Kenafric Industries Limited v John Gitonga Njeru [2016] KECA 67 (KLR)

Initially appeals from the Employment and Labour Relations Court were limited to questions of law under Sections 12 and 27 of the Industrial Court Act and the Labour Institutions Act. Those provisions were repealed in their entirety by the Statute Law (Miscellaneous Amendments) Act No 18 of 2014, with the result that the jurisdictional limitation fell away and the Court may re-evaluate both fact and law.

Under Sections 43 and 45(2) of the Employment Act, the employer must prove a valid and fair reason and fair procedure where termination is contested. The appellant led no evidence of the restructuring or of unsatisfactory performance, and advanced inconsistent reasons (restructuring, dissatisfaction with working style, and voluntary resignation). The trial judge was therefore right to deem the termination unfair.

Section 43 mandates proof of valid reasons where termination is contested, and Section 41 requires communication of reasons and a hearing even for misconduct. The appellant failed to comply with these provisions and could not rely on a contractual clause allowing termination without reasons, since the service agreement is subject to the Employment Act, in particular Section 35(4).

Redundancy under Section 2 involves loss of employment by involuntary means through no fault of the employee, at the initiative of the employer, where services are superfluous. All these elements were present: the loss of employment was involuntary, at the appellant's instance, and involved abolition of the respondent's position pursuant to the alleged reorganization. The employer's failure to declare it a redundancy did not alter the substance.

Section 40(1) prescribes conditions including notification of the union or the employee and the labour officer, due regard to seniority and skill in selection, payment of leave, notice or wages in lieu, and severance pay of not less than fifteen days' pay per completed year of service. Adherence is mandatory, not left to the employer's whims, and the appellant adduced no evidence of compliance with any condition other than payment in lieu of notice.

An appellate court will not disturb a damages award unless it is so inordinately high or low as to represent an entirely erroneous estimate, or the judge proceeded on wrong principles or misapprehended the evidence materially (Butt v Khan). None of these grounds was established. Section 49 of the Employment Act donates to the Employment and Labour Relations Court the mandate to award up to twelve months' gross salary as damages.