[2024] KEELRC 13227 (KLR)

Mesude v Viamo Inc Limited (Cause E671 of 2022) [2024] KEELRC 13227 (KLR) (27 November 2024) (Judgment)

Neutral citation: [2024] KEELRC 13227 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E671 of 2022

B Ongaya, J

November 27, 2024

Between

Ruth Mesude

Claimant

and

Viamo Inc Limited

Respondent

Judgment

1. The claimant filed the statement of claim dated 19. 09. 2022 through Kogai & Company Advocates. She prays for judgment against the respondent for:1. A declaration that the respondent unfairly and unlawfully terminated the claimant’s employment.2. 12 months’ salary for unlawful and unfair termination (745,059* 12)………………………………….Kshs. 8,940,059/=3. Unpaid house allowance (15%*714,685*12months)+ (15%*745,059*8months)………….Kshs. 2,180,504/=4. Unpaid service pay at the rate of one month salary for every year worked……………………………..Kshs. 745,059/=5. Unpaid acting allowance (Kshs. 250,000*12 months) ……………………………Kshs. 3,000,000/=6. Damages for violation of data privacy…...…..Kshs. 8,000,000/=Sub-total………………….Kshs. 22,865,622/=7. Cost of this suit.8. Interest on the above until payment in full.9. Such further or other relief the Honourable Court may deem fit.

2. The claimant pleaded that by the employment contract dated 12. 08. 2020, the respondent offered and she accepted employment on the same date as Recruitment Manager. According to the contract, she was entitled to, among other payments, a basic salary of Kshs. 714,685/= per month. Her salary had been reviewed as at the time of termination of her employment and she was earning a basic salary of Kshs. 745,059/= per month.

3. The claimant’s case was that on or about 13. 07. 2022, she had her weekly meeting with her supervisor, the Talent Director, to update him of the weekly tasks, as was the norm. She was however shocked when instead of discussing the weekly work, the Talent Director informed her that the respondent had decided that they no longer needed the claimant’s position because both her level of skill set and salary were very high. She was further informed that the respondent had decided to declare her position redundant and would later be issuing her a termination letter. The claimant, via email, then requested for a meeting since she did not agree with the decision to declare her position redundant and had not been provided with any reasons as to why the decision was taken.

4. The claimant further averred that on 14. 07. 2022, she held a meeting with the Talent Director and the Chief Human Resource Officer (CHRO), Lisa Butler. Unfortunately, she was only told that it was the executive team's decision to release her and that her last working day with the respondent would be on 15. 07. 2022, on which date the respondent would also send her the termination letter. The respondent however issued the termination letter to her on 18. 07. 2022 dated the same day, without any document to support its decision of releasing her because of its financial position that led to structural change. The claimant completed and signed the clearance exit form, as a pre-condition to being paid her terminal dues and was then paid her terminal dues on 01. 08. 2022, which included one-month salary in lieu of notice, severance pay, 2021 annual bonus, reimbursable expenses, outstanding leave days and salary worked up to 18. 07. 2022.

5. The claimant pleaded that the Recruitment Department had three (3) employees including the claimant, Patience Agada who joined the respondent on 26. 07. 2021 as a recruitment officer, and Wanjiku Mwangi who joined on 19. 02. 2022 as a senior recruiter. The claimant was the most senior amongst the three, had the most skills and ability and was the first one to join the respondent company. It was the claimant’s averment that the alleged redundancy was both procedurally and substantively unfair, and unlawful for the following reasons:i.The respondent did not notify the claimant of the reasons for, and the extent of, the intended redundancy.ii.The respondent did not notify the labour officer of the reasons for, and the extent of the intended redundancy. The letter to the labour officer dated 18. 07. 2022 and received on 19. 07. 2022 was sent after the claimant was terminated from employment.iii.The CEO only communicated about the redundancy on 21. 07. 2022 after the claimant was terminated from employment on 18. 07. 2022. iv.There was no evidence tendered to the claimant on alleged respondent's structural change to warrant her position being declared redundant.v.The respondent did not provide the claimant its organogram to show how her position was affected with the alleged redundancy.vi.There were no discussions and consultations on the proposed redundancy.vii.The reasons given by the respondent for declaring the claimant redundant are not valid and fair reasons for redundancy.viii.The respondent did not carry out any evaluation to determine which employee was most suitable to be declared redundant, the claimant was simply handpicked.ix.The respondent, in the selection of employee to be declared redundant, did not have due regard to seniority in time and to the skill, ability and reliability of the claimant.x.The decision to terminate the claimant’s employment was pre- determined.

6. Regarding the reliefs sought in her claim, the claimant averred as follows:a.Although she was hired as a recruitment manager, she was added additional roles not in her job description at no pay. She was particularly tasked to manage Patience Agada and Wanjiku Mwangi, with whom she held weekly one-on-one meetings, guided and trained them on their jobs, mentored and coached them, and did performance management on them. When she raised issue of not being paid acting allowance yet she managed a team, the respondent promised to pay her. On 12. 05. 2022, she held a meeting with the CHRO who informed her that she would be paid the acting allowance after acknowledging that the claimant had been added additional responsibilities not in her job description.b.The respondent contravened Article 41 of the Constitution of Kenya by subjecting her to unfair labour practices, and went against the principle of equal pay for equal work, or work of equal value. Consequently, she is entitled to and demands an acting allowance of Kshs. 250,000/= per month from August 2021. c.In addition, the respondent grossly violated her rights under Article 28 of the Constitution on human dignity, Article 31 on the right to privacy, Article 40 on the right to property, and the Data Protection Act. This is after the respondent’s Finance and Administration Officer shared the claimant’s monthly pay slip with the Kenya County Director, Regional Accountant and the Talent Director from January 2022 up to the time her employment was terminated. The respondent failed to act despite the claimant’s incessant demand for the action to be stopped and especially considering that the abovementioned three employees were not key actors in generation of payroll.d.The respondent’s action further subjected her to mental anguish contrary to Sections 25 and 30 of the Data Protection Act. Her consent was not sought before her sensitive data was shared and no reason given to her on why her data was being shared with third parties. The respondent knowingly violated her data privacy rights despite it being a GDPR (General Data Protection Regulation) compliant organization and she thus demands compensation.e.She is entitled to house allowance for the 18 months she was employed by the respondent as it neither paid her house allowance nor provided her with reasonable accommodation, contrary to Section 31 of the Employment Act.f.The respondent also failed to pay her service upon termination of her employment contract, contrary to Section 35(5) of the Employment Act. She is entitled to unpaid service pay because the respondent irregularly remitted her NSSF contributions.

7. The respondent filed the amended response to claim dated 17. 10. 2022 and through Uyala & Associates Advocates. It prays that the claimant’s suit be dismissed with costs and judgment entered for the respondent. The respondent’s case was as follows:i.The claimant, as a manager, was aware of the impending restructuring within the respondent company.ii.The restructuring had a net effect in the company’s entire operation and some positions had to consequently be declared redundant, a fact that was well within the claimant’s knowledge considering her interactions with the Talent Director.iii.It is not the business of the company to parade all its books of accounts to its employees to confirm a restructure, which in any event would demoralize the remaining employees.iv.The respondent informed all its staff in a meeting held on 25. 05. 2022 that the restructuring process would be majorly because of positions rather than employees and that the affected staff would only be those found to be surplus to the needs of the business.v.Despite the company having had a meeting with the claimant as per her request and wherein her position was discussed, it in the end had to make a decision, which according to the claimant was inconsistent with her demands to continue serving in the same capacity. That was, notwithstanding that, her office was not relevant at the time.vi.The decision to declare the claimant’s position redundant was largely a business decision that could not be changed. The company had scrapped some positions as a cost-effective measure. Furthermore, the claimant’s position was chosen because the said task could be well handled by other remaining staff considering the recruitment process had reduced drastically.vii.The claimant was subsequently issued with a termination letter after due process on the redundancy was followed. She then cleared with the company and all her outstanding dues paid to her including the notice in lieu of payment. The respondent does not therefore owe her.viii.The claimant is neither entitled to service pay nor acting allowance, as she was never in any acting capacity. She was a manager and the roles assigned to her office were well articulated in her contract of employment. In addition, her employment having accrued statutory deductions such as NSSF and NHIF disqualifies her from grant of service pay.ix.On violation of the claimant’s privacy as alleged, the respondent averred that:a.Employee pay slip is not a secret in the organization since its is always handled by several internal payroll masters and therefore has to be known by those in charge of the payroll.b.The claimant had severally complained of late payment of her salary, hence for ease of tracking her salary payment, it was incumbent upon the relevant people in charge of the payroll to ensure that her salary was not delayed. This therefore called for the entire payroll team to liaise and work together including sharing all the employees’ pay slips, which in any case is not a violation.

8. The parties tendered their respective testimonies before the Court and thereafter filed their respective submissions. The Court has considered all the material on record and returns as follows.

9. To answer the 1st issue, the Court returns that the parties are in mutual agreement that they were in a contract of service whose terms were as pleaded for the claimant.

10. To answer the 2nd issue, the contract of service was terminated by the memorandum dated 18. 07. 2022 on termination of employment by reason of redundancy. The reason stated was change of the respondent’s operational requirements due to respondent’s financial position making the position of Recruitment Manager held by the claimant unfortunately no longer needed. The letter stated that the claimant would be paid in lieu of notice the Kshs.745,059. 11 plus severance pay of Kshs. 558, 794. 33 for 22. 5 days over the 18 months she had served. Further payments included 2021 bonus Kshs.271, 389. 00; reimbursement expenses Kshs.12, 499. 00; pay for days worked Kshs. 447,035. 47, and untaken 5 leave days Kshs.171, 936. 72. The payment was effected by the July 2022 payroll cycle.

11. The 3rd issue is whether the termination by redundancy was unfair. The Court returns as follows:a.The reason for termination appears to have been the respondent’s case that the claimant’s salary was high and unsustainable. The claimant testified that at the meeting of 14. 07. 2022 she was informed as much. The respondent’s witness (RW) Alex Nnamonu being the Talent Director testified that the claimant was terminated on 18. 08. 2022 but she had stopped working on 14. 07. 2022. The termination letter was dated 18. 07. 2022 and the claimant was paid a month’s salary in lieu of notice. The labour officer was notified on 18. 07. 2022. further at that time 22 employees were terminated. The reason for the redundancies was that the respondent suffered financial difficulties. RW then testified, “Company suffered revenue losses. There were company losses. We needed to deal with that financial difficulty. I confirm business decision had been made that her salary was high and not sustainable. No filed documents on company financials. Financial matters are private. There were a series of cost cutting measures and the CEO communicated loss of revenue. Town Hall meeting was on 25. 05. 2022. One issue was financial issue and there were significant revenue pressures….” By that testimony the Court infers that 20 employees were affected and the Town Hall meeting had communicated the financial difficulties. While the financial statements showing the difficulties or the slowing revenues were not exhibited, the Court has considered the flow of events and RW’s testimony and on a balance of probability, it is established that the respondent suffered financial difficulties and that in the respondent’s opinion the claimant’s salary became unsustainable. The reason for termination is found valid as existing at termination as envisaged in section 43 of the Employment Act, 2007 and it was as well fair as it related the respondent’s operational requirements per section 45 of the Act. The Court holds that the employer is entitled to separate upon a restructuring for better economy including downsizing on account that the salary is unsustainable as was the case in the instant matter.b.As for procedure for termination, it is obvious that the respondent did not strictly comply with section 40 of the Act to serve the area labour officer and the claimant a month’s notice on the reasons for and the extent of the intended redundancy. The notice appears not to have been served at least a month prior to the effective date of the redundancy per section 40(1) (a). While the town hall meeting was held and the claimant attended a meeting on 14. 07. 2022 as had been requested for, there is no material evidence that the respondent accorded the claimant due consultations by way of considering alternatives to the redundancy such as pay cuts or even generally preparing the claimant to cope with the looming redundancy. Thus, the termination is found to have been unfair in procedure and the claimant’s case and submissions are upheld in that case.

12. To answer the 4th issue the Court finds that as urged for the respondent, sharing of the claimant’s pay statement or slip within the organization’s managers or relevant officers was necessary for efficient and effective respondent’s management. The Court finds that the claimant has failed to demonstrate breach of confidentiality of her personal data or the personal identification information in violation of the right to privacy or provisions of the Data Protection Act 2019 as was alleged. The allegations in that regard will collapse as unfounded.

13. The 5th issue is on remedies and the Court returns as follows:a.The claimant has claimed maximum 12 months’ salaries for the unfair termination. The Court has found that the reason was valid and fair but the procedure was unfair for want of genuine consultations and due preparation of the claimant for the redundancy. The Court has considered the factors in section 49 of the Act. As a mitigation, it is submitted that the claimant was given an option to serve for a month’s notice period but she declined. The offer appears not to have been in writing and the option appears not to have accrued at all in view of the mandatory one month notice prior to termination by redundancy per section 40(1) (a) of the Act. The Court has considered the terminal dues already paid to the claimant. The Court has considered that the claimant had served for only 18 months and severance payment was prorated accordingly. To balance justice for the parties, the claimant is awarded 3months’ salary x Kshs.745, 059. 11 = Kshs.2,235,177. 33 (payable less PAYE).b.The evidence is that the claimant says she coached, supervised, mentored and motivated the staff working under her and for that she claims acting allowance for extra duties. Obviously, the described duties she has mentioned do not show that she was appointed to act in a position other than the one she had substantially been appointed to serve. The claim appears to be misconceived. The claimant testified that on 12. 05. 2022 Lisa Butler , the Chief Human Resource Officer informed her that the she would be paid Kshs.250,000. 00 for the added responsibilities. The same appears not to have been reduced into writing. Instead of calling the said Lisa Buttler to testify, the claimant appears to shift that burden to the respondent by urging that her claims should succeed as the respondent failed to call Lisa Butler. In any event, the parol evidence rule militates against varying the written employment contract and upon claims of acting allowance which is inconsistent with alleged claim for extra duties. The employment agreement on duties and scope of employment at clause 1 stated in part, “….You will perform the duties and have the responsibilities and authority customarily performed and held by an employee in your position or otherwise may be assigned or delegated to you by your manager including but not limited to responsibilities outlined in your job description (attachment B).” The claimant was hired as a Recruitment Manager and it is the view of the Court that the alleged extra duties are duties and responsibilities of the management function – to supervise, train, coach, and mentor employees working under the Manager. The Court holds that unless there is an express contractual clause or by irresistible inference from the the nature of the contract of service, every contract of service carries an inherent implied term of service that the employee will share knowledge with colleagues at work. Thus, supervision, training, coaching, mentoring and exploration are all collegial attributes necessary of each worker and for organically enabling work relationships. The attachment b on job description also sated “support training of Viamo managers on recruitment and unconscious bias” and in that view, the alleged extra duties appear not to have been “extra duties.” The claim and prayer will collapse as unjustified and as per submissions for the respondent.c.The claimant was a member of NSSF and per section 35(6) of the Act, service payment or gratuity is not due or justified. The respondent’s submissions are upheld accordingly.d.The claimant is not entitled to the house allowance for 18 months of service as claimed. The agreed payment included a sufficient provision for rent element as envisaged in section 31 (1) of the Act and the respondent’s submissions are upheld. There appears no grievance in that respect throughout the service of 18 months and the Court finds the claim a belated afterthought. The employment agreement was express at clause 2(1) that the respondent would pay the claimant as compensation for her services a base monthly salary at a gross rate of Kshs. 714, 685. 00 (equivalent to 6, 500 USD, based on Oanda exchange rate of December 7, 2020. ) The Court returns that the claimant is bound accordingly.

14. The claimant has significantly succeeded and the respondent to pay costs of the suit.In conclusion, judgment is hereby entered for the claimant against the respondent for:1. The declaration that the termination by way of redundancy was procedurally unfair.2. The respondent to pay the claimant a sum of Kshs.2,235,177. 33 (less PAYE) by 31. 12. 2024 failing interest to run thereon at Court rates from the date of this judgment until full and final payment.3. The respondent to pay the claimant’s costs of the suit.

SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS WEDNESDAY 27THNOVEMBER 2024. BYRAM ONGAYA,PRINCIPAL JUDGE