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ELRCPartially AllowedMemorandum of Claim dated 15th September, 2017 (ELRC Cause)· [2021] KEELRC 881 (KLR)

Ruth Wairagu v Elite Travel Services Limited (HRG Kenya) [2021] KEELRC 881 (KLR)

Employment and Labour Relations Court
24 September 2021
DNDavid Nderitu
5,547 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded over KES 2.3 million to an employee declared redundant, ruling that the employer skipped legally required redundancy procedures.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 1st March 2010 and serving as Bid-Writer and Implementation Manager, was terminated on 20th July 2017 on grounds of redundancy. She challenged the termination as a dismissal disguised as redundancy, arising from a strained relationship with the Managing Director, and sought declarations, reinstatement, injunction and alternative monetary reliefs. The court framed four issues: the Claimant's salary, the lawfulness of the redundancy in substance and procedure, remedies, and costs. On salary, the court preferred the Respondent's payslips showing a gross monthly salary of Kshs.150,600/=, rejecting the uncorroborated allegation of cash paid in an envelope, and relied on Section 97 of the Evidence Act. On substance, the Respondent failed to prove genuine operational reasons: the bid-writing function continued after termination, no performance improvement steps were taken, and no evidence showed the position was a financial burden, breaching Section 43. On procedure, the Respondent wholly failed to comply with Section 40: no one month's notice was issued to the Claimant or the labour officer, the labour officer's notice was dated the same day as the termination, and the Claimant was given no hearing. The termination was declared unprocedural, unfair and unlawful. Reinstatement, injunction, gratuity, house allowance, exemplary damages and constitutional damages were refused. The court awarded unpaid leave (Kshs.35,140/=), severance (Kshs.527,100/=), payment in lieu of notice (Kshs.150,600/=), July 2017 salary (Kshs.100,400/=) and ten months' gross salary as compensation (Kshs.1,506,600/=), totalling Kshs.2,319,840/=, with interest at court rates from the date of judgment and costs to the Claimant.

Key legal issues

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01

Claimant's actual salary at termination

Holding

Gross monthly salary was Kshs.150,600/= per the payslips; the allegation of cash paid in an envelope failed for want of evidence

Reasoning

The payslips produced by the Respondent uniformly showed basic pay of Kshs.120,480/= and gross pay of Kshs.150,600/=. The Claimant's allegation of additional cash payments in an 'envelope' imputing tax evasion was unsupported by any evidence, and her own witness did not corroborate it. Relying on Section 97 of the Evidence Act (Cap 80), the court preferred the documentary evidence.

p. 3
02

Substantive fairness of the redundancy

Holding

Termination was unfair in substance; the Respondent failed to prove genuine redundancy reasons under Section 43

Reasoning

RW1 admitted the bid-writing function continued after termination and was core to the Respondent's business, undermining the claim that the position was superfluous. The real reason was alleged non-performance, yet the Respondent took no steps such as training or a Performance Improvement Plan. The position was never shown to be a financial burden. The burden under Section 43 was not discharged.

p. 4
03

Procedural fairness of the redundancy

Holding

Termination was procedurally unfair; the Respondent wholly failed to comply with Section 40 of the Employment Act

Reasoning

No one month's notice of the intended redundancy was issued to the Claimant or the labour officer; the notice to the labour officer was dated and stamped the same day as the termination. No notice of termination was served in advance. No evidence was given of consideration of seniority, skill, ability and reliability, and no hearing was afforded before the termination letter was handed to the Claimant.

p. 5
04

Quantum of compensation

Holding

Ten months' gross salary (Kshs.1,506,600/=) awarded under Section 49(1)(c) and (4) of the Act

Reasoning

The court considered the seven years of service, the gross unfairness in substance and procedure, absence of contribution by the Claimant, the impracticability of reinstatement, the Respondent's failure to pay terminal dues, and judicially noticed effects of Covid-19 on the travel and hospitality industry.

p. 7

Legal principles established

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  • Redundancy is a process, not an event, and requires strict compliance with Section 40 of the Employment Act including one month's notice to the employee and the labour officer
  • Sections 43 and 45 of the Employment Act on proof of reason and unfair termination apply even to terminations on redundancy
  • Where an employer alleges poor performance as justification, it must show steps taken to improve performance before termination
  • Payment in lieu of notice does not dispense with the one month notice requirement under Section 40

Court orders

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  1. 1.A declaration be and is hereby issued that Claimant's termination from Respondent's employment on account of redundancy was unprocedural, unfair, and unlawful
  2. 2.Unpaid leave days awarded at Kshs.35,140/-
  3. 3.Severance pay awarded at Kshs.527,100/-
  4. 4.Payment in lieu of notice awarded at Kshs.150,600/-
  5. 5.Salary for July 2017 awarded at Kshs.100,400/-
  6. 6.Compensation for unfair termination awarded at Kshs.1,506,600/- (10 months' gross salary)
  7. 7.Total award of Kshs.2,319,840/- to earn interest at court rates from the date of judgment till payment in full
  8. 8.Costs to the Claimant

Authorities

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Legislation

  • Employment ActSections 2, 40, 40(1)(b), 40(1)(f), 40(1)(g), 43, 44(4)(c), 45, 49, 49(1)(c), 49(4)
  • Employment and Labour Relations Court ActSection 12(2)
  • Evidence ActSection 97

Cases cited (16)

  • Mary Chemweno -V- Kenya Pipeline Company Limited
    (2014) eKLR
  • Walter Ogal Amiro -V- Teachers Service Commission
    (2013) eKLR
  • Janet Nyandiko V- Kenya Commercial Bank Limited
    (2017) eKLR
  • Kenya Airways -V- Aviation and Allied Workers Union and 3 Others
    (2014) eKLR
  • Geofrey Adabwa Ashino V- Coconut (K) LTD
    (2019) eKLR
  • Paul Ng'eno -V- Pyrethrum Board of Kenya
    (2013) eKLR
  • Banking Insurance and Finance Union (Kenya) –V- Barclays Bank of Kenya Limited and Another
    (2016) eKLR
  • Sosphita Abdalla Kisanga -V- Intex Construction Company Limited
    (2018) eKLR
  • Mary Nyawira Karimi -V- Pure Circle (K) Limited
    (2018) eKLR
  • Pathfinder International Kenya Limited V Stephen Ndegwa Mwangi
    (2019) eKLR
  • Bamburi Cement LTD V Farid Aboud Mohammed
    (2016) eKLR
  • H. Young & Company EA Limited V Javan Were Mbago
    (2016) eKLR
  • Godfrey Ndumba Mbogori and Another V Nairobi City Council
    (2018) eKLR
  • Peter Kamwei V Standard Group Limited
    (2016) eKLR
  • Moses Kaunda Moro V CMCC Motors Group LTD
    (2013) eKLR
  • Rael Mwinyathi Mutinda -V- Kenya Commercial Bank Ltd
    (2019) eKLR
Jurisdiction invoked
Section 12(2) of the Employment and Labour Relations Court Act No. 20 of 2011; Employment Act No. 11 of 2007

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, "Ruth Wairagu v Elite Travel Services Limited (HRG Kenya) [2021] KEELRC 881 (KLR)", Case Analysis (2021). Memorandum of Claim dated 15th September, 2017 (ELRC Cause). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/881/eng@2021-09-24

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