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ELRCPartially AllowedCause No. 103 of 2017· [2021] KEELRC 1445 (KLR)

Richard Clifford O Awino v United Millers Limited [2021] KEELRC 1445 (KLR)

Employment and Labour Relations Court of Kenya
27 January 2021
MMM. Mbaru
1,040 words in judgment
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The bottom line

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A Kenyan court upheld a redundancy as fair but ordered the employer to pay Ksh. 97,840 in unpaid terminal dues because it couldn't prove full payment.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a stores clerk from 3rd January 2011, was terminated by internal memo dated 30th January 2017 on grounds of redundancy arising from the respondent's declining business, which had led to closure of depots and silos and a 50% productivity decline by mid-2016. He sued for notice pay, unpaid leave, six years' severance pay and compensation for unfair termination totalling over Ksh. 1 million. The respondent, through its human resources manager, maintained that it followed the redundancy framework in its collective agreement with the Bakery, Confectionary, Manufacturing and Allied Workers Union: it notified the union and the County Labour Officer in December 2016, met the union, and issued individual notice on 30th January 2017, paying terminal dues of Ksh. 163,353.75 (or, it claimed, Ksh. 219,345). The court held that the redundancy was for valid operational reasons and that due process under section 40 of the Employment Act, 2007 and the CBA was followed: the union was informed, the claimant received individual notice, and he was not singled out. The unfair termination claim therefore failed. However, the respondent's assertion that it paid Ksh. 219,354 was unsupported by evidence; the records showed only Ksh. 163,353.75 paid. Recomputing the entitlement on the monthly wage of about Ksh. 63,069, the court found total terminal dues of Ksh. 261,193.75 and entered judgment for the balance of Ksh. 97,840, subject to taxation under section 49(2) of the Employment Act. Judgment delivered at Nairobi on 27th January 2021.

Key legal issues

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01

Whether the termination on grounds of redundancy was fair and lawful

Holding

The termination was for valid reasons; the unfair termination claim failed because the respondent notified the union, gave notice under section 40(1) and the CBA, issued individual notice to the claimant and did not single him out.

Reasoning

The respondent experienced declining business, closing depots and silos and losing 50% productivity by mid-2016. It had a recognition agreement with the union, wrote to the union and County Labour Officer of the intended redundancy, met the union, and issued individual notice dated 30th January 2017 with the list of affected employees. The court held these steps satisfied section 40 and the CBA redundancy framework.

p. 2
02

Adequacy of the terminal dues paid

Holding

The claimant was underpaid; on a monthly wage of Ksh. 63,069 his entitlement totalled Ksh. 261,193.75, leaving a balance of Ksh. 97,840 after the payment of Ksh. 163,353.75, subject to taxation.

Reasoning

The defence's figure of Ksh. 219,354 paid on 1st March 2017 was unsupported by any documentary evidence; the records attached to the defence showed payment of only Ksh. 163,353.75. Recomputing the dues (pay to 31st January 2017, notice pay, leave pay and six years' severance at 15 days per year) gave Ksh. 261,193.75, hence the balance awarded.

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Legal principles established

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  • A redundancy requires the employer to follow the procedure under section 40 of the Employment Act, including notice of the operational reasons, notice to the affected employee and payment of terminal dues.
  • Where an employer alleges payment of terminal dues beyond what the claimant received, the burden lies on the employer to produce evidence of that payment.

Court orders

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  1. 1.Judgment entered for the claimant against the respondent for payment of Ksh. 97,840 subject to the provisions of section 49(2) of the Employment Act, 2007
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007; sections 40 and 49(2))

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, "Richard Clifford O Awino v United Millers Limited [2021] KEELRC 1445 (KLR)", Case Analysis (2021). Cause No. 103 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1445/eng@2021-01-27

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