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ELRCDismissedCause No. 16 of 2020· [2022] KEELRC 1030 (KLR)

Sheila Kiplangat v Unliver Tea Kenya Limited [2022] KEELRC 1030 (KLR)

Employment and Labour Relations Court
20 January 2022
2,533 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 found a tea company's redundancy unfair for skipping legal notice steps, but a signed settlement voucher blocked the employee's compensation.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 6/8/2012 and promoted to Assistant Field Manager on 4/7/2018, was terminated on account of redundancy by letter dated 26/7/2019 effective 31/8/2019. She sued seeking declarations that the termination was unprocedural, unfair and discriminatory, compensation under section 49(1)(c) of the Employment Act, and quantum for discrimination equivalent to 12 months' gross salary. The respondent admitted the redundancy but contended it was lawful, substantively and procedurally, and that the claimant signed a discharge voucher releasing all further claims. The court framed three issues: whether the redundancy was justified; whether the section 40 procedure was followed; and whether the reliefs were merited. On justification, the claimant produced no evidence that her position still existed, and the court held that abolishing a position is a managerial prerogative; the redundancy was substantively justified. On procedure, however, RW1 admitted that the mandatory notice was never served on the labour officer, and the only prior memo concerned senior managers at Level 2, so the claimant received no notice one month prior as required by section 40(1)(a) and (b). The court declared the termination unfair, discriminatory and unlawful. On remedies, applying Thomas De La Rue and Coastal Brothers, the court found the discharge voucher of 29/7/2019 was signed voluntarily and without vitiating factors; it constituted a binding contract and the claimant was estopped from claiming further. The suit was dismissed, but the court declined to award costs to the employer because it violated the law in effecting the termination.

Key legal issues

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01

Whether the redundancy was justified

Holding

Yes - the respondent proved by evidence that the position of Assistant Field Manager, Kericho, was abolished in the new organizational structure.

Reasoning

The claimant alleged her former position still existed and was occupied by another person but tendered no evidence to support that allegation. The employer's decision on the necessity of a position is a managerial prerogative; it cannot be interfered with absent proof that the procedure followed was wrong or unfair. The respondent therefore discharged the evidential burden under section 47(5).

p. 3
02

Whether the procedure under section 40 of the Employment Act was followed

Holding

No - the mandatory notice of intended redundancy was neither served on the labour officer nor on the claimant at least one month before the redundancy.

Reasoning

RW1 admitted the labour officer was never served with the mandatory notice. The only prior communication, the memo of 5/7/2019, concerned senior managers at Level 2 only. The claimant first received a termination notice on 26/7/2019, effective 31/8/2019, without prior consultation. This breached the mandatory procedure in section 40(1)(a) and (b) and denied the parties a chance to consult.

p. 4
03

Whether the signed discharge voucher bars the claimant's claim

Holding

Yes - the discharge voucher was signed voluntarily with full knowledge and constitutes a binding contract, waiving further claims and estopping the claimant.

Reasoning

Guided by the Court of Appeal in Thomas De La Rue and Coastal Brothers, the court examined whether the voucher was freely and willingly executed. The claimant admitted signing it and never alleged mistake, coercion, misrepresentation or undue influence. In the absence of vitiating factors, the voucher was a binding contract and the claimant was estopped from pressing further reliefs.

p. 5

Legal principles established

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  • The burden of justifying the reason for termination of an employee's employment lies with the employer under section 47(5) of the Employment Act.
  • The decision to abolish a position is a managerial prerogative not to be interfered with unless the procedure followed was wrong or unfair.
  • Procedural failure under section 40(1)(a) and (b) renders a redundancy unfair but not null and void; it entitles the claimant to section 49 remedies.
  • A discharge voucher per se does not absolve an employer from statutory obligation; the court must determine whether it was freely and willingly executed.

Court orders

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  1. 1.Declaration that the termination was unfair, discriminatory and unlawful
  2. 2.Dismissal of the claimant's suit as prayed by the respondent
  3. 3.No costs awarded to the employer for violating the law in effecting the termination

Authorities

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Legislation

  • Employment Actsection 40(1)(a) and (b)
  • Employment Actsection 49(1)(c)
  • Employment Actsection 47(5)
  • Employment ActCap 226
  • Constitution of Kenya, 2010
  • ELRC Procedure RulesRule 28(3)

Cases cited (6)

  • Fredrick Mulwa Mutiso – V – Kenya Commercial Bank Ltd
    [2017] eKLR
  • Thomas De La Rue (K) Ltd – Vs David Opondo Omutelema
    [2013]
  • Margaret Mumbi Mwangi – V- Intra Health International
    [2017] eKLR
  • Carol Atieno Osweta – Vs- Kenya Yungheng Plate Making Ltd
    [2013] eKLR
  • Addah Adhiambo Obiero v Ard Inc
    [2014] eKLR
  • Costal Bothers Limited – V – Kimathi Mithika
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, Cap 226 (sections 40, 47(5) and 49) invoked in a first-instance unfair termination claim

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Sheila Kiplangat v Unliver Tea Kenya Limited [2022] KEELRC 1030 (KLR)", Case Analysis (2022). Cause No. 16 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1030/eng@2022-01-20

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