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On 31st March 2017, Justice Ndolo of the Employment and Labour Relations Court entered judgment in favour of an employee in a claim for various reliefs arising from an unlawful termination.

The case is that of Daniel Njuguna Mwangi v De La Rue Currency and Security Print Limited, Cause 532 of 2014.

 

The facts

The employee was employed in 1993 and he used to be paid overtime for time worked in excess of his normal working hours. In 2013, the company changed its policies, job groups and salary bands and from then on, the employee was no to longer receive monetary compensation for overtime but would instead be given time off. There is no evidence that the employer consulted the employer prior to effecting the changes as mandated in Section 10(5) of the Employment Act. The employee was dismissed for refusing to work overtime, which overtime he was not going to receive any monetary compensation.

 

The holding

The judge upheld the provisions on Section 10(5) and found that the unilateral changes to the contract were unlawful. The company should have consulted the employee before making the changes and the employee ought to have been issued with  a written notification of the changes. The termination which was based on the unlawful changes was, therefore, unfair and the employee was awarded damages.

In the final submissions filed on behalf of the Claimant, reference was made to Sections 10(5) and 13(1) of the Employment Act, 2007 which require the employer to first consult with the employee on any changes to the terms of employment and second, to notify the employee of those changes in writing.

The Respondent produced some power point presentation on the Salary Banding but there was no evidence of any consultations made with the Claimant, much less any notification of the changes to his terms of employment. That said I must find that the Respondent’s decision to discontinue payment of overtime compensation to the Claimant was not only unilateral but also unlawful.

Indeed as held by Radido J in James Ang’awa Atanda and 10 others v Judicial Service Commission [2017] eKLR unilateral variation of terms of employment by an employer is an unfair labour practice as contemplated under Article 41(1) of the Constitution of Kenya, 2010.

The logical conclusion is that since the instruction to work overtime without monetary compensation was itself unlawful, no charge based on it could stand. There was therefore no reason for the termination of the Claimant’s employment and the ensuing disciplinary process had no leg to stand on.

Read the full case here http://kenyalaw.org/caselaw/cases/view/133858/.

We tackled this topic extensively in a previous article which you should read https://kenyaemploymentlaw.com/2016/03/16/are-unilateral-changes-to-an-employment-contract-legal/.

 

Labour day (May 1st)

An increase in the minimum wage is expected (how else will you know that it’s an election year) and it’s already been hinted at.

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About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. Advocates. She has practiced employment law for 10 years. She is a repository junkie and a lover of editing.

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Comments

  1. Daniel says:

    Dear Anne;
    In this context what does “consultation” really constitute? Is it seeking approval from the employees or it is just informing them on the proposed changes?

    1. Anne Babu says:

      Informing someone of changes is certainly not consultation. Consultation must of necessity involve seeking comments even if not approval. If the changes are detrimental/fundamental, the consent of the employee must be obtained. See the previous article on this issue for more insight.

  2. grconsults says:

    Hi can you comment on the overtime issue which was also raised. Overtime pay compensated by time off, Is this ruling about both overtime pay and unilateral change to T&Cs? Is there any labour law employers and employees can refer to? Pt 21 of the case points to the unilateral change in the terms of employment for discontinuing payment of overtime compensation. And Pt 23 …is that since the instruction to work overtime without monetary compensation was itself unlawful, no charge based on it coud stand. The media in their reporting of the same case focuses on illegality of overtime without pay. “https://www.kenyans.co.ke/news/employment-and-labour-relations-court-judge-linnet-ndolo-rules-its-illegal-have-employees-work” overtime without pay.

    1. Anne Babu says:

      The media reporting was in my view wrong. The reason the termination was unlawful is because the change to no payment for overtime was made unilaterally. There is nothing wrong with giving time off in lieu – this practice has been endorsed by the Industrial Court. The issue here is that the change from monetary to time off was made unilaterally and it was to the employee’s detriment.

      1. Wilmer says:

        Ms. Anne, I am writing to you again. I have worked for an international company for 3 years 4 months to date. I was first posted to Uganda for 2.5 years and then transferred to Kenya last year. Same job, same position, same title. When I came to Kenya, the HR insisted I sign a new contract, even though my first contract made the allowance for me to be transferred for work if the company wished. In the new contract there was a clause for “end of service gratuity payments”. It disqualified me from receiving “gratuity” payments during the years in Uganda due to payments to NSSF. Now am in the process of facing possible redundancy. It seems my final day, if I am successful in making them respect my claim for First Notice of 30 days discussion period, then honoring the 2 month official notice once I get the official letter of termination—will be 20 days short of 1 year here in Kenya. So they have effectively denied me any severance payments for the entire 3.5 years.
        Is gratuity the same as severance?
        Does Kenyan law take precedence over international contracts?
        Does it make a difference that I was employed by the same company for the entire time, just reassigned to another regional office as was allowed in my contract?
        Did I make a costly mistake signing the new contract?
        I was very much pressured to sign and told that if I were to get the working visa in Kenya I would need to do so.
        Thanks in advance for your kind assistance.

        1. Anne Babu says:

          Gratuity and severance are totally different. Gratuity is only payable if it’s provided for in your contract. Unless you can show that you were pressured and misled into signing the new contract, you will not receive severance because it is due for years completed under the most recent contract.

          1. Daniel says:

            Dear Anne;
            Suppose a company buys majority stake in a different company and gets into an arrangement where the purchasing company continues to handle all centralised services for that new company like HR, procurement, finance and marketing using the same staff. Is there any illegality by using existing staff to work for the newly acquired company. Does this amount to changing terms of employment and is consultation or new contract needed?
            Thanks for your time

          2. Anne Babu says:

            The employees should be notified in writing of their new employer. If the new employer wishes to give new contracts, the new employer should not reduce on the current terms.

          3. Wilmer says:

            Again, thank you for your quick replay. Very helpful. I have learned a great deal as a result. I am determined to be much more assertive before I sign any future contracts as the clauses can truly impact an employee negatively when terminated. All the best.