Francis Kalamba Nzung'u v Pollman Tours & Safari Limited
The bottom line
#Kenya's Court of Appeal confirmed that even a justified redundancy is unlawful if the employer skips mandatory consultations and can't show how affected employees were selected.
What this practically means
#Executive summary
#Key legal issues
#Justification for the redundancy
Valid reasons existed: decline in business due to travel advisories and the Ebola threat was demonstrated by evidence including newspaper cuttings.
The respondent produced newspaper cuttings and testimony of a Kshs.52,298,404 loss in 2014 following travel advisories against non-essential travel to Kenya and Ebola fears. The Court found this adequately demonstrated the business downturn that necessitated restructuring and departmental mergers, so the substantive justification for declaring positions redundant was established.
Compliance with section 40 of the Employment Act
Proper one-month notice was issued, but the selection criteria under section 40(1)(c) were not adequately demonstrated and prior consultations were not conducted.
The Court found the appellant knew of the intended redundancy through emails of 9th and 15th October 2014 and the 1st December 2014 letter, so the one-month notice was valid. However, the employer failed to show how it applied the seniority, skill, ability and reliability criteria, and it was not demonstrated that consultations preceded the termination notice - the sole procedural defect.
Whether terminal dues were paid
Terminal dues of Kshs.1,513,859.45 were fully paid, including via a cheque issued to Commercial Bank of Africa to offset the appellant's loan.
A tabulation of final dues showed gratuity and pay in lieu of notice were paid. The appellant admitted having a loan; the Court reasoned that had payment not been made, the bank would have been demanding the outstanding loan amount, which was not the case. The appellant also conceded receiving his December 2014 salary.
Adequacy of 6 months' salary compensation
The award of 6 months' salary was adequate compensation for the failure to consult; the trial court's discretion would not be disturbed absent evidence justifying 12 months' pay.
Section 49 of the Employment Act provides a wide range of remedies and the award of compensation is discretionary. Following Mbogo v Shah, an appellate court will not interfere with such discretion unless it was exercised without regard to legal principles. The appellant led no sufficient evidence to justify the maximum 12 months' award, so the 6 months' salary award stood.
Alleged constitutional violations and discrimination
The constitutional claim failed for lack of particularity per Anarita Karimi Njeru, and the discrimination claim failed because the appellant was in a managerial, non-unionisable position.
Applying Anarita Karimi Njeru as affirmed in Mumo Matemu, constitutional breaches must be pleaded with specificity as to the provision and manner of infringement. The pleadings did not meet that threshold. The email of 3rd December 2014 showed salary increments were reserved for unionisable staff, indicating the appellant held a managerial grade, so there was no discrimination in barring him from union membership.
Legal principles established
#- Whether or not an employee is a member of a trade union, notice of intended redundancy of not less than one month must be given, since a purposive reading of section 40(1)(a) and (b) of the Employment Act requires the same notice period in both situations.
- A lawful redundancy must be both substantially justified and procedurally fair, and the employer must demonstrate application of the selection criteria in section 40(1)(c) and conduct prior consultations with affected employees.
- Consultations between employer and employees are mandatory before redundancy termination notices are issued and cannot be bypassed, even where the employer has valid reasons for the redundancy.
- Constitutional violations must be pleaded with reasonable precision, specifying the provision infringed and the manner of infringement.
Court orders
#- 1.Appeal dismissed
- 2.Each party to bear its own costs
- On appeal from
- Employment and Labour Relations Court
- Not stated in judgment
- Jurisdiction invoked
- First appellate jurisdiction over the ELRC (Court of Appeal Rules; the judgment invokes Rule 88(1) of the Court of Appeal Rules 2022)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Francis Kalamba Nzung'u v Pollman Tours & Safari Limited", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1665/eng@2024-11-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.