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ELRCPartially AllowedCause No. 498 of 2016· [2021] KEELRC 2251 (KLR)

Joseph Ayora Omwena v Multiscope Consulting Engineering Limited [2021] KEELRC 2251 (KLR)

Employment and Labour Relations Court
26 January 2021
2,816 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled an engineer's redundancy unfair because his employer skipped mandatory notice and severance steps, awarding him nearly Kshs. 3 million.

What this practically means

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Executive summary

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The Claimant, an Engineering Surveyor employed by the Respondent on 15 March 2012 at a gross salary of Kshs. 190,000 per month, claimed unfair and unlawful termination and various dues. He sought unpaid salary for three months and 15 days, refund of a medical cover deduction, house allowance for 43 months, out-of-station subsistence and travel allowance for 75 days, and 12 months' salary as compensation for unfair termination. The Respondent contended that the Claimant deserted duty after taking 15 days' leave in May 2015 and that his dues were settled on 11 November 2015. The court found that the termination letter of 26 October 2015 declared the Claimant redundant, as the client could no longer sustain his calibre of staff on site. Consequently, the desertion defence failed. Applying Section 40 of the Employment Act 2007, the court held that the Respondent gave no notice and did not pay all outstanding dues, rendering the redundancy unfair and unjustified. The court awarded the Claimant Kshs. 161,734 being the unlawfully deducted medical cover, 10 months' salary (Kshs. 1,900,000) as compensation for unfair redundancy, unpaid salary of Kshs. 655,000 for May to mid-August 2015, and out-of-pocket allowance of Kshs. 262,500 for 75 days at Kshs. 3,500 per day, totalling Kshs. 2,979,234 less statutory deductions. The claims for house allowance and the full 12 months' compensation were not granted. The Respondent was ordered to pay costs plus interest at court rates from the date of judgment.

Key legal issues

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01

Nature of the termination

Holding

The termination letter declared the Claimant redundant as his services were no longer required

Reasoning

The court examined the termination letter dated 26/10/2015 which stated the client could not sustain the Claimant's caliber of staff on site. The judge construed this as a declaration of redundancy, which defeated the Respondent's desertion narrative since the Respondent itself characterized the exit as redundancy in the letter.

p. 4
02

Compliance with Section 40 Employment Act

Holding

The redundancy was unfair and unjustified because the statutory conditions were not met

Reasoning

Section 40 prescribes mandatory conditions including notification of the employee personally in writing and the labour officer, payment of leave, one month's notice or wages in lieu, and severance pay at not less than fifteen days' pay per completed year. The court found no indication the Claimant was given notice or paid all outstanding dues, rendering the redundancy unfair.

p. 4
03

Entitlement to compensation and terminal dues

Holding

Claimant awarded 10 months' salary compensation, refund of medical cover deduction, unpaid salary and out-of-pocket allowance

Reasoning

Having found unfair redundancy, the court exercised its discretion to award compensation for unfair redundancy and terminal dues, fixing compensation at 10 months' salary rather than the 12 months sought, and awarding the medical cover refund and unpaid salary for May to mid-August 2015.

p. 4

Legal principles established

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  • An employer must comply with the conditions in Section 40 of the Employment Act before terminating on account of redundancy; failure to give notice and pay dues renders the redundancy unfair
  • Where an employee is terminated by redundancy, a claim of desertion cannot sustain

Court orders

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  1. 1.Payment of Kshs.161,734 deducted on account of medical cover
  2. 2.Payment of 10 months' salary as compensation for unfair redundancy (Kshs. 1,900,000)
  3. 3.Payment of unpaid salary for May, June, July and 15 days of August 2015 (Kshs. 655,000)
  4. 4.Payment of unpaid out of pocket allowance for 75 days at Kshs. 3,500 per day (Kshs. 262,500), total Kshs. 2,979,234 less statutory deductions
  5. 5.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Act 2007Section 2 (definition of redundancy)
  • Employment Act 2007Section 40
  • Employment Act 2007Section 31(2)

Cases cited (4)

  • Kenya Plantation and Agricultural Workers Union v James Finlay (K) Limited
  • James Ang'awa Atana & 10 Others v Judicial Service Commission
    Petition 23 of 2016
  • Kenfreight (EA) Limited v Benson K. Nguti
  • Elizabeth Kwamboka Khaemba v BOG Cardinal Otunga High School Mosocho & 2 others
    Cause No. 90 of 2013
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (unfair termination and terminal dues claim)

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, "Joseph Ayora Omwena v Multiscope Consulting Engineering Limited [2021] KEELRC 2251 (KLR)", Case Analysis (2021). Cause No. 498 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2251/eng@2021-01-26

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