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ELRCPartially AllowedStatement of Claim dated 25th July 2016 (ELRC, Nairobi)· [2022] KEELRC 1118 (KLR)

Kirigo v World Vision International (Cause 1449 of 2016) [2022] KEELRC 1118 (KLR)

Employment and Labour Relations Court
20 June 2022
6,596 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled World Vision unfairly made an employee redundant and awarded her five months' salary because the employer skipped required consultation and paperwork.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 1st June 2011 and promoted from Executive Assistant to Program Officer, sued over the termination of her employment on account of redundancy by notice dated 30th September 2015, handed over on 15th October 2015, effective 31st December 2015. She claimed compensation for the unexpired 21 months of a two-year contract renewed on 6th August 2015, accrued leave, twelve months' salary under Section 49 of the Employment Act, a certificate of service, costs and interest, contending the redundancy was artificial and orchestrated to remove her. The Respondent maintained a restructuring of the Humanitarian and Emergency Affairs Department down/right-sized the workforce, that the process was fair and consultative, and that the Claimant lacked skills for the new roles. The Court framed two issues: whether the termination was on account of a lawful redundancy and entitlement to reliefs. Applying Section 40 of the Employment Act and the Kenya Airways and Barclays Bank authorities, the Court found the Respondent failed to prove service of the notice on the Labour Officer, that the letter did not set out the reasons for and extent of the redundancy, that no consultation preceded the decision, that the November 2015 meetings were ex post facto, and that no restructuring was established since all organograms retained the Claimant's position and only she was affected. The redundancy was therefore unfair. Compensation for the unexpired contract term and leave were declined as anticipatory, unpleaded benefits, and the certificate of service had already been issued. The Court awarded the equivalent of five months' salary, Kshs.768,517.20, with costs and interest from judgment.

Key legal issues

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01

Whether there was a genuine redundancy/restructuring justifying termination

Holding

The Respondent failed on a balance of probabilities to establish that there was a restructuring of the organization or the department, or that a genuine redundancy existed

Reasoning

Other than a supervisor's email of 23rd September 2015, no documentary evidence of restructuring was tendered; all organograms on record, including one circulated in October 2015, retained the Claimant's position; only the Claimant was affected; and the Respondent provided no organogram showing the position abolished. The Court accepted that restructuring does not just happen - it is an elaborate, consultative process with a beginning, life and end.

p. 12
02

Whether the notice of redundancy complied with Section 40(1)(a) and (b) of the Employment Act

Holding

It did not. The letter was specific to the Claimant, communicated a decision already made, did not set out the reasons for and extent of the redundancy, and there was no evidence it was served on the Labour Officer

Reasoning

The letter referenced 'End Of Contract', was not a general notice, made no reference to consultations, and was not copied to anyone. RW1 asserted the Labour Office was informed but tendered no evidence of delivery or receipt. The notice was invalid for purposes of a redundancy since it communicated a decision rather than an intention triggering consultation.

p. 11
03

Whether consultation before declaring redundancy is mandatory and whether it took place

Holding

Consultation is an imperative requirement implicit in Section 40(1) and it did not take place; the November 2015 meetings were ex post facto and ineffectual

Reasoning

Following Maraga JA's dicta in the Kenya Airways case and the Court of Appeal's endorsement in Barclays Bank, the notices under Section 40(1) are not merely for information and must elicit consultation. Here the Respondent engaged the Claimant only after the decision, and the letter itself suggested counselling, indicating she had not been consulted.

p. 12
04

Whether the Claimant was entitled to compensation for the unexpired term of her fixed-term contract

Holding

The claim was declined; anticipatory benefits are not anchored in law where the contract has a termination clause

Reasoning

Following Elizabeth Wakanyi Kibe v Telkom Kenya Ltd and D.K. Njagi Marete v Teachers Service Commission, anticipatory earnings have no legal justification. The contract dated 1st June 2011 provided for termination by 30 days' notice or one month's salary in lieu, so there was no representation the Claimant would serve the full term.

p. 13
05

What relief is due under Section 49 of the Employment Act

Holding

The equivalent of five (5) months' salary, Kshs.768,517.20, awarded as fair compensation

Reasoning

The Court considered the Section 49(4) factors: 4½ years of service and progression from Executive Assistant to Program Officer; satisfactory performance with no disciplinary issues; the Claimant's wish to continue working; and the unique circumstances - the contract had just been renewed for two years, September 2015 communications were represented as ordinary while the Supervisor concealed the separation agenda, and no effort was made to prepare the Claimant for exit.

p. 14

Legal principles established

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  • A court of law has no mandate to prevent an employer from restructuring or re-organizing its business or adopting modern technology as long as the law is complied with
  • An employer bears the burden of demonstrating the reasons for and extent of a redundancy; the notice to the employee and the labour officer must set out the reasons for and the extent of the intended redundancy, and consultation is an imperative requirement before a redundancy is declared
  • The notice of termination on account of redundancy should be the last step of the process; consultations must occur before the redundancy process is actualized, and post-decision meetings are ineffectual as consultations
  • Anticipatory earnings or compensation for the unserved remainder of a fixed-term contract have no legal justification where the contract contains a termination clause
  • Notice to the labour officer must be evidenced; an assertion of service without documentary proof means the employer has failed to discharge the burden of proof under Section 40(1)(a) and (b)

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for the sum of Kshs.768,517.20 being five months' salary equivalent under Section 49(1)(c) of the Employment Act
  2. 2.Costs of the suit awarded to the Claimant
  3. 3.Interest at court rates from the date of judgment till payment in full

Authorities

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Legislation

  • Employment ActSection 2
  • Employment ActSection 40 (including 40(1)(a), 40(1)(b), 40(1)(c))
  • Employment ActSections 43 and 45
  • Employment ActSection 49 (including 49(1)(c) and 49(4))
  • Labour Relations Act, 2007Part VIII; Section 62(4)
  • Constitution of KenyaArticle 2(6)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (20)

  • Daniel Mburu Muriu v Hygrotech East Africa Ltd
    [2021] eKLR
  • Agnes Ongadi v Kenya Electricity Transmission Company Limited
    [2016] eKLR
  • Jane I. Khalechi v Oxford University Press E.A. Ltd
    [2013] eKLR
  • Mary Nyawira Karimi v Pure Circle (K) Limited
    [2018] eKLR
  • Chapman v Goonvean & Rostowrack China Clay Limited
    [1973] 2 All ER
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Bakery, Confectionery, Food Manufacturing & allied Workers Union (K) v Bakers Oven Limited
    [2021] eKLR
  • Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
    [2018] eKLR
  • Hesbon Ngaruiya Waigi v Equatorial Commercial Bank Limited
    [2013] eKLR
  • Dennis Leak Ojuok v Population Services Kenya
    [2022] eKLR
  • Mary Mutanu Mwendwa v Ayuda Ninos De Africa-Kenya (Anidan K
    [2013] eKLR
  • Faiza Mayabi v First Community Bank Limited
    [2019] eKLR
  • Aoraki Corporations Limited v Collin Keith McGavin
    CA 2 of 1997 [1998] 2 NZLR 278
  • Freight In Time Limited v Rosebell Wambui Munene
    [2018] eKLR
  • Monarch Insurance Co. Ltd v Industrial Court & another
    [2015] eKLR
  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    [2013] eKLR
  • BMD Knitting Mills (pty) Ltd v South African Clothing & Textile Workers Union
    1998 (19) ILJ 1451 (LAC)
  • Elizabeth Wakanyi Kibe v Telkom Kenya Ltd
    [2014] eKLR
  • D. K. Njagi Marete v Teachers Service Commission
    [2020] eKLR
  • Engineer Francis N. Gachuri v Energy Regulatory Commission
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (including Section 12 and Section 49 remedies)

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, "Kirigo v World Vision International (Cause 1449 of 2016) [2022] KEELRC 1118 (KLR)", Case Analysis (2022). Statement of Claim dated 25th July 2016 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1118/eng@2022-06-20

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