Stephen Anekeya Mumanyi v Travel Associates Limited [2022] eKLR

Key Facts

Issues

• Whether the Respondent adhered to procedure under Section 40(1) of the Employment Act before terminating the services of the Claimant on account of redundancy.
• Whether the Respondent terminated the Claimant's employment on account of redundancy.
• Whether the Claimant is entitled to the reliefs sought, including payment of terminal benefits, notice pay, and damages for unlawful termination.

Holdings

• The Respondent's claims of indiscipline against the Claimant were dismissed. The court found no evidence these issues were raised during the termination process, contradicting the positive recommendation letter provided to the Claimant. The termination letter cited redundancy, not disciplinary action, and the Respondent failed to follow Section 41's disciplinary procedures.
• The court declared the termination of the Claimant's employment unlawful, finding the Respondent failed to comply with Section 40 of the Employment Act. There was no evidence of prior notice to the employee, labor officer, or union, no discussion to justify redundancy criteria, and no adherence to mandatory procedures such as providing one month's notice or severance pay. The court emphasized that the provisions of Section 40 are mandatory and require strict compliance.
• The court awarded the Claimant Kshs.448,370/=-, including one month's notice pay (Kshs.68,980/=-), service pay for 12 years (Kshs.379,390/=-), and costs with interest from the judgment date until full payment. Compensation for unlawful termination was not awarded as the Claimant was already compensated via service pay under Section 40.

Remedies

• 12 years' service pay at Kshs.68,980 x 5.5 years Kshs.379,390/=-.
• He is awarded one month salary in lieu of notice Kshs.68,980/= because the Respondent did not present evidence of having paid it, though claimed to have done so.
• Costs of the suit are awarded to the Claimant and interest at court rates from the date of Judgement till full payment.
• The court will not award him compensation for unlawful termination as he is well compensated with service pay provided in Section 40 of the Employment Act.

Monetary Damages

Legal Principles

• The termination was deemed procedurally unfair as the claimant was not heard or given an opportunity to respond to allegations of misconduct. The court noted this breach of natural justice, particularly since the employer's disciplinary claims were not raised during the redundancy process.
• The court held that the employer failed to adhere to the mandatory procedural requirements under Section 40 of the Employment Act for redundancy, including notifying the employee, Labour Officer, and providing severance pay. The decision reinforced the principle that redundancy procedures are not discretionary and must be conducted in good faith, as highlighted in cases like Gerrishom Mukhutsi Obayo v DSV Air and Sea Limited.
• The court found the employer's actions lacked good faith, as they cited redundancy without following due process and contradicted their own positive reference for the claimant. This aligns with judicial precedent requiring employers to act fairly when implementing redundancy measures.

Precedent Name

• Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
• JANE I. KHALECHI VS OXFORD UNIVERSITY PRESS E.A. LIMITED
• Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited

Cited Statute

Judge Name

Passage Text

• The letter of recommendation by the Respondent to the Claimant is very positive and presents him as honest and hard working person. It is dated 10th January, 2017.
• The court has no evidence to demonstrate that the Respondent complied with the provisions of Section 40 of the Employment Act.
• In conclusion there was no fair procedure followed in terminating the Claimant's employment as articulated in Section 40 of the Employment Act.