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Court of AppealAllowedNairobi Civil Appeal (ELRC Appeal from Nairobi ELRC Cause No. 493 of 2016)· [2025] KECA 148 (KLR)

National Oil Corporation of Kenya v Others & 37 Others

Court of Appeal of Kenya
7 February 2025
3,484 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled National Oil's 2000 redundancies were lawful, and struck out 12-months-per-year compensation awards as unavailable in law.

What this practically means

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Executive summary

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The Court of Appeal (Sichale, Tuiyott and Ochieng, JJA) allowed an appeal by National Oil Corporation of Kenya against the judgment of Wasilwa, J of 20th December 2018 in Nairobi ELRC Cause No. 493 of 2016, which had awarded numerous former employees compensation for unfair redundancy at 12 months' salary for each year worked. The employees, declared redundant in 2000 and 2001, had sued claiming the redundancy lacked board authority and notifications to the Ministry of Energy and other state organs. Framing two issues, the Court first found, on re-evaluation of the record as a first appeal, that the requisite notices had been issued: an internal memo dated 25th October 2000, a 19th October 2000 letter to unionisable staff following a 7th July 2000 union notice, and minutes of meetings with the Kenya Petroleum Workers Union. Following Maraga JA's reasoning in the Kenya Airways case, it held the respondents received the requisite notices and that the appellant substantially complied with Section 16A of the repealed Employment Act; although seniority, skill, ability and reliability were not strictly considered in selection, the appellant had sought guidance from the parent ministry, so the failure did not render the redundancy illegal. Second, the Court held the award of 12 months' salary for each year worked was not a remedy contemplated by Section 16A(d), (e) and (f) of the repealed Employment Act nor by Section 15 of the then Trade Disputes Act, and was alien to law. The Court set aside all consequential orders of the trial court in their entirety and ordered each party to bear its own costs, citing the chequered litigation history. The judgment now binds lower courts on redundancy notice sufficiency and the statutory limits of redundancy remedies.

Key legal issues

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01

Whether the redundancy process was unprocedural and unfair for want of notice and failure to follow Section 16A of the repealed Employment Act

Holding

The appellant substantially complied with Section 16A; requisite notices were issued (internal memo dated 25th October 2000, union notice dated 7th July 2000, meetings minutes) and the declaration of redundancy was procedural and lawful.

Reasoning

The Court re-evaluated the record as a first appeal and found several notices: a 25th October 2000 internal memo, a 19th October 2000 letter to unionisable staff following a 7th July 2000 union notice, and minutes of meetings with the Kenya Petroleum Workers Union. Relying on Kenya Airways, it held general notice to employees or their union suffices to elicit consultation. On selection criteria, the Court found nothing showed the oldest employees were targeted, and although seniority, skill, ability and reliability were not strictly applied, the appellant had sought guidance from the parent ministry, so the failure did not render the redundancy illegal.

p. 6
02

Whether the award of 12 months' salary for each year worked as compensation for unfair redundancy was available in law

Holding

The award was not among the remedies contemplated by Section 16A(d), (e) and (f) of the repealed Employment Act, nor by Section 15 of the then Trade Disputes Act, and was alien to law; it could not stand.

Reasoning

The Court confirmed the trial judge had indeed awarded compensation for unfair redundancy at 12 months' salary for each year worked. Section 16A(d), (e) and (f) provided only for payment of leave in cash, one month's notice or wages in lieu, and severance pay at not less than 15 days' pay per completed year of service. Even if the redundancy had been unlawful, Section 15 of the Trade Disputes Act did not contemplate such compensation. The award was therefore set aside with all consequential orders.

p. 3

Legal principles established

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  • An employer who gives general notice of an intended redundancy to the affected employees or their union, and consults, substantially complies with the notice requirements for redundancy; the notice at the initial stage need not name the affected employees.
  • The 'last-in-first-out' principle in redundancy selection is not mandatory; an employer may use any of the statutory criteria, though the criteria used must not be opaque.
  • Compensation of 12 months' salary for each year worked was not a remedy contemplated under the repealed Employment Act's redundancy provisions and such an award is alien to law.

Court orders

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  1. 1.Appeal allowed
  2. 2.All the consequential orders issued by Wasilwa, J on 20th December 2018 set aside in their entirety
  3. 3.Each party shall bear his/its own costs
On appeal from
Employment and Labour Relations Court at Nairobi
ELRC Cause No. 493 of 2016
Jurisdiction invoked
First appeal to the Court of Appeal under rule 31 of the rules of this Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "National Oil Corporation of Kenya v Others & 37 Others", Case Analysis (2025). Nairobi Civil Appeal (ELRC Appeal from Nairobi ELRC Cause No. 493 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/148/eng@2025-02-07

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