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ELRCPartially AllowedCause No 184 of 2016· [2021] KEELRC 899 (KLR)

George Otieno Rambo v Nation Media Group Limited [2021] KEELRC 899 (KLR)

Employment and Labour Relations Court
17 September 2021
8,491 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~34 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled Nation Media's redundancy was unfair, awarding a former Brand Manager nine months' gross salary but requiring him to repay his car loan.

What this practically means

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Executive summary

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The Claimant, employed as Brand Manager - Daily Nation in April 2014 and confirmed in August 2014, was terminated on account of redundancy by a letter dated 31st August 2015 following a purported review of the Respondent's Radio business strategy. He sued for unlawful, unfair and disguised termination, seeking 12 months' salary compensation, salary for August, pay in lieu of notice, service pay, overtime, a certificate of service, interest and costs. The Respondent denied the claim, asserting valid operational reasons and procedural compliance, and counterclaimed for Kshs.1,071,650.00 comprising a car loan balance, car insurance balance and travel advance. The court framed five issues and found the termination both procedurally and substantively unfair. The letter of 31st August 2015 was a termination letter, not a redundancy notice; the notices to the employee and labour officer fell far short of the mandatory one-month notice under section 40(1) of the Employment Act, which contemplates two notices regardless of union membership, and no consultation took place. On substance, the Respondent failed to demonstrate the validity of the 'strategy review' reason as required by sections 43 and 45. The court awarded nine months' gross salary (Kshs.1,744,209.00) as compensation, computing gross salary at Kshs.193,801.00 inclusive of car allowance, plus August salary, pay in lieu of notice at basic salary, leave pay and service pay. The overtime claim was abandoned. On the counterclaim, the car loan balance of Kshs.1,040,625.00 was awarded, while the insurance balance and travel advance failed as unproved special damages. Judgment was entered accordingly with costs to the Claimant on the claim, no costs on the counterclaim, and set-off against statutory taxes.

Key legal issues

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01

Whether the termination on redundancy was procedurally fair

Holding

Not procedurally fair - no proper redundancy notice under section 40(1) and no consultation

Reasoning

The letter of 31st August 2015 was a termination letter, not a redundancy notice, and the letters to the employee (1 day) and labour officer (4 days) fell far short of the mandatory one-month notice under section 40(1). No evidence of consultation was tendered, and the Respondent's witness admitted unawareness of any consultation. The court held that non-unionised employees enjoy equal protection and that two notices and consultation are required.

p. 9
02

Whether the termination was substantively fair

Holding

Not substantively fair - the Respondent failed to prove the validity of the alleged redundancy

Reasoning

Sections 43 and 45 of the Employment Act place the burden on the employer to prove the reason for termination. The Respondent merely asserted a 'review of the Radio business strategy' without tendering evidence of what the review entailed, the selection criteria, alternatives considered, or the extent of the redundancy. The court formed the uncomfortable feeling that the true reason was not operational requirement.

p. 10
03

What compensation is payable under section 49(1)(c)

Holding

Nine months' gross salary awarded, computed on gross salary of Kshs.193,801.00

Reasoning

The court considered the extent of the Respondent's deviation from the law, the breach of fair labour practices, the disguised reason for termination, the Claimant's lack of alternative employment, the no-fault nature of the termination and the reasonable expectation of continued employment. Gross salary includes allowances, so the Kshs.193,801 figure applied for compensation and August salary, while basic salary applied to contractual notice, service pay and leave.

p. 11
04

Whether the Respondent's counterclaim succeeds

Holding

Partially allowed - car loan balance of Kshs.1,040,625.00 awarded; insurance and travel advance refused as unproved special damages

Reasoning

The Claimant admitted owing the car loan balance, and his argument that the termination excused repayment was rejected as implying a right to employment for life. The car insurance balance and travel advance, being special damages, were not specifically proved and were therefore refused.

p. 11

Legal principles established

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  • Section 40(1) of the Employment Act contemplates two notices prior to redundancy, each of not less than one month, whether or not the employee is a union member
  • A non-unionised employee is entitled to the same protection as a unionised one, per constitutional equality
  • Consultation prior to declaration of redundancy is mandatory
  • An employer must do more than merely state a reason such as 'strategy review'; validity of the reason must be demonstrated
  • Compensation under section 49(1)(c) is computed on gross monthly wages or salary
  • A terminated employee remains liable to repay an outstanding car loan balance

Court orders

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  1. 1.Compensation for unfair termination of Kshs.1,744,209.00 (9 months' gross salary)
  2. 2.One month's gross salary for August 2015 of Kshs.193,801.00
  3. 3.Payment in lieu of notice of Kshs.112,401.00
  4. 4.Payment for 25 days' annual leave earned and not taken of Kshs.93,668.00
  5. 5.Service pay of Kshs.140,501.00 (one month's basic salary for every year of service)
  6. 6.Respondent to issue a certificate of service to the Claimant within 30 days of the judgment
  7. 7.Interest at court rates from the date of filing the suit till full payment
  8. 8.Costs of the claim awarded to the Claimant
  9. 9.Judgment entered for the Respondent on its counterclaim for Kshs.1,040,625.00 (car loan balance)
  10. 10.No order as to costs on the counterclaim
  11. 11.Amounts payable to the Claimant to be set off against the counterclaim award and statutory taxes

Authorities

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Legislation

  • Employment Actsections 2, 40(1)(a)-(g), 40(1)(2), 43, 45, 49(1), 49(1)(c), 49(c)
  • Labour Relations Actsection 2
  • Fair Administrative Action Act No. 4 of 2015section 4(3)
  • Constitution of Kenya, 2010Articles 2(6), 27(1)
  • ILO Convention, 1982 (Termination of Employment Convention No. 158) / Recommendation No. 166Article 13(1)

Cases cited (14)

  • Kenya Airways Limited Vs Aviation & Allied Workers Union & 3 others
    [2014] eKLR
  • Gladys Muthoni & 20 others Vs. Barclays Bank of Kenya Limited & another
    Constitutional Petition No. 25 of 2014; [2016] eKLR
  • Caroline Wanjiru Luzze Vs. Nestle Equitorial African Region Limited
  • Kenya Plantation and Agriculture Workers Union Vs. James Finlys (K) Limited
    [2013]
  • Tobias Ongaya Auma & 5 others Vs. Kenya Airways
    [2007]
  • Africa Nazarene University Vs. David Mutevu & 103 others
    [2017] eKLR
  • Steve Mutua Munga Vs. Homegrown (K) Limited & 2 others
    [2013] eKLR
  • Thomas De La Roe (K) Limited Vs. David Opondo Omutelema
    [2013]
  • Bertha Awour Kowido Vs. Speed Capital Limited
    [2019] eKLR
  • James Mwangi Muigai Vs. Murlosa Movers
    [2020] eKLR
  • Timothy K. Odindo Vs. Bakers Delight Holding Limited
    [2018] eKLR
  • John Kinyanjui Gateru Vs. Family Bank Limited
    [2016] eKLR
  • Kenya Tea Development Agency Ltd v Lee Kimathi
    [2015] eKLR
  • John William Strauss & another Vs. Plessey (PTY) Limited
    [2002] & BLLR 755 (CC)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claim for unfair termination and employer's counterclaim)

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, "George Otieno Rambo v Nation Media Group Limited [2021] KEELRC 899 (KLR)", Case Analysis (2021). Cause No 184 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/899/eng@2021-09-17

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