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ELRCPartially AllowedNot stated in the judgment· [2022] KEELRC 1067 (KLR)

Kenya Union of Commercial and Allied Workers v London Distillers (K) Limited [2022] KEELRC 1067 (KLR)

Employment and Labour Relations Court
19 January 2022
MOMaureen Onyango
5,383 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that London Distillers unfairly laid off and retired workers, holding COVID-19 does not excuse employers from following proper redundancy procedures.

What this practically means

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Executive summary

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The claimant union challenged the respondent's August 2020 redundancies of ten employees and retirement of five employees at its Athi River factory, effected via a 12th August 2020 notice-board notice citing COVID-19, followed by three-day termination letters. The claimant alleged breach of Sections 40 and 41 of the Employment Act and Clauses 6, 22 and 23 of the parties' CBA, including failure to notify the union and labour officers at the relevant stations, inadequate notice, service pay computed at 15 rather than 60 days, retirement service pay at 15 rather than 70 days per year, and anti-union conduct including attempts to terminate the Recognition Agreement and stoppage of union dues. The respondent defended the action as a genuine business response to COVID-19 and reliance on presidential directives, arguing no pre-redundancy consultation is required. The court held that a registered CBA is binding and its terms subsumed into employees' contracts and cannot be constructively vitiated; that neither notice complied with Section 40 or the CBA; that no individual notices were issued; and that COVID-19 protocols authorised only safe working conditions, not terminations. Both redundancies and retirements were declared unfair. Reinstatement was refused owing to the respondent's hostile attitude; instead the court awarded each grievant salary to 31st August 2020, notice pay, severance or retirement service pay per the CBA, untaken leave, and ten months' salary compensation, with deductions for sums already paid, interest as specified, and costs to the claimant.

Key legal issues

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01

Compliance of the redundancies with Section 40 of the Employment Act and Clauses 6 and 23 of the CBA

Holding

The redundancies were procedurally unfair: no individual notice was issued to affected employees, the Union was not notified, the labour officer notice went only to Nairobi despite employees stationed in Kisumu, Eldoret, Nakuru and Nanyuki, and timelines were not met

Reasoning

Section 40(1)(a) requires notification of the union and the labour officer of the area where employees are employed not less than a month before termination. The notice-board notice addressed no one, no individual notices issued, the Union received no notification, and the labour officer notice covered only Industrial Area, Nairobi. The Respondent also failed to demonstrate the selection criteria or tender tabulations of terminal dues.

p. 8
02

Compliance of the retirements with Clause 22 of the CBA

Holding

The retirements were unfair; the Respondent did not show that the retired employees had attained retirement age nor comply with the 45 days' notice requirement, and service pay was computed at 15 days rather than the contractual 70 days per year

Reasoning

Clause 22 required 45 days' written notice for retirement and 70 days' service pay per completed year. The Respondent instead offered one month's pay in lieu of notice and 15 days' service pay per year, and did not demonstrate the selected employees had attained the retirement age of 60 or validly elected early retirement.

p. 8
03

Status of the CBA and the attempted termination of the Recognition Agreement

Holding

The CBA remains valid and binding; a registered CBA's terms are incorporated into employees' contracts and cannot be constructively vitiated or terminated

Reasoning

Section 59 of the Labour Relations Act renders registered collective agreements binding and incorporates their terms into contracts of employment. The Respondent alleged the CBA was constructively vitiated but gave no particulars of violations. The 2017 letter expressing intent to terminate the Recognition Agreement had no effect on the CBA.

p. 7
04

Whether COVID-19 directives justified the redundancies and retirements

Holding

No; the COVID-19 protocols only required safe working conditions and did not authorise redundancy, retirement or breach of the Employment Act

Reasoning

The Respondent invoked Presidential directives that employees over 58 stay home, but the court held those protocols concerned workplace safety only. Employers remained bound to comply with statutory and contractual requirements when releasing workers on redundancy or retirement grounds.

p. 8

Legal principles established

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  • A registered CBA cannot be vitiated constructively or terminated; its terms become subsumed into the contracts of employment of covered employees
  • Redundancy and retirement must comply fully with both the statutory requirements of Section 40 of the Employment Act and the applicable CBA provisions
  • COVID-19 protocols and government directives do not authorise employers to breach employment law when laying off workers

Court orders

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  1. 1.Declaration that both the redundancies and the retirements amounted to unfair termination of employment
  2. 2.For employees declared redundant: salary up to 31st August 2020; one month's gross salary in lieu of notification of intended redundancy under Section 40(1)(a); pay in lieu of notice per Clause 23(c) read with Clause 6 of the CBA; severance pay per Clause 23(d) read with Clause 6 of the CBA; any untaken leave; compensation equivalent to 10 months' salary
  3. 3.For retired employees: salary up to 31st August 2020; pay in lieu of notice of 45 days per Clause 22(f) of the CBA; 70 days service pay per completed year of service per Clause 22(d) of the CBA; Kshs.27,000/- lumpsum per Clause 22(f) of the CBA; any untaken leave; compensation equivalent to 10 months' salary
  4. 4.Payments already made to the employees to be deducted from amounts payable
  5. 5.Interest from date of filing suit for all items except compensation, which accrues interest from date of judgment
  6. 6.Costs of the suit awarded to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Sections 2, 40, 40(1), 40(1)(a), 40(1)(f), 41
  • Labour Relations ActSection 59
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticles 159(2)(d), 48

Cases cited (6)

  • Mornach Insurance Co. Ltd v Industrial Court & Another
    [2015] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union of Kenya & 3 Others
    [2014] eKLR
  • Aoraki Corporations Limited v Collin Keithmcgavin
    CA 2 OF 1997 [1988] 2 NZLR
  • G. N. Hale & Son Ltd v Wellington Caretakers IUA
  • David Magoti v Kenya Tea Development Authority
    Civil Appeal No. 165 of 1997
  • Kenya Plantation & Agricultural Workers Union v James Finley (K) Limited
    [2013] eKLR
Jurisdiction invoked
First-instance employment and labour relations dispute before the Employment and Labour Relations Court

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, "Kenya Union of Commercial and Allied Workers v London Distillers (K) Limited [2022] KEELRC 1067 (KLR)", Case Analysis (2022). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1067/eng@2022-01-19

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