ISL Kenya Limited v Owino (Employment and Labour Relations Appeal 4 of 2020) [2024] KEELRC 1448 (KLR)
The bottom line
#Kenya's Employment Court confirmed that paying an employee a lump sum does not excuse an employer from following redundancy or fair termination procedures.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Respondent's employment was fair
The termination, whether considered as a redundancy or a normal termination under section 35, did not comply with the Employment Act and was therefore unfair
The Appellant's financial difficulties meant the lay off amounted to redundancy under section 40, which requires personal written notice to the employee and the labour officer, one month's notice or pay in lieu, and severance pay. The Appellant only notified the labour office and placed notices in the compound, and the alleged meetings were not proved. Under section 43 the employer must prove the reasons for termination. Neither route under sections 40 or 35 was satisfied, so the termination was unfair.
Whether the payment of Kshs 10,000 in full and final settlement barred the claim
It did not; the statutory minimum entitlements exceeded what was paid and the trial award was in any event far less than the statutory entitlement
The court held that the Employment Act sets mandatory minimum conditions under section 26. The Respondent would have been entitled to pay in lieu of notice, severance pay, compensation and service pay, since the Appellant proved no NSSF or pension scheme contribution. The award made was thus far less than the statutory entitlement, so the full and final settlement could not validate the termination.
Whether the 12 months' compensation award was an improper exercise of discretion
No interference was warranted; the Respondent was entitled to at least what was awarded
Although the Respondent did not file a cross-appeal so the court would not re-tabulate higher entitlements, the court noted the award was far less than his statutory entitlements, meaning the magistrate's discretion was not improperly exercised and the appeal against quantum failed.
Legal principles established
#- A lay off of workers when the employer is unable to sustain their employment constitutes redundancy and must comply with the mandatory procedure in section 40 of the Employment Act
- A general notice placed in the compound does not satisfy the statutory requirement of personal written notification of redundancy
- The terms of the Employment Act are mandatory minimum standards that cannot be contracted out of by a discharge voucher or full and final settlement
- An employee who has worked beyond twenty-four hours at a time is not a casual employee
Court orders
#- 1.The appeal is dismissed
- 2.Costs of the appeal awarded to the Respondent
- On appeal from
- Magistrates' Court, Mavoko
- Mavoko MC ELRC Cause 15 of 2019
- Jurisdiction invoked
- First appellate jurisdiction over the magistrates' court in employment and labour relations matters
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "ISL Kenya Limited v Owino (Employment and Labour Relations Appeal 4 of 2020) [2024] KEELRC 1448 (KLR)", Case Analysis (2024). Appeal against Mavoko MC ELRC Cause 15 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1448/eng@2024-06-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.