Mathai v Keroche Breweries Limited (Civil Appeal 20 of 2020) [2024] KECA 1697 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a genuine business redundancy is lawful if properly communicated, even when an employee challenges it as unfair termination.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.How much leave pay was the appellant entitled to?
- 2.Was the appellant's termination unfair and calling for compensation?
Key legal issues
#Whether the termination by redundancy was unfair
Termination was fair, being for valid and procedural operational reasons under sections 40 and 45(2) of the Employment Act; the employee had been informed of the restructuring.
The appellant admitted being informed of the restructuring and receiving the redundancy letter notifying him of termination. Redundancy follows business needs and is not disciplinary or fault-based. The learned judge properly directed herself on the law of redundancy, and the Court found no fault in her reasoning, so the claim for compensation could not lie.
Quantum of leave pay and overtime
The leave award of Kshs.6,125 under section 28(1)(b) and the overtime award of Kshs.102,375 for 78 days were within the judge's discretion and would not be disturbed.
Section 28(1)(b) entitled the appellant to leave days per completed month, and the award was the minimum allowable, exercised within discretion without perversity. The 78 overtime days did not relate only to the four-month period as the appellant supposed; the award was generous and required no interference.
Legal principles established
#- Redundancy is not a disciplinary measure nor founded on employee blameworthiness; it is a response to business dictates, including restructuring or adoption of more efficient technology, and need not rest on imminent threat of economic collapse.
- On a first appeal, the appellate court must subject the entire evidence to a fresh and exhaustive analysis and draw its own inferences, while making allowance for not having heard the witnesses.
Court orders
#- 1.Upholding the judgment of the Employment and Labour Relations Court
- 2.Dismissal of the appeal
- 3.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court at Nairobi
- Jurisdiction invoked
- First appeal under the Court of Appeal Rules, 2022, Rule 31(1)(a)
Relief refused
#Compensation for allegedly unfair termination
Termination was on valid and procedural grounds of redundancy under sections 40 and 45(2) of the Employment Act
Recomputation of leave pay beyond Kshs.6,125
The award was the minimum allowable under section 28(1)(b) and within the judge's discretion
Enhanced overtime award beyond Kshs.102,375
The award of 78 days' overtime pay was generous and not inadequate
Costs
No order as to costs; each party to bear their own costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The same is never a disciplinary action against, and is not founded on any blameworthiness on the part of, an employee. Rather, it is a response to the dictates of business which may militate against retaining employees in service.
As this is a first appeal, our duty is to subject the entire evidence to a fresh and exhaustive analysis and re-appraisal so as to draw our own independent inferences of fact.
The totality of our consideration of this matter is that the learned judge made a fair and just determination and we uphold the judgment and dismiss this appeal, but with no order as to costs. Order accordingly.
Issues in the judgment
#The memorandum of appeal is undated as to case number and the judgment does not state the ELRC case number; also ground 3 refers to section 28(1)(b) while ground 2 suggests section 27(1)(b) was the provision applied by the trial judge.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mathai v Keroche Breweries Limited (Civil Appeal 20 of 2020) [2024] KECA 1697 (KLR)", Case Analysis (2024). Memorandum of Appeal dated 3rd April 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1697/eng@2024-11-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.