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ELRCPartially AllowedCause No E034 of 2021· [2023] KEELRC 1566 (KLR)

Ngege v Kamagambo Adventist College & another (Cause E034 of 2021) [2023] KEELRC 1566 (KLR)

Employment and Labour Relations Court
29 June 2023
4,533 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a college's redundancy unlawful for skipping the 30-day notice and selection criteria, awarding the employee compensation, notice pay, leave pay, and unremitted deductions.

What this practically means

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Executive summary

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The Claimant, formerly senior accountant and Acting Business Manager of the 1st Respondent, challenged his declaration of redundancy effective 30th July 2018, a unilateral reduction of his salary from Kshs 80,669.14 to Kshs 59,008.18 in January 2018, unpaid salaries for April to July 2018, and unremitted loan, HELB and PAYE deductions. He sought declarations that the salary reduction and redundancy were unlawful, reimbursement of deductions, notice pay, leave pay and compensation. The 1st Respondent justified the redundancy on liquidity problems and low student enrolment, contending full compliance with Section 40 of the Employment Act, and argued the Claimant himself prepared the wage sheet reducing salaries. It also sought the removal of the 2nd Respondent as an unregistered entity without capacity to be sued. The court framed three issues: the claim against the 2nd Respondent, the legality of the redundancy, and remedies. It found the 2nd Respondent exercised considerable control over the Claimant's work and declined to strike it out. The redundancy was held unlawful because the notice took effect immediately, denying the Claimant 30 days' notice under Section 40(1)(b), and no selection criteria were disclosed despite his seniority, breaching Section 40(1)(c). The salary reduction claim failed as the Claimant prepared and signed the wage sheet reducing salaries. Loan and HELB deductions were awarded as uncontroverted; PAYE was declined. Notice pay and one month's leave pay were awarded. The redundancy was declared unfair, with three months' compensation, a certificate of service, costs and interest to the Claimant.

Key legal issues

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01

Whether the 2nd Respondent was properly joined as an employer

Holding

The joinder was proper; the 2nd Respondent exercised considerable control over the Claimant's work performance and thus qualified as an employer.

Reasoning

Although the Claimant's salary was paid by the 1st Respondent and the redundancy notice was not copied to the 2nd Respondent, the 2nd Respondent approved the service call effecting the Claimant's transfer, was copied on his appointment letter to the position of Acting Deputy Principal Finance and Planning, and issued him a letter of appreciation. Applying the control test, the court held these facts demonstrated sufficient control to establish an employment relationship.

p. 6
02

Whether the declaration of redundancy was lawful

Holding

The redundancy was unlawful on account of the notice period and the selection criteria adopted.

Reasoning

The redundancy notice took effect immediately, denying the Claimant the 30 days' notice required by Section 40(1)(b) of the Employment Act. The labour officer himself flagged the notice period as violative of the law. Further, the Claimant was the senior most of three accountants and the 1st Respondent failed to demonstrate the criteria used to select him, breaching Section 40(1)(c). Following Kenya Airways and Paul Ngeno, the court found the termination unfair.

p. 8
03

Whether the unilateral reduction of salary was lawful

Holding

The claim for reduced salaries failed; the reduction was valid.

Reasoning

The Claimant, as financial advisor and Acting Business Manager, prepared and signed the Audit Wage Sheet applying reduced salaries to the entire workforce including himself, and drew the reduced salary for over five months without formal protest. The court held the employer had obtained employees' approval through the wage sheet the Claimant himself executed, and found him effectively estopped from challenging the reduction.

p. 9
04

Entitlement to deductions reimbursement, notice pay and leave

Holding

Loan and HELB deductions awarded as uncontroverted; PAYE declined; one month's notice pay awarded despite the excuse of unknown payment mode; one month's leave pay awarded.

Reasoning

The 1st Respondent did not deny owing unremitted loan and HELB deductions and never stated the amount it deemed due, so the claim was uncontroverted. PAYE was declined as a statutory deduction belonging to the revenue authority. Notice pay was admitted and the excuse of not knowing the Claimant's payment mode was rejected given seven years of salary payments. Leave pay was capped at one month under Section 90 as a continuing injury.

p. 9

Legal principles established

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  • Where an employee is not a union member, the employer must issue a personal written redundancy notice of not less than 30 days copied to the labour officer.
  • An employer must disclose the selection criteria used to choose an employee for redundancy, having regard to seniority, skill, ability and reliability under Section 40(1)(c) of the Employment Act.
  • A valid reduction of salary requires written communication to the employee and the employee's acceptance of the proposal.
  • Unremitted PAYE is not recoverable by the employee as it belongs to the statutory body once deducted.
  • An entity exercising considerable control over an employee's work performance may qualify as an employer notwithstanding that salaries were paid by another entity.

Court orders

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  1. 1.A declaration that the Claimant's redundancy is unfair
  2. 2.The Respondent pays the Claimant three months' salary as compensation for the unfair termination at Kshs 177,025.38/-
  3. 3.The Claimant be paid one month's salary in lieu of notice at Kshs 59,008.46/-
  4. 4.Payment of unremitted loan deductions at Kshs 70,816.05/-
  5. 5.Unremitted HELB deductions at Kshs 14,591.50/-
  6. 6.Payment for leave not taken at Kshs 59,008.46/-
  7. 7.The Claimant be issued with a certificate of service unconditionally
  8. 8.The Respondent shall bear the costs of the suit and interest until payment in full

Authorities

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Legislation

  • Employment ActSection 40(1)(a), (b), (c), (d), (e), (f), (g)
  • Employment ActSection 90
  • Employment Act, 2007Definition of 'employee' and 'employer'

Cases cited (7)

  • Maurice Oduor Okech v Chequered Flag Limited
    [2013] eKLR
  • Daniel Mburu Muriu v Hygrotech East Africa Ltd
    [2021] eKLR
  • Paul Ngeno v Pyrethrum Board of Kenya Limited
    [2013] eKLR
  • Ahmed Mwarumba Mwavita v Kocos Kenya Limited
    Employment and Labour Relations Court Claim No 35 of 2018 (Malindi)
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Yewens v Noakes
    (1880) 6 QB
  • Williams v Compare Maxam Ltd
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Ngege v Kamagambo Adventist College & another (Cause E034 of 2021) [2023] KEELRC 1566 (KLR)", Case Analysis (2023). Cause No E034 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1566/eng@2023-06-29

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