functions were outsourced

Reasoning

The Claimant testified that Fatima White took over the exact work he performed, contending this defeated redundancy. The Respondent's witness conceded some roles were taken over by Fatima but maintained she held a separate GGO role and that the full scope was not taken over, with some roles outsourced. The Claimant had also been offered a senior alternative position with better remuneration, which he refused on unreasonable conditions.

p. 2

Legal principles established

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  • A claimant who was aware of an intended redundancy, was offered alternative employment which he declined, and received his dues including redundancy pay and bonuses, cannot maintain a claim of unfair termination

Court orders

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  1. 1.The suit is dismissed
  2. 2.Each party shall bear their own costs

Authorities

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Legislation

  • Employment ActSection 40
  • Employment ActSection 40(1)(b)

Cases cited (4)

  • Hesbon Ngaruiya Waigi v Equatorial Commercial Bank Limited
    [2013] eKLR
  • Kenafric Industries Limited v John Gitonga Njeru
    [2016] eKLR
  • Peter Muindi & Another v Director of Public Prosecutions
    [2019] eKLR
  • Pepper v Hart
    (1992) 3 WLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (employment dispute under the Employment Act)

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, "John K. Otieno v G.E. East Africa Services Limited [2021] KEELRC 722 (KLR)", Case Analysis (2021). Cause 19 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/722/eng@2021-09-28

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