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Court of AppealPartially AllowedCivil Appeal No. 236 of 2015· [2017] KECA 381 (KLR)

Africa Nazarene University v David Mutevu & 103 others [2017] KECA 381 (KLR)

Court of Appeal of Kenya
28 July 2017
PWP. N. WakiRNR. N. NambuyeMartha Karambu KoomeM. K. Koome
3,334 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed employers only need one month's redundancy notice for non-unionised employees, overturning compensation awarded to over 100 former staff.

What this practically means

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Executive summary

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The sole issue in this appeal was the true construction of Section 40 of the Employment Act, 2007, specifically whether an employer declaring redundancy must issue two notices. The Employment and Labour Relations Court (Mbaru, J) had held that Section 40(1)(b) required a first general notice alerting employees to impending restructuring, and Section 40(1)(f) a second personal notice to affected employees, and awarded each of the 100 respondents three months' salary as compensation for an unfair labour practice, while finding the redundancy itself justified and the University largely compliant. The University appealed, relying on Thomas De La Rue, contending Section 40(1)(f) concerns payment in lieu of notice and that only one notice is required for non-unionised employees. The Court of Appeal, allowing the appeal, held that for non-unionised employees subsection (b) is the only notice provision, requiring written personal notice and notice to the labour officer at least one month before termination, with the reasons for and extent of the redundancy stated; subsection (f), though inelegantly drafted, is 'all about payment' of one month's notice or wages in lieu, and does not create a second notice. Section 40 says nothing about consultations, though fair labour practices remain a constitutional imperative under Article 41. Finding the University had complied with the statute and paid an extra month's salary ex gratia, the Court set aside the ELRC orders of 13 February 2014 and the decree of 15 September 2015, and, considering the respondents lost their employment for the University's benefit, ordered each party to bear its own costs here and below.

Key legal issues

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01

Whether Section 40 of the Employment Act, 2007 requires an employer declaring redundancy to issue two notices to affected employees

Holding

No. Section 40(1)(b) requires one notice to non-unionised employees (personally in writing and to the labour officer), while Section 40(1)(f) concerns payment in lieu of notice, not a second notice.

Reasoning

The Court held subsection (f) is inelegantly drafted but is 'all about payment'; if it were about a second notice it would have said so expressly. The trial court imported a second notice by reading a consultation purpose into the statute, but Section 40 says nothing about consultations, although fair labour practices remain a constitutional imperative under Article 41. For unionised and non-unionised employees alike, the notice must state the reasons for, and extent of, the intended redundancy not less than a month before termination.

p. 5
02

Whether the University's redundancy process amounted to an unfair labour practice

Holding

It did not; the University complied with the statutory requirements and even paid each employee an extra month's salary in addition to one month's notice.

Reasoning

The respondents were not unionised, so subsection (b) applied. The letter served on each respondent stated the reasons for and extent of the restructuring one month in advance, meetings were held and counseling provided before the notices issued. On that footing the finding of unfair labour practice, which rested solely on the omission of the supposed second notice, could not stand and the appeal had to be allowed.

p. 6

Legal principles established

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  • Under Section 40(1)(f) of the Employment Act, 2007, an employer who declares redundancy need not issue a second notice to the affected employee; that subsection concerns payment of one month's notice or one month's wages in lieu of notice. For non-unionised employees, the only notice required is the one under Section 40(1)(b).
  • Sections 40(1)(a) and 40(1)(b) provide for two different kinds of redundancy notifications depending on whether the employee is or is not a member of a trade union, and the same one-month notice period applies to both situations.

Court orders

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  1. 1.Appeal allowed on the ground that the trial court erred in the construction of Section 40 of the Employment Act
  2. 2.Orders given by the Employment and Labour Relations Court on 13th February, 2014 and the Decree issued on 15th September, 2015 set aside
  3. 3.Each party to bear its own costs in the Court of Appeal and in the court below
On appeal from
Employment and Labour Relations Court of Kenya at Nairobi
ELRC Cause No. 2286 of 2012
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules (Rule 29(1)(a) reappraisal duty); appeal from the Employment and Labour Relations Court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Africa Nazarene University v David Mutevu & 103 others [2017] KECA 381 (KLR)", Case Analysis (2017). Civil Appeal No. 236 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/381/eng@2017-07-28

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.