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ELRCPartially AllowedNot stated in the judgment excerpt· [2021] KEELRC 736 (KLR)

Judy Gakii Njeru v Wananchi Group (K) Limited [2021] KEELRC 736 (KLR)

Employment and Labour Relations Court
7 October 2021
NMNzioki Wa Makau
4,229 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan employer's separation agreement did not shield it from liability for a redundancy that skipped mandatory legal notice and selection rules.

What this practically means

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Executive summary

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The Claimant, formerly Head of Legal-DTH, sued the Respondent alleging her June 2017 termination on account of redundancy was wrongful and unfair, seeking Kshs. 8,400,000/- being twelve months' salary, interest and costs. She argued the redundancy was a disguised termination, that the selection criteria were unlawful, that no redeployment consultations occurred, and that her constitutional rights to dignity and fair labour practices were violated. The Respondent admitted the employment and the redundancy but asserted it complied with Section 40 of the Employment Act, applied objective criteria, and paid an exit package of Kshs. 7,763,287/-. It contended the suit was barred by a Separation Agreement the Claimant executed on 14th July 2017, and that the court therefore lacked jurisdiction. The court first disposed of the jurisdictional objection, holding, applying Motor Vessel 'Lillian S', that its jurisdiction was not ousted because it could examine the validity of the separation agreement and the legality of the redundancy. Relying on Thomas De La Rue v David Opondo Omutelema, it held the separation agreement did not dislodge the Respondent's obligation to terminate employment legally. The court found the Respondent failed to give the Claimant one month's personal written notice together with the labour officer as required by Section 40(1)(b), and failed to demonstrate the statutory criteria of seniority in time, skill, ability and reliability under Section 40(1)(c), the replacement lacking relevant experience. The Claimant's unpleaded arguments on Section 77 and duress were disregarded, submissions not being a substitute for pleadings. Judgment was entered for the Claimant with two months' salary as compensation, costs of the suit, and interest from the date of judgment. The full twelve months' compensation sought was not awarded. The judgment was delivered at Nairobi on 7th October 2021 by Nzioki Wa Makau J.

Key legal issues

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01

Jurisdiction notwithstanding the separation agreement

Holding

The court has jurisdiction to examine the validity of the separation agreement and the legality of the redundancy; the agreement does not oust jurisdiction

Reasoning

Relying on Motor Vessel 'Lillian S', the court held jurisdiction must be determined first. Since the separation agreement was the basis of the jurisdictional objection, the court retained authority to consider whether the agreement was valid and whether the Respondent applied the law in declaring the redundancy. Jurisdiction was therefore not ousted.

p. 3
02

Compliance with Section 40(1)(b) and (c) of the Employment Act

Holding

The Respondent failed to give the Claimant one month's personal written notice together with the labour officer and failed to apply the statutory criteria of seniority, skill, ability and reliability; the redundancy was unlawful

Reasoning

The court found nothing in Section 40(1)(b) denying non-union employees the one-month notice. On criteria, the CV of the Claimant's replacement showed no seniority in time, skill, ability or reliability; a qualification is not the same as skill. The disregard of the law entitled the Claimant to compensation.

p. 4
03

Effect of the separation agreement/discharge

Holding

The agreement did not dislodge the Respondent's obligation to terminate employment legally; following Thomas De La Rue, the court must determine whether it was freely and willingly executed, and here it did not bar the claim for unlawful redundancy

Reasoning

The court adopted the Thomas De La Rue test that a discharge voucher cannot preclude enquiry into fairness of termination. The separation agreement of itself did not dislodge the obligation to terminate employment legally, and the redundancy did not accord with the law.

p. 4
04

Section 77 Employment Act notification

Holding

The Claimant's allegation on Section 77 was disregarded as it was raised only in submissions and not pleaded

Reasoning

The Respondent argued, and the court agreed, that a party cannot amend pleadings or seek reliefs not pleaded through submissions. Since the Section 77 claim and the duress allegation were not pleaded in the Memorandum of Claim, they had no foundation and were disregarded.

p. 3

Legal principles established

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  • A discharge voucher or separation agreement per se cannot absolve an employer from statutory obligation or preclude the court from enquiring into the fairness of a termination; the court must determine whether it was freely and willingly executed with full information
  • Where a court has no jurisdiction it must down its tools and take no further step
  • An employer must comply with the conditions in Section 40(1) of the Employment Act, including personal written notice to the employee together with the labour officer one month before redundancy and consideration of seniority in time, skill, ability and reliability
  • Submissions cannot take the place of pleadings; a party is bound by pleadings and cannot introduce new issues at submissions stage

Court orders

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  1. 1.Two month's salary compensation for the unlawful redundancy
  2. 2.Costs of the suit
  3. 3.Interest at court rates on the compensation sum from the date of judgment till payment in full

Authorities

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Legislation

  • Employment Act No. 11 of 2007Section 40(1)
  • Employment Act No. 11 of 2007Section 40(1)(a),(b),(c),(f)
  • Employment Act No. 11 of 2007Section 77
  • Employment Act No. 11 of 2007Section 3(6)
  • Constitution of Kenya, 2010Article 28
  • Constitution of Kenya, 2010Article 41(1)
  • Evidence ActSection 120

Cases cited (14)

  • Hesbon Ngaruiya Waisi v Equitorial Commercial Bank Limited
    [2013] eKLR
  • Kenya Plantation and Agricultural Workers Union v Harvest Limited
    [2014] eKLR
  • Doris Kairuthi Kaaria & 59 Others v Kenya Methodist University
    [2017] eKLR
  • Kenya Airways Limited v Aviation and Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • KUDHEIHA v the Aga Khan University Hospital Nairobi
    Cause No. 815 of 2015 (unreported)
  • Bernard Misawo Obora v Coca Cola Juices Kenya Limited
    [2015] eKLR
  • Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited
    [2018] eKLR
  • Patrick Njuguna Kariuki v Del Monte (K) Limited
    [2012] eKLR
  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    [2013] eKLR
  • Faiza Mayabi v First Community Bank Limited
    [2019] eKLR
  • Felix Mutie Musango v Tin Can Manufacturers Limited
    [2020] eKLR
  • Ephraim Gaitho Githongori v Timaflor Limited
    [2018] eKLR
  • Gilbert Mugambi v Michimikuru Tea Factory Limited
    [2018] eKLR
  • Motor Vessel ‘Lillian S’ v Caltex Oil (K) Limited
    [1985] KLR 1
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court under the Employment Act; the court held the separation agreement did not oust its jurisdiction

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Judy Gakii Njeru v Wananchi Group (K) Limited [2021] KEELRC 736 (KLR)", Case Analysis (2021). Not stated in the judgment excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/736/eng@2021-10-07

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