Court awards man Sh500,000 for unfair dismissal

The Employment and Labour Relations Court at Kisumu, has awarded an employee of Rianyamwamu Tea Factory Sh500,000 over unfair dismissal.

The court ruled that the employee was unfairly kicked out of his job on the claim that his employer was cutting costs.

In delivering the judgment, Justice Stephen Radido, emphasized the necessity for employers to substantiate claims of termination with concrete evidence saying the tea factory, among many reasons, failed to alert the labour office about the intended redundancy.

Denis Maranga Ongeri, moved to court over unfair termination of employment, a claim which the Judge found to be substantiated.

“It is clear that the Rianyamwamu Tea Factory was releasing Ongeri for operational reasons. It was a declaration of redundancy and failed to give him the 30 days notice. Instead, it asserts that because it paid him the equivalent of 2 months’ salary in lieu of notice, it complied with the requirement on notice,” said Justice Radido.

“Apart from pleading and making the assertion, Rianyamwamu Tea Factory did not place before the court any records or material to support the contention of unsustainable high wage costs. The Court finds that it did not prove the valid and fair reasons for terminating Ongeri's employment.”

As a result of these findings, the court ruled in favour of Ongeri, awarding him Sh531,750 compensation. This decision included considerations for salary in lieu of notice, gratuity, severance pay, and other terminal dues.

Additionally, the court ordered that the awarded sum attract interest at court rates if not paid within 30 days.

The court at the same time dismissed Ongeri's application for Sh1 million service pay saying he was not qualified.

“Ongeri claimed Sh1,063,500 as service pay. The evidence placed before the court indicates that the claimant was a member and contributor to a Provident Fund as well as the National Social Security Fund. By dint of section 35(5) and (6) of the Employment Act, 2007, the claimant is not eligible for the payment of service pay,” said Justice Radido.

The core issue at hand was the termination of Ongeri's employment by Rianyamwamu Tea Factory Ltd.

The company had cited "unsustainable high labour costs" as the reason for Ongeri's dismissal, framing it as part of a staff rationalisation process. 

The factory said it paid its former employee gratuity of Sh779,252 and severance pay of Sh649,377 as a sign of good faith when they parted ways.

Ongeri, a manager at the firm said he was declared redundant on October 14, 2022, through a letter that claimed he would be relinquished of his duties from October 31, 2022 due to unsustainable high labour costs.

He argued that his employer breached Sections 43 and 45 of the Employment Act, 2007 imposed a burden on the employer to prove valid and fair reasons for terminating an employment contract.

Ongeri argued that the high wage cost reason given by his employer for terminating his employment was unsustainable.