Ongeri v Rianyamwamu Tea Factory Ltd (Cause E045 of 2023) [2024] KEELRC 1095 (KLR)
The bottom line
#A Kenyan court ruled a tea factory's redundancy unfair because it skipped the required 30-day notice to the worker and Labour Officer.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the redundancy
The redundancy was procedurally tainted because the Respondent gave no 30-days' notice to the Claimant or Labour Officer, and payment in lieu of notice did not cure this.
Section 40(1) of the Employment Act requires an employer to give the employee and the Labour Officer at least 30 days' written notice of a redundancy. The Respondent released the Claimant on 14 days' notice for operational reasons and relied on having paid two months' salary in lieu of notice. The Court held payment in lieu did not satisfy the statutory notice requirement, and the Respondent produced no evidence that the Labour Office was alerted, tainting the process.
Substantive fairness of the termination
The Respondent failed to prove valid and fair reasons for the termination.
Sections 43 and 45 of the Employment Act place the burden on the employer to prove valid and fair reasons for termination. The Respondent asserted unsustainable high wage costs but, apart from pleading the assertion, placed no records or material before the Court to support it. The assertion therefore remained unproved and the termination was substantively unfair.
Compensation for unfair termination
Compensation equivalent to 6 months' gross wages (Kshs 531,750/-) was just, considering about 11 years of service.
The Claimant was employed from 2011 to 2022, about 11 years. Though terminal dues including severance pay were paid, the termination was unfair both substantively and procedurally. Weighing the length of service and payments already made, the Court considered 6 months' gross wages (gross salary Kshs 88,625/-) to be just compensation.
Eligibility for service pay
The Claimant was not eligible for service pay as he contributed to a Provident Fund and the NSSF.
Under section 35(5) and (6) of the Employment Act, 2007, service pay is not payable where the employee is a member of a provident fund, pension scheme or the NSSF. The evidence showed the Claimant was a contributor to both a Provident Fund and the NSSF, so the claim of Kshs 1,063,500/- failed as a matter of statute.
Legal principles established
#- Payment of salary in lieu of notice does not substitute the mandatory 30-days' written notice to the employee and the Labour Officer under section 40(1) of the Employment Act.
- An employer bears the burden of proving valid and fair reasons for termination under sections 43 and 45 of the Employment Act, 2007.
- An employee who was a member of and contributed to a Provident Fund and the NSSF is not eligible for service pay under section 35(5) and (6) of the Employment Act, 2007.
Court orders
#- 1.Declaration that the termination of the Claimant's employment was unfair
- 2.Award of compensation of Kshs 531,750/- (equivalent of 6 months' gross wages)
- 3.Interest at court rates from the date of judgment if not paid within 30 days
- 4.Dismissal of the other heads of claim
- 5.Claimant awarded costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over unfair termination of employment (Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ongeri v Rianyamwamu Tea Factory Ltd (Cause E045 of 2023) [2024] KEELRC 1095 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1095/eng@2024-05-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.