Ileli v Telkom Kenya Limited (Cause 1617 of 2016) [2022] KEELRC 1571 (KLR)
The bottom line
#Kenya's Employment Court dismissed a Safaricom employee's claims, holding his redundancy was lawful and lump-sum redundancy payments are subject to PAYE tax deductions.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy was unlawful or discriminatory (targeted on account of injuries)
The redundancy was lawful; the claimant failed to prove he was targeted on account of his injuries
The restructuring affected all financial representatives; the union negotiated on the claimant's behalf; the court in ELRC Cause No 2287 of 2015 found consultations occurred and section 40 of the Employment Act was complied with, and no appeal was preferred against that finding. The redundancy letter made no reference to incapacity, the claimant never complained to the employer about alleged incapacity, and a 14-month delay between injury and redundancy undermined the targeting claim.
Whether the claimant was entitled to compensation for injuries sustained in the two grenade attacks
Claim refused for failure to plead and prove the injuries
The claimant did not particularise the injuries, led no medical evidence of their nature, severity or recovery, and admitted receiving medical care at the respondent's cost and Kshs 121,517 from AIG Insurance. Reliance placed on the pleadings principle in Antony Francis Wareham and the requirement of credible medical evidence to assess damages.
Whether the deduction of Kshs 618,131.64 was illegal and refundable
Not refundable; it was lawful PAYE and the tax waiver agreement was ineffectual
Under sections 3(1), 5(2) and 37 of the Income Tax Act, the employer was obliged to deduct and remit tax on the lump-sum redundancy payment. The claimant gave no details of the alleged tax waiver, and in any event an employer cannot waive taxes due; an agreement not to deduct tax to enable evasion is illegal at common law.
Whether salary till retirement was payable
Claim dismissed as the lawful redundancy validly ended the contract
Redundancy is a legitimate mode of terminating employment. The claimant was paid Kshs 2,060,438.81, more than the salary he would have earned over his remaining two years to retirement, and no evidence of pension loss was furnished.
Legal principles established
#- An employer has no legal capacity to waive payment of taxes by an employee; an agreement not to deduct PAYE to enable an employee evade tax is illegal and ineffectual
- Lump-sum terminal dues on redundancy are subject to statutory deductions (PAYE) under sections 3, 5(2) and 37 of the Income Tax Act
- Where an employee is a member of a trade union, the employer deals with the employee through the union in a redundancy process
- Only evidence of facts pleaded is admissible, and a court cannot grant relief not sought or founded on unpleaded matters
Court orders
#- 1.The claimant's claim is dismissed in its entirety
- 2.No order as to costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance statement of claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ileli v Telkom Kenya Limited (Cause 1617 of 2016) [2022] KEELRC 1571 (KLR)", Case Analysis (2022). ELRC Cause (statement of claim dated August 8, 2016, filed August 12, 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1571/eng@2022-06-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.