[2023] KEELRC 2661 (KLR)

Gachengo v Solenta Aviation Kenya Limited (Cause 379 of 2017) [2023] KEELRC 2661 (KLR) (30 October 2023) (Judgment)

Neutral citation: [2023] KEELRC 2661 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause 379 of 2017

B Ongaya, J

October 30, 2023

Between

Stephen Gachengo

Claimant

and

Solenta Aviation Kenya Limited

Respondent

Judgment

1. The claimant filed the memorandum of claim on February 22, 2017 through M/s Sharpley Barret & Company Advocates. The claimant alleged unlawful and unfair termination of the contract of service by the respondent. The claimant pleaded as follows. On January 15, 2007 the respondent employed him as a pilot. There was no letter of employment but by the letter dated January 15, 2007, the respondent confirmed the employment relationship. On June 28, 2007 the parties signed the exhibited first service agreement and the claimant was to be paid Kshs.272, 000. 00 as a pilot. The second service agreement was dated October 19, 2009 the net pay being USD 4,000 plus other stated benefits. The claimant worked until May 31, 2016 when as he alleges, was terminated un-procedurally and unfairly by the respondent. The claimant alleges as follows:a.On 07. 05. 2016 the respondent’s operations manager convened a meeting with the respondent’s pilots. The operations manager informed the pilots that- the respondent would retrench the pilots on account that the respondent’s contract with Astral Aviation Limited for facilitation of DHL flights had been terminated. Further that the respondent was shifting its planes from operating under the Aircraft Operating Certificate (AOC) of Astral Aviation Limited to AOC of Airworks Kenya Limited. The operations manager asked the pilots to opt for early retirement or to continue as respondent’s members of staff.b.The claimant opted to continue as respondent’s member of staff.c.On May 15, 2016 the operations manager communicated the flight schedule for the rest of the month.d.On 16. 05. 2016 the claimant wrote to operations manager about the respondent’s obligation to issue a termination notice.e.By an email dated May 17, 2016 the managing director Paul Hurst wrote stating there would be a retrenchment exercise due to contract closure and Kenyan law on retrenchment would be complied with including on issuance of notice. The claimant’s case is that section 40 of the Employment Act applied.f.The respondent breached section 40 of the Act because notice to the claimant and the area labour officer was not issued as prescribed; the criteria for selection for retrenchment was not given; leave entitlement for 2016 was not paid; and, statutory benefits were not paid prior to termination.g.In particular the claimant was notified by a letter dated May 31, 2016 delivered by email and the termination took effect the same May 31, 2016. The claimant had worked for almost 10 years and was the most senior pilot. He was paid severance pay per rates under section 40 of the Act but leave entitlement for 2016 being 28 days at USD 5,076. 4 was not paid at all.h.The respondent’s contract was facilitation of DHL flights and transfer of planes from AOC to another AOC had no effect on operations of DHL flights. There was no evidence of cancellation of the contract to facilitate DHL flights but merely a transfer of planes from one AOC to another AOC so that DHL planes continued to operate in Kenya piloted by pilots from Airworks Kenya Limited. Thus on May 12, 2016 the claimant had received an offer letter of employment from Airworks Kenya Limited to serve in the same capacity as he was serving with the respondent. Thus, the respondent was shifting partnership from Astral Aviation Limited to Airworks Kenya Limited which was a group company. If he accepted the offer from Airworks Kenya Limited he would have continued to fly the DHL flights but would have lost all his benefits of service with the respondent.i.The claimant pleads that there was no de facto redundancy and the termination was unfair in procedure and substance.

2. The claimant prayed for judgment against the respondent for:a.A declaration the termination was unfair and unlawful.b.Award of USD 5,076. 4 for accrued 28 leave days.c.12 months’ gross salary compensation for unlawful and unfair termination.d.A declaration he was employed by the respondent from January 15, 2007 to May 31, 2016. e.Delivery of certificate of service for the period served.f.Costs of the suit.g.Interest on b, c, and f above.

3. The respondent filed on May 11, 2017 the memorandum of response through Mwaniki Gachoka & Company Advocates. The advocates subsequently obtained leave to cease acting. The respondent pleaded as follows:a.Between January 2007 and end of June 2007 the claimant was a freelance pilot engaged by the respondent on ad hoc basis.b.The initial contract of service dated June 28, 2007 was terminated on February 1, 2009 to pave way for a new contract of even date.c.The contract between the respondent and Astral Aviation (K) Limited upon which the claimant’s employment was predicated was terminated. The claimant was informed that the respondent had requested a friendly company known as Airworks Kenya Limited to consider employing the claimant and other affected employees. The claimant initially welcomed the idea but later changed his mind.d.The redundancy was discussed with employees and relevant notices issued.e.The claimant was paid salary for June, July and August 2016 per terms of the contract together with service payment at 15 days per year served and accrued leave. The claimant received a total of Kshs.5, 106, 020. 00. f.Once the respondent’s contract with Astral Aviation was terminated, there was no way the respondent would have continued to employ the claimant. On 07. 05. 2016 all employees had been informed about the termination of the contract with Astral Aviation Limited.g.The suit is misconceived and be dismissed with costs as in bad faith and an afterthought.

4. The claimant testified to support his case. The respondent failed to attend the hearing despite service and further failed to call a witness. Final submissions were filed for the claimant. The Court has considered all the material on record and returns as follows.

5. To answer the 1st issue, the Court finds that parties were in a contract of service. There is no reason to doubt the respondent’s case that between January 2007 and end of June 2007 the claimant was a freelance pilot engaged by the respondent on ad hoc basis. Thus, the parties were in employment relationship for unbroken period from July 2007 to 31. 05. 2016.

6. To answer the 2nd issue, the evidence is that the employment contract was terminated by the letter dated 31. 05. 2007 due to contract closure from Astral Aviation Limited.

7. To answer the 3rd issue, the Court returns that the reason for redundancy was not unfair. It is that the contract between the respondent and Astral Aviation Limited ended. Even if it was at instance of the respondent as per the claimant’s pleadings, testimony and letter of closure on record, it remains that there was closure, undoubtedly so. The effect of the closure appears to be in such that the respondent could not continue employing the claimant and other affected employees or pilots. The reason for redundancy is found genuine per section 43 of the Employment Act, 2007.

8. To answer the 4th issue, the Court returns that the procedure leading to the redundancy was unfair to the extent that the month notice to the claimant and area labour officer were insufficient. The notice of termination to the claimant was dated May 31, 2015 and the redundancy took effect the same date. The notice to the labour officer per the claimant’s testimony May 10, 2016 and received on 30. 05. 2016 to take effect on May 31, 2016. The redundancy was unfair to that extent and the submissions made for the claimant are upheld in that respect. While making that finding, the material on record shows that all pilots in the respondent’s service were rendered redundant and thus, the issue of selection criteria pleaded and urged for the claimant does not even begin to emerge.

9. The 5th issue is on remedies. The Court finds as follows. The claimant is entitled to the declaration that the redundancy was procedurally unfair. The claimant is also entitled to delivery of a certificate of service per section 51 of the Act for the period served from July 2007 to 31. 05. 2016. By order at the hearing the documents filed for parties were allowed as admitted. The August 2016 payslip shows that 19 accrued leave days were paid. The claimant has not shown how he arrived at the 28 leave days in 2016, the agreed annual leave days being 28 days. The Court finds that on a balance of probability, the claimant was paid the due leave days and is not entitled to the claim as made. In any event the claim is wanting in particulars in pleadings on leave days and then strict prove as is trite law for special damages. It will be declined accordingly. Turning to compensation claimed at 12 months for unfair termination, the Court considers the factors in section 49 of the Act as follows. The Court has considered the money already paid to the claimant. Clause 2. 2 of the prevailing contract provided for 3 months’ termination notice which were paid by way of what the respondent has pleaded as salaries for June, July and August 2016 – and which the Court finds were indeed paid as there is no claim for the same by the respondent. The Court considers that the payment as agreed and effected was way above the one-month redundancy notice to the employee and the further pay in lieu of a month’s notice prescribed under section 40 of the Act. The Court has considered the parties’ conduct prior to the termination. The evidence is that parties engaged seriously including on alternatives to the redundancy. Of particular interest is the mutual position by the parties that the claimant was offered continued employment with Airworks (K) Limited dated 12. 05. 2016 but the claimant declined the offer. The start date was to be on 01. 06. 2016 on permanent employment as a Captain or Pilot. It therefore appears to the Court that the alternative offer for continued employment and the amounts already paid serve as a full mitigation in favour of the respondent and the claimant will not be awarded compensation under section 49 of the Act. It appears to the Court that the respondent had clear negotiations for the claimant’s continued employment but the claimant opted out at the last minute and invoked the unfair termination in breach of section 40 of the Act. Otherwise parties would have separated through mutual agreement and is not true that the claimant was not involved as submitted. For the respondent’s efforts in that regard and the consideration to comply with section 40 of the Act and the contractual provisions as far as was possible within the fast running time, each party will bear own costs.In conclusion, judgment is hereby entered for the parties with orders:a.The declaration that the termination was procedurally unfair for want of due notice to the claimant and the area labour officer per section 40 of the Act.b.The respondent to deliver the certificate of service by December 1, 2023 per section 51 of the Employment Act, 2007. c.Each party to bear own costs of the suit.

SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS MONDAY 30TH OCTOBER, 2023. BYRAM ONGAYAPRINCIPAL JUDGE