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ELRCPartially AllowedEmployment cause (memorandum of claim dated 26th March 2018, amended 1st April 2019) - number not stated in judgment· [2022] KEELRC 901 (KLR)

Dennis Leak Ojuok v Population Services Kenya [2022] KEELRC 901 (KLR)

Employment and Labour Relations Court
31 January 2022
6,022 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, formerly Regional Manager of the Respondent's Lakeside region, challenged his termination by redundancy effected on 31st March 2019 following the end of AHME and CIFF donor funding. He sought declarations that the redundancy proceedings were null and void or that the termination was wrongful and unfair, plus 12 months' salary as compensation, severance pay, notice pay, general and exemplary damages, costs and interest. The Respondent maintained that 44 employees across cadres were declared redundant in accordance with section 40 of the Employment Act owing to a 35% cut in donor funding and a new operating model abolishing the regional manager position. The court framed two issues: whether the redundancy was valid, and whether the Claimant was entitled to relief. It held the redundancy was justified on economic grounds and that the notices to the labour officer and the employee complied with section 40(1)(a) and (b), holding that the relevant labour officer is the one where the employer's headquarters operates. However, the employer produced no written selection criteria, and compliance with seniority and last-in-first-out was not demonstrated; the criteria were found opaque and the redundancy unfair and wrongful. Severance pay and accrued leave had been provided for, but notice pay was awarded as it was missing from terminal dues. Applying section 49 and following the Court of Appeal in the Kenya Airways case, the court awarded six months' gross salary (Kshs. 1,377,288) as damages, plus notice pay of Kshs. 228,548 and severance of Kshs. 573,870 if not already paid, all subject to statutory deductions, with costs and interest from the date of judgment to the Claimant. The judgment was delivered at Bungoma on 31st January 2022 by J. W. Keli, Judge.

Key legal issues

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01

Validity of the redundancy notices to the labour officer and the employee

Holding

The notices complied with section 40(1)(a) and (b) of the Employment Act; notice to the labour officer Nairobi, where the employer's headquarters is based, was sufficient despite the Claimant working in the Lakeside region

Reasoning

The court held that the employer, though having regional offices, is based in Nairobi and the local labour officer of the headquarters retains jurisdiction over all employees under the employer. The notice dated 30th January 2019 was an intention notice given more than a month before termination on 31st March 2019, and the employee was also personally notified. The claim that notice should have gone to Nyanza region had no basis in law.

p. 4
02

Fairness and objectivity of the selection criteria

Holding

The redundancy was procedurally unfair because the employer produced no document setting out the selection criteria, and length of service and the last-in-first-out principle were not demonstrated to have been applied

Reasoning

Although economic reasons (ending of AHME and CIFF funding and a new operating model) justified the redundancy, the employer never placed before the court any written criteria or minutes of the meetings showing how the affected employees were selected. The alleged poor performance ground was unsupported, and redundancy is not a remedy for poor performance. The employer also failed to show regard to seniority and the claimant's 5 years of service.

p. 6
03

Entitlement to severance pay, leave and notice pay

Holding

Severance pay of 15 days per completed year for 5 full years (Kshs. 573,870) and accrued leave had been provided for and complied with; notice pay of Kshs. 228,548 was awarded as it was not reflected in the terminal dues

Reasoning

The contract dated 14th December 2013 took effect on 1st January 2014 and the redundancy took effect on 31st March 2019, giving 5 full years of service. The computation of Kshs. 114,774 x 5 matched the figure in the redundancy notice letter, so the Respondent had complied with the law and contract on severance and leave. The one month's notice pay under section 40(1)(f) was, however, missing from the terminal dues and was awarded.

p. 7
04

Compensation for unfair termination

Holding

An award of six months' gross monthly salary (Kshs. 1,377,288) was adequate, following the Court of Appeal's approach in the Kenya Airways case and considering section 49 factors including the Claimant's subsequent employment in the USA and his age

Reasoning

Having found the termination unfair and wrongful, the court considered the statutory factors under section 49 of the Employment Act, including the Claimant's status post-termination (now employed in the USA) and his age. The court aligned itself with the Court of Appeal in Kenya Airways Ltd v Aviation & Allied Workers Union, where six months' gross salary was awarded for unfair redundancy, and awarded the same.

p. 7

Legal principles established

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  • Though economic reasons are justifiable grounds for declaring redundancy, the employer must have and disclose a fair and objective selection criteria to the affected employees under section 40(1)(c) of the Employment Act
  • Redundancy is not a remedy for poor performance
  • The 'local labour officer' under section 40(1) is the one within whose jurisdiction the employer's headquarters operates, not the office of the employee's deployment

Court orders

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  1. 1.Declaration implied by finding that the Respondent did not apply a fair selection criteria under section 40(1)(c) and unlawfully terminated the employment
  2. 2.Damages for unfair termination of six months gross monthly salary at Kshs. 229,548 x 6 = Kshs. 1,377,288
  3. 3.Notice pay of Kshs. 228,548 to be settled if not already paid
  4. 4.Severance pay of Kshs. 573,870 to be settled if not already paid
  5. 5.All amounts to be subject to statutory deductions
  6. 6.Costs of the suit to the Claimant
  7. 7.Interest on the claim from date of judgment until payment in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007)

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, "Dennis Leak Ojuok v Population Services Kenya [2022] KEELRC 901 (KLR)", Case Analysis (2022). Employment cause (memorandum of claim dated 26th March 2018, amended 1st April 2019) - number not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/901/eng@2022-01-31

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