Washington Onyango Awino v Reliable Electrical Engineers (Nbi) Ltd [2021] KEELRC 1061 (KLR)
The bottom line
#An employer who skips the mandatory one-month redundancy notice and severance payments must pay months of extra compensation, even if the redundancy itself was justified.
What this practically means
#Executive summary
#Key legal issues
#Whether the takeover of the Respondent's business constituted a valid reason for redundancy
Yes - the takeover by Reliable Fabricators Ltd rendered the Claimant's position superfluous and was a valid reason.
Section 2 of the Employment Act defines redundancy as loss of employment where the employee's services are superfluous, including abolition of office or job. The Claimant did not deny the takeover and even applied unsuccessfully for a job with the new company. The court therefore found the reason valid and justified.
Whether the section 40 redundancy procedure was complied with
No - no sufficient one month written notice was served on the union and labour officer, and severance pay under the CBA and the law was not paid.
Section 40(1) mandates at least one month's prior written notice to the employees' union and area labour officer, fair selection, payment of accrued leave, notice pay and severance pay of at least 15 days per completed year. The only letter produced was dated 4.12.2015 but served 7.12.2015, insufficient notice for the 31.12.2015 effective date. Payslips for 2009-2015 only evidenced service/severance pay; nothing proved for the earlier years of the 19-year service.
Whether the alleged settlement with the union barred the claim
No - the correspondence of 4.12.2015 and 8.12.2015 did not amount to an enforceable settlement agreement.
Unlike Coast Bottlers Ltd v Kimathi Mithika where a signed settlement recorded full and final settlement and discharge, the exchange of letters here fell short of a binding settlement capable of denying the Claimant a remedy. Further, parties cannot contract out of express statutory provisions such as section 40.
What relief flows from the unlawful termination
Compensation of 10 months' salary (Kshs. 281,930) under sections 49(1) and 50 of the Employment Act; notice and severance claims folded into or declined.
In exercising discretion under section 49(1) read with section 50, the court considered the Claimant's long service of 19 years and that he contributed no fault to the termination. The compensation award also settled the severance claim, and the notice claim failed as the notice pay was admitted paid.
Legal principles established
#- Compliance with the mandatory redundancy procedure in section 40 of the Employment Act, including one month's notice to the union and labour officer and payment of severance pay, is required; failure renders the termination unlawful.
- Parties cannot by consent or settlement circumvent an express provision of the law.
Court orders
#- 1.Judgment entered for the Claimant in the sum of Kshs. 281,930.00
- 2.Costs of the cause to the Claimant
- 3.Interest at court rate from the date of judgment
- 4.Award to be paid subject to statutory deductions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (sections 2, 40, 45, 49 and 50) and the ELRC Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Washington Onyango Awino v Reliable Electrical Engineers (Nbi) Ltd [2021] KEELRC 1061 (KLR)", Case Analysis (2021). Not stated in judgment (ELRC cause filed 8.3.2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1061/eng@2021-08-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.