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ELRCPartially AllowedCause No E014 of 2022· [2023] KEELRC 1877 (KLR)

Ouko v Kenya Chemical Workers Union (Cause E014 of 2022) [2023] KEELRC 1877 (KLR)

Employment and Labour Relations Court
27 July 2023
CBChristine N. Baari
2,105 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who 'retires' an employee without a retirement policy and advance notice commits unfair termination and must pay damages.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent union in September 1991 as Area Secretary (Coast Region) on permanent and pensionable terms and earning Kshs 88,000 at retirement, was summoned to the Respondent's head office on January 31, 2022 and told his retirement would take effect on February 1, 2022. He sued for a declaration that his retirement and termination were unlawful, notice pay, compensation, exemplary damages, a Certificate of Service and costs. The Respondent, contending he had attained the retirement age of sixty years (being then sixty-seven), filed a response with a witness statement and documents but called no witness, proceeding only by written submissions. The court framed two issues: whether the retirement amounted to unfair termination, and entitlement to reliefs. Relying on the principle that unchallenged evidence stands where no witness testifies, the court found no policy on retirement age existed, retirement being by request, medical grounds or death, and no decision of the union's Central Council or delegates conference authorised the retirement. Informing the Claimant only a day before the retirement took effect made it an ambush and an unfair termination. The court awarded one month's notice pay (Kshs 88,000), four months' salary as compensation (Kshs 352,000) under sections 49 and 50 of the Employment Act, and service gratuity of Kshs 2,640,000 under the express contractual clause, forfeiture being limited to gross misconduct. Claims for salary arrears (already paid Kshs 250,000) and exemplary damages were dismissed. A Certificate of Service and costs were granted, awards subject to statutory deductions under section 49(2).

Key legal issues

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01

Whether retirement by ambush without a retirement policy amounted to unfair termination

Holding

Yes - the retirement was an ambush and an unfair termination

Reasoning

The Respondent led no evidence of a policy on retirement age; retirement occurred only on request, medical grounds or death. No decision of the union's Central Council or delegates conference authorised the retirement, and the Claimant was informed only a day before it took effect. The Respondent's unsworn witness statement and unproduced documents did not amount to evidence, leaving the Claimant's case unchallenged.

p. 4
02

Entitlement to notice pay, gratuity and compensation

Holding

Notice pay of one month, four months' salary as compensation and service gratuity awarded; salary arrears and exemplary damages dismissed

Reasoning

The retirement took immediate effect with no payment in lieu of notice. The contract expressly provided gratuity at one month's pay per year of service, forfeitable only on dismissal for gross misconduct, which did not apply. Unfair termination entitled the Claimant to compensation under sections 49 and 50 of the Employment Act; four months' salary was deemed sufficient considering the ex-gratia payment received and length of prospective service.

p. 5

Legal principles established

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  • Where a respondent does not call any witness, the claimant's unchallenged evidence stands and is to be believed
  • Retirement without a retirement-age policy, without a decision by the competent union organs and without notice amounts to unfair termination
  • An employee whose contract expressly provides for service gratuity, retired without gross misconduct, is entitled to gratuity

Court orders

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  1. 1.Payment of one-month salary in lieu of notice at Kshs 88,000/-
  2. 2.Four months' salary as compensation for the unfair termination at Kshs 352,000/-
  3. 3.Service gratuity at Kshs 2,640,000/-
  4. 4.A Certificate of Service
  5. 5.Costs of the suit to the Claimant
  6. 6.Awards subject to statutory deductions in accordance with Section 49(2) of the Employment Act, 2007

Authorities

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Legislation

  • Employment ActSections 49, 50, 49(2)
  • Employment Act, 2007Section 49(2)

Cases cited (7)

  • Edward Muriga Through Stanley Muriga v Nathaniel D. Schulter
    Civil Appeal No 23 of 1997
  • Francis N. Gachuri v Energy Regulatory Commission
    Cause No 2023 of 2011
  • Bamburi Cement Ltd v William Kilonzi
    (2016) eKLR
  • Motex Knitwear Limited v Gopitex Knitwear Mills Limited
    Nairobi (Milimani) HCCC No 834 of 2002
  • Autar Singh Bahra and Another v Raju Govindji
    HCCC No 548 of 1998
  • John Karanja Mbogo v Leah Wangui t/a Gilgil Distributors Limited
    [2020] eKLR
  • Benjamin Langwen v National Environment Management Authority
    (2016) eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction (Employment Act; 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, "Ouko v Kenya Chemical Workers Union (Cause E014 of 2022) [2023] KEELRC 1877 (KLR)", Case Analysis (2023). Cause No E014 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1877/eng@2023-07-27

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