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ELRCPartially AllowedMemorandum of Claim dated 4th August 2016· [2024] KEELRC 2533 (KLR)

Ragira v Ombi Rubber Rollers Limited (Employment and Labour Relations Cause 1535 of 2016) [2024] KEELRC 2533 (KLR)

Employment and Labour Relations Court
18 October 2024
5,907 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan employer's guard was unfairly terminated because the company skipped the mandatory 30-day redundancy notice and couldn't prove genuine redundancy.

What this practically means

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Executive summary

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The Claimant, a Night Guard employed by the Respondent from about January 2009, was terminated by letter dated 25th January 2016 effective 1st February 2016, the Respondent alleging it was reorganizing and outsourcing security services. He sued for a declaration of unfair termination, terminal dues and compensatory damages totaling Kshs. 475,965.40. The Respondent maintained the separation was by notice, that he was paid notice pay and dues, and that he executed a clearance form discharging all claims. The court framed three issues: whether the termination was a redundancy, its fairness, and the reliefs. It held that the termination was on account of an alleged redundancy situation because the Claimant's services became superfluous, amounting to an abolition of office, and declined to follow James Ngotho Njenga v Ombi Rubber Rollers Ltd. However, the Respondent breached Section 40 of the Employment Act by failing to issue the mandatory 30-day notice to the Claimant and the labour officer, and failed to prove a genuine redundancy, producing no outsourcing agreement. The termination was thus procedurally and substantively unfair; alternatively it amounted to an unfair summary dismissal. The clearance form did not bar the claims as its contents were not explained to the Claimant. Awards were made for house allowance (15% for three years), salary underpayment of Kshs. 72,290.65 (limited to February 2013 to December 2014 for want of specificity thereafter), leave pay for three years, and five months' compensation under Section 49(1)(c). The claim for notice pay was refused as it was paid. Judgment was entered accordingly, with interest at court rates and costs to the Claimant.

Key legal issues

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01

Whether the termination was on account of redundancy

Holding

The court found the termination was on account of an alleged redundancy situation, since the services of the Claimant were superfluous and amounted to an abolition of office.

Reasoning

Applying the statutory definition of redundancy in Section 2 of the Employment Act and the Labour Relations Act, the court held that the loss of employment was involuntary, at the employer's initiative, and because the Claimant's services became superfluous when the security department was done away with in favour of an outsourced provider. This technically amounted to an abolition of office, distinguishing James Ngotho Njenga which had not considered the matter in the definitional context.

p. 5
02

Whether the termination was unfair and unlawful

Holding

The termination was procedurally unfair for breach of Section 40 (no 30-day notice to the employee or labour officer) and substantively unfair because the Respondent failed to prove a genuine redundancy (no outsourcing agreement or evidence of upgrading).

Reasoning

The only correspondence was a termination letter dated 25th January 2016, not the mandatory 30-day notice, and no notice was issued to the labour officer. The Respondent also failed to tender an outsourcing agreement or evidence of the alleged facility and organizational upgrading, and the alleged offer of employment by the outsourced enterprise was merely a suggestion. The court alternatively found the termination amounted to a procedurally and substantively unfair summary dismissal under Sections 41 and 44.

p. 7
03

Whether the clearance form barred the Claimant's claims

Holding

The clearance form did not bar the claims because its contents were not explained to the Claimant as required by Section 9(3) of the Employment Act.

Reasoning

Relying on Thomas De La Rue v Omutelema, the court held that a discharge voucher cannot preclude the court from enquiring into the fairness of a termination, and the employer bore the duty of showing the form was freely and willingly executed with the employee seized of all relevant knowledge. The Respondent failed to discharge this burden.

p. 10

Legal principles established

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  • Section 40(1)(a) and (b) of the Employment Act mandates a 30-day notice of intended redundancy to the employee and the labour officer before redundancy is declared.
  • A discharge/clearance form does not absolve an employer from statutory obligation where its contents were not explained to the employee; the employer bears the burden of showing it was freely and knowingly executed.
  • Where there is no written contract, section 10(7) of the Employment Act places the burden on the employer to prove that the salary was consolidated (inclusive of house allowance).

Court orders

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  1. 1.A declaration that the Respondent's action to terminate the Claimant's employment was unfair and unlawful
  2. 2.The Claimant be paid house allowance of Kshs. 56,138.40
  3. 3.The Claimant be paid salary underpayment of Kshs. 72,290.65
  4. 4.The Claimant be paid compensation for earned but unutilized leave days for 3 years of Kshs. 21,831.60
  5. 5.The Claimant be paid compensation for unfair termination of employment pursuant to Section 49[1][c] of the Employment Act of Kshs. 51,980.00
  6. 6.Interest on the above at Court rates from the date of judgment until payment in full
  7. 7.The Respondent shall bear the costs of this suit
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 and Labour Institutions Act (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, "Ragira v Ombi Rubber Rollers Limited (Employment and Labour Relations Cause 1535 of 2016) [2024] KEELRC 2533 (KLR)", Case Analysis (2024). Memorandum of Claim dated 4th August 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2533/eng@2024-10-18

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