Macharia v Standard Chartered Bank Kenya Ltd (Civil Appeal E717 of 2024) [2026] KECA 1276 (KLR)
The bottom line
#Kenya's Court of Appeal upheld a bank's redundancy, confirming employers can restructure and select staff through interviews if they follow the law.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.whether the redundancy undertaken by the respondent was genuine
- 2.whether the process of termination of the appellant's employment was procedurally and lawful
- 3.whether the trial court ignored material evidence relating to victimization of the appellant
- 4.whether the learned judge erred by finding that the appellant had abandoned reliefs that he had pleaded and fully argued
Key legal issues
#Whether the redundancy was genuine
Yes - the restructuring of the Commercial Banking and Institutional Banking units, reducing relationship manager positions from thirteen to four, constituted a genuine operational reason.
The Court relied on the statutory definition of redundancy and the Kenya Airways and Aoraki authorities, holding that redundancy is a legitimate ground for termination based on operational requirements. The restructuring involved amalgamation of business units, abolition and reconfiguration of roles, and all affected employees were allowed to compete for retained positions. The employer's genuine belief in the redundancy situation justified the termination as a business decision.
Whether the termination process was procedurally lawful under sections 40, 41, 43 and 45 of the Employment Act
Yes - section 40 was complied with; sections 41, 43 and 45 do not apply to redundancy-based termination in the circumstances.
Notice was given to the staff and the labour officer; the definition of Commissioner of Labour includes a labour officer, so the notice was valid. The interview-based selection criterion approximated the statutory criteria. Section 41 applies to misconduct-based termination, which was overtaken by the appellant's reinstatement, and sections 43 and 45 were inapplicable because the termination was on account of redundancy, not unfair termination.
Whether the trial court ignored material evidence of victimization
No - the allegation of discrimination and harassment by the line supervisor was not proved.
The Court found that the judge had considered the evidence placed before him. The explanation given to the appellant about the restructuring and his opportunity to participate in the interviews rebutted the claim of victimization. The appellant failed to establish a nexus between the alleged workplace disputes and the redundancy decision.
Whether the trial judge erred in deeming pleaded reliefs abandoned
The trial judge misdirected himself, but this did not change the outcome because the appellant did not prove entitlement to the reliefs.
The Court accepted that the appellant pleaded and gave evidence on the reliefs, so the finding of abandonment was a misdirection on the facts. As a first appellate court it re-evaluated the evidence but found the special damages unsupported by documents (e.g., golf club membership rates merely downloaded from the internet) and the general damages claim untenable absent unfair dismissal. The dismissal of the claim was therefore affirmed.
Legal principles established
#- On a first appeal, the Court re-evaluates the evidence and draws its own conclusions, but will only overturn a trial court's finding if it is clearly wrong, based on wrong principles, or ignores material circumstances.
- Notice of redundancy given to a labour officer rather than personally addressed as the Commissioner of Labour is not a fatal omission nullifying the notice, since the Employment Act defines Commissioner of Labour to include a Labour Officer.
- Where an employer genuinely believes there is a redundancy situation arising from a business restructuring, the resulting termination is justified as a business decision, provided fair procedure is followed.
- A selection criterion of competitive interviews does not depart significantly from the statutory criteria of seniority in time, skill, ability and reliability under section 40(1)(c) of the Employment Act.
- Reliefs pleaded and supported by evidence cannot be deemed abandoned for want of justification; a trial court misdirects itself by so holding and must determine pleaded reliefs on the pleadings and evidence.
Court orders
#- 1.The appeal is dismissed
- 2.Each party shall bear its own costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court (trial court)
- Not stated in judgment
- Jurisdiction invoked
- First appeal under rule 31(1)(a) of the Court of Appeal Rules (2022)
Relief refused
#Setting aside of the trial court's judgment of 15th March, 2024 and grant of the reliefs claimed in the amended memorandum of claim
The Court found the redundancy genuine and the procedure fair, and the appellant failed to prove entitlement to the pleaded reliefs, including special damages which were pleaded without supporting documents.
General damages for unfair dismissal
The Court had already determined there was no unfair dismissal.
Costs
Each party shall bear its own costs of the appeal.
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.
Consequently, the appeal is dismissed. Each party shall bear its own costs of the appeal.
we will only overturn a trial court's finding if it is shown to be clearly wrong, or if the judge failed to take into account material circumstances, or made a finding that no reasonable tribunal, properly directing itself on the evidence could have made
We thus find that as long as the respondent genuinely believed that there was a redundancy situation, any termination was justified as this was purely a business decision.
We find that the notice sent to the “labour oficer” instead of the “Commissioner of Labour” is not a fatal omission so as to nullify the notice.
Whereas the reliefs are pleaded and witness statement captures the prayers, the appellant has not proved that he was entitled to these reliefs.
Issues in the judgment
#The judgment states the appeal was heard virtually on 3rd March, 2026 but is dated and delivered at Nairobi on 3rd July, 2026; also, the appellant is said to have been issued a termination letter dated 19th December, 2019 yet was serving effective 15th May, 2015 with a reinstatement letter of 17th February, 2020 and a redundancy around 2020 - chronology is internally consistent but the hearing/delivery dates appear in the future relative to the record described.
The coram lists D. K. Musinga as President/Judge of Appeal but the judgment contains no separately signed judgments and does not name an author; authorship of the lead judgment is inferred, not stated.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Macharia v Standard Chartered Bank Kenya Ltd (Civil Appeal E717 of 2024) [2026] KECA 1276 (KLR)", Case Analysis (2026). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1276/eng@2026-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.