[2024] KEELRC 567 (KLR)

Ngaira & 126 others v Sendwave Limited (ZEPZ) (Cause E532 of 2023) [2024] KEELRC 567 (KLR) (14 March 2024) (Judgment)

Neutral citation: [2024] KEELRC 567 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E532 of 2023

L Ndolo, J

March 14, 2024

Between

Abraham Leon Ngaira

1st Claimant

Irene Dimmo

2nd Claimant

Belinda Olisa Masheti

3rd Claimant

Dorah Kichunju

4th Claimant

Bertha Musazi

5th Claimant

Rebbeca Karanja

6th Claimant

Daisy Achieng Mboya

7th Claimant

Anne Oluoch

8th Claimant

Caroline Moraa Mauti George

9th Claimant

Irene Zale

10th Claimant

Betty Wairimu Maina

11th Claimant

Trizer Taaka

12th Claimant

Maureen Obure

13th Claimant

Fridah Mugambi

14th Claimant

Fiona Muthoni

15th Claimant

Gerald Were Diffu

16th Claimant

Stephen Ochieng Odhiambo

17th Claimant

Deborah Mutheu Mutunga

18th Claimant

Esther Githae

19th Claimant

Rachael Oluoch

20th Claimant

Bianca Nyambura

21st Claimant

Pheney Mwimwa

22nd Claimant

Michelle Owili

23rd Claimant

Stellah Wanjohi

24th Claimant

Donella Langat

25th Claimant

Joyce Wambui Njubi

26th Claimant

David Chweya

27th Claimant

Moreen Chilo

28th Claimant

Brenda Anyango Midamba

29th Claimant

Purity Ngetich

30th Claimant

Josephine Omondi

31st Claimant

Ian Mwangi Duncan

32nd Claimant

Faith Chelangat

33rd Claimant

Esther Gathoni Maina

34th Claimant

Bancy Nyakio Njiru

35th Claimant

Yvonne Ochieng

36th Claimant

Eva Makena Mutea

37th Claimant

Joyce Musau

38th Claimant

Selestine Akelo

39th Claimant

Josephine Flora Atieno Okeno

40th Claimant

Lucy Wambui

41st Claimant

Felicity Nduta Kamwanga

42nd Claimant

Winnie Wanjiku Wachira

43rd Claimant

Jannat Juma

44th Claimant

Joseck Momanyi

45th Claimant

Caren Shanice Gumba

46th Claimant

Rhoda Mukolwe

47th Claimant

Stephen Kariuki

48th Claimant

Coreen Namwanzo Gonzo

49th Claimant

Geraldine Koki

50th Claimant

Grace Wariara Muhoya

51st Claimant

Kebaso Maragia

52nd Claimant

Irene Ekirapa

53rd Claimant

Kelvin Muthoka

54th Claimant

Ishmael Mwai

55th Claimant

Francis Mbithi

56th Claimant

Irene Awuor Otula

57th Claimant

Sharon Aluvisa

58th Claimant

Caroline Wambui Njoroge

59th Claimant

Joyce Mbugua

60th Claimant

David Kuria Mwangi

61st Claimant

Flaviane Muturi

62nd Claimant

Jemimah Muroki

63rd Claimant

Johnstone Muthee

64th Claimant

James Obingo

65th Claimant

Caroline Nyokabi Kariuki

66th Claimant

Mercy Alusa

67th Claimant

Janeffa Maremba Mwakale

68th Claimant

Damaris Oluoch

69th Claimant

Hellen Malago

70th Claimant

Everlyne Akoth Otieno

71st Claimant

Saida Yusuf

72nd Claimant

Lucy Mobagi

73rd Claimant

Leonida Ngetich

74th Claimant

Joseph Gichuhi

75th Claimant

Sally Koross

76th Claimant

Naseem Mukanda

77th Claimant

Peris Luta

78th Claimant

Gladys Cherotich Ronoh

79th Claimant

Diana Ireri

80th Claimant

Bilha Muthoni Mbaire

81st Claimant

Andre Etabale Wetindi

82nd Claimant

Moses Kibet

83rd Claimant

Elizabeth Odhiambo

84th Claimant

Jerry Otieno

85th Claimant

Ann Muthengi

86th Claimant

Diana Kerubo Orwaru

87th Claimant

Mercy Oloo

88th Claimant

Ruth Mita

89th Claimant

Jacklyne Muthee

90th Claimant

Mark Khaemba

91st Claimant

Samantha Kimani

92nd Claimant

Sharon Onono

93rd Claimant

Simon Kimani Chege

94th Claimant

Nicholas Muthoni

95th Claimant

Stellah Wamaitha

96th Claimant

Irene Muiyuro

97th Claimant

Lydia Danda

98th Claimant

Lucy Kalungu

99th Claimant

Grace Muiruri

100th Claimant

Mercy Chege Wambui

101st Claimant

Ralph Mshenga

102nd Claimant

Veronica Okoth

103rd Claimant

Catherine Karanja

104th Claimant

Mary-Edna Achieng Oballa

105th Claimant

Annastacia Ndunge Nzuki

106th Claimant

Faith Ngala

107th Claimant

Yvonne Kiragu

108th Claimant

Elizabeth Saxton

109th Claimant

Lilian Otieno

110th Claimant

Christine Nyibori Aruka

111th Claimant

Rosemary Chege

112th Claimant

Sheila Saidimu

113th Claimant

Antony Buyeka

114th Claimant

Grace Omari

115th Claimant

Miriam Nyambura Muriithi

116th Claimant

Rita Odundo

117th Claimant

Grace Wanjiku Kagwe

118th Claimant

Nzakwa Venessa

119th Claimant

Calvince Onyango

120th Claimant

Millicent Kilonzo

121st Claimant

Joseph Mutui

122nd Claimant

Derrick Munene

123rd Claimant

Sylvia Wanjiku Waweru

124th Claimant

Hillary Rotich

125th Claimant

Winnie Njeri Njoroge

126th Claimant

Kevin Wachira

127th Claimant

and

Sendwave Limited (ZEPZ)

Respondent

Judgment

1. On 7th July 2023, the Claimants filed a Memorandum of Claim dated 6th July 2023, alleging unlawful and unfair termination of employment by way of redundancy. Alongside the claim, the Claimants filed a Notice of Motion under Certificate of Urgency, which was later withdrawn to pave way for disposal of the main claim.

2. The Respondent filed a Response dated 22nd September 2023, to which the Claimants responded on 24th October 2023.

3. By consent of the parties, the claim was urged by way of pleadings, supporting documents and final submissions.

The Claimants’ Case 4. The Claimants state that they were employed by the Respondent on diverse dates between 2021 and 2022. They add that they were employed in various positions within a remote working arrangement where they would work from home.

5. The Claimants aver that after working for a few months, they learnt that the Respondent Company had been acquired by another company known as WorldRemit.

6. The Claimants further aver that they were invited to town hall meetings by the Respondent’s senior officials, where they were assured that there was nothing to worry about, as the Respondent was simply undertaking a restructuring process to integrate the new company.

7. The Claimants claim that subsequently, 95% of the Respondent’s managers and many Kenyan employees were dismissed from employment.

8. They further claim that after the merger between Sendwave and WorlRemit to create ZEPZ, the work environment became hostile and eventually, the Respondent announced a redundancy.

9. On 16th May 2023, the Respondent called for a town hall meeting, after which the Claimants were locked out of the work portal and email access. On 17th May 2023, the Claimants received a letter addressed to the Ministry of Labour under reference ‘Notification of end of Employment by reason of Redundancy’. On 19th June 2023, the Claimants received letters via DocuSign under reference ‘Confirmation of End of Employment by reason of Redundancy’.

10. The Claimants accuse the Respondent of targeting the Kenyan team on account of stringent labour laws and an informed workforce. They state that the Respondent did not involve them in the redundancy process. They claim that after the termination of their employment, the Respondent conducted massive recruitment.

11. The Claimants’ case is that there was no genuine case of redundancy and that the Respondent mismanaged the process to the Claimants’ detriment. They assert that the entire process of redundancy was marred with lack of procedural fairness and consultation, high handedness, discrimination and unfair labour practices. They point out that the tabulation of their terminal dues was erroneous.

12. The Claimants further fault the Respondent for failing to pay them house allowance contrary to the provisions of Section 31(1) of the Employment Act.

13. The Claimants seek the following reliefs:a.A declaration that the decision to terminate the Claimants’ employment on account of redundancy was unlawful and unfair;b.A declaration that the decision to terminate the employment of the 20th, 30th, 31st, 34th, 39th, 50th, 74th, 79th, 88th, 116th, 117th and 119th Claimants, while they were lawfully on maternity leave was wrongful, unfair and discriminatory;c.House allowance for 7 months (December 2022 to June 2023);d.3 months’ pay in lieu of notice;e.12 months’ salary in compensation for unfair redundancy;f.Severance pay @ 15 days’ pay for each completed year of service;g.Bonuses equivalent to 12 months’ salary;h.Kshs. 5,000,000 each for the 20th, 30th, 31st, 34th, 39th, 50th, 74th, 79th, 88th, 116th, 117th and 119th Claimants as compensation for termination of employment on the ground of pregnancy;i.Kshs. 5,000,000 to each Claimant terminated while on paternity leave as compensation for discrimination;j.Payment for any outstanding leave days and holiday allowance.

The Respondent’s Case 14. In its Response dated 22nd September 2023, the Respondent states that it offers front-end and back-end office support to the broader Sendwave Company, which provides an international money transfer service for remittance of money from the United States of America and Europe to Africa, Asia and the Americas.

15. The Respondent admits having employed the Claimants in various capacities on diverse dates in the years 2021 and 2022. The Respondent further admits that an integration took place between Sendwave and WorldRemit in 2022 and into 2023. The Respondent states that the acquisition of Sendwave by WorldRemit was completed on 12th February 2021.

16. The Respondent denies the Claimants’ allegation that their terms and conditions of employment were downgraded and points out that the Claimants did not raise any such complaint prior to the subject redundancy.

17. Regarding the redundancy, the Respondent states that it was forced to relook its business operation and to conduct a rigorous restructuring process and was forced to declare some positions redundant. The Respondent states that the restructuring was meant to increase efficiency in line with market changes and to optimise the use of technology.

18. According to the Respondent, the optimisation of the use technology meant that certain positions, such as the customer care representative position was taken up by technology through automation and software.

19. The Respondent adds that the restructuring was also meant to increase its efficiency in line with market changes. This, the Respondent states, forced reallocation, redirection and refocus of workforce in other jurisdictions, hence the recruitment in other jurisdictions alluded to by the Claimants.

20. The Respondent claims to have employed a fair selection process for the redundancy. The Respondent adds that the Claimants were duly notified on the impending redundancy both orally and through written communication. In this regard, the Respondent states that it issued three notices, with the first two resulting in consultation on various issues, including outstanding house allowances, which were fully paid.

21. The Respondent avers that each Claimant was paid the following:a.Pending house allowance until 19th June 2023;b.Severance pay;c.Vested restructured share units;d.One month’s salary in lieu of notice; ande.Outstanding accrued holidays until termination.

Findings and Determination 22. From the evidence on record, the Claimants left the Respondent’s employment on account of redundancy.

23. Section 2 of the Employment Act and the corresponding Section in the Labour Relations Act define redundancy as:“the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment.”

24. While the law recognises redundancy as a legitimate mode of termination of employment, Section 40 of the Employment Act sets the following mandatory conditions to be met by every employer declaring redundancy:(a)where the employee is a member of a trade union, the employer notifies the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy;(b)where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer;(c)the employer has, in the selection of employees to be declared redundant had due regard to seniority in time and the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy;(d)where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union;(e)the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash;(f)the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice; and(g)the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days pay for each completed year of service.

25. The first 2 conditions under Section 40 require every employer declaring redundancy to issue a one-month notice of intention to the affected employee, their union (where applicable) and the local Labour Officer. By definition, this notice, should set out the reasons for and the extent of the intended redundancy.

26. It is now settled in case law that the redundancy notice under (a) and (b) above is separate and distinct from the termination notice provided under (f), which may be paid off in cash.

27. In Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLR the Court of Appeal stated as follows:“It is quite clear to us that sections 40 (a) and 40 (b) provide for two different kinds of redundancy notifications depending on whether the employee is or is not a member of a trade union. Where the employee is a member of a union, the notification is to the union and the local labour officer at least one month before the effective redundancy date. Where the employee is not a member of the union, the notification must be in writing and to the employee and the local labour officer. Section 40 (b) does not stipulate the notice period as is the case in 40 (a), but in our view, a purposive reading and interpretation of the statute would mean the same notice period is required in both situations. We do not see any rational reason why the employee who is not a member of a union should be entitled to a shorter notice.”

28. In the subsequent decision in Kenya Airways Limited v Aviation & Allied Workers Union of Kenya & 3 others [2014] eKLR Maraga JA (as he then was) stated thus:“The notices under this provision are not merely for information. The purpose of the notice under Section 40(1) (a) and (b) of the Employment Act, as is also provided for in….ILO Convention No. 158-Termination of Employment Convention, 1982, is to give the parties an opportunity to consider ‘measures to be taken to avert or to minimize the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.’ The consultations are therefore meant to cause the parties to discuss and negotiate a way out of the intended redundancy, if possible, or the best way of implementing it if it is unavoidable.”

29. In the more recent decision in The German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated )) [2023] KECA 894 (24 July 2023) (Judgment) the Court of Appeal held that the requirement for consultation is implied in Section 40 of the Employment Act and stated that:“In essence, consultation is an essential part of the redundancy process and ensures that there is substantive fairness. The employer should ensure that it carries out the process as fair as possible and that all mitigating factors are taken into consideration.”

30. In their written submissions dated 11th December 2023, the Claimants referred to the decision in Bernard Misawo Obora v Coca Cola Juices Kenya Limited [2015] eKLR where it was held that the notices under Section 40 of the Employment Act are not to be issued mechanically for the sake of ticking the boxes.

31. According to the Respondent’s own narration of the events leading to the termination of the Claimants’ employment, a town hall meeting was held on 16th May 2023 after which redundancy notices were dispatched to the Claimants and the respective Labour Officers. Termination notices were subsequently issued on 19th June 2023.

32. There was however no evidence of any consultations held with the affected employees. More significantly, the Claimants stated that after the town hall meeting of 16th May 2023, they were locked out of the work portal and email access. The only inference to draw from the Respondent’s action in this regard is that by the time the town hall meeting was being convened, the Claimants had already been selected for redundancy and there was no room for mitigation.

33. I therefore find and hold that the communication to the Claimants regarding the impending redundancy did not qualify as a redundancy notice as defined in law.

34. Regarding the condition on selection criteria as required under Section 40(1)(c) of the Employment Act, the Respondent states that the subject redundancy affected the entire class of employees. This being a mass redundancy, the Court found no reason to fault the Respondent on this score.

35. There is evidence that the Claimants were paid their terminal dues and the claim for underpayment under this head was not proved.

36. Similarly, the claim for discrimination against some of the Claimants was not proved.

37. Ultimately, the only finding I make in favour of the Claimants is that they were not issued with a proper redundancy notice and for this reason, I award each Claimant the equivalent of one (1) month’s salary in compensation. The amount payable to each Claimant will be tabulated jointly by Counsel for the parties and paid to the Claimants within the next thirty (30) days from the date of this judgment.

38. The Claimants will have the costs of the case.

39. Orders accordingly.

DELIVERED VIRTUALLY AT NAIROBI THIS 14TH DAY OF MARCH 2024LINNET NDOLOJUDGEAppearanceMr. Wangila for the ClaimantsMr. Wesonga for the Respondent