Nicholas Wachira Koigia v Ncr Kenya Limited [2013] KEELRC 860 (KLR)
The bottom line
#A Kenyan court ruled a redundancy was unlawful only because the employer failed to notify the labour officer, awarding the employee Kshs.9.9 million in terminal dues.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy of the Claimant was unlawful and unfair
The redundancy was unlawful only to the extent that the Respondent failed to notify the Labour Officer as required by section 40(1)(b) of the Employment Act; it was otherwise not unfair, as there is no legal requirement for consultation before the decision to declare redundancy.
Section 40(1) prescribes notification of the employee personally in writing and the labour officer, with one month's notice/pay and severance at not less than 15 days' pay per completed year. The court held the statute requires notification, not pre-decision consultation, distinguishing Aviation & Allied Workers Union v Kenya Airways. The Respondent admitted it did not notify the labour officer, a mandatory requirement, making the redundancy unlawful only on that ground.
Whether severance pay should include the car allowance
No. Severance pay is calculated on basic salary only; the car allowance was a separate facility allowance, not part of wages or salary.
The Claimant previously had a company car which was withdrawn and replaced with a car allowance to facilitate customer visits. Pay is not defined in the Employment Act, but basic pay excludes allowances. The Claimant himself admitted that computed without car allowance the Respondent's calculation was correct.
Whether the Claimant was entitled to 1 year's salary as ex-gratia and medical cover of Kshs.3,315,000
Both claims fail. Ex-gratia is discretionary and was negotiated and approved at 6 months' salary; medical cover is claimable only upon illness and utilization of medical attention, not payable in cash.
The Managing Director testified ex-gratia is normally 3 months' salary and he negotiated 6 months for the Claimant. Being discretionary, it could not found a legitimate expectation of a year's salary. The medical cover was an insurance-based inpatient scheme with in-house outpatient limits, and the Claimant submitted no medical claims, so no cash entitlement arose.
Legal principles established
#- Under section 40(1)(a) and (b) of the Employment Act, an employer is not required to consult or notify the employee before the decision to declare redundancy is made; notification follows the decision.
- Notification of the labour officer in writing of an intended redundancy is a mandatory requirement of section 40(1)(b) of the Employment Act; failure to notify renders the redundancy unlawful to that extent.
- Severance pay under section 40(1)(g) is calculated on basic salary; allowances such as car allowance do not form part of basic pay.
Court orders
#- 1.The Respondent to pay the Claimant's terminal benefits of Kshs.9,928,408.78.
- 2.The Claimant's claim (for the higher figure of Kshs.18,696,046, 1 year's salary as ex-gratia, car allowance in severance computation, and medical cover) is dismissed.
- 3.Each party to bear its own costs.
- Jurisdiction invoked
- Original jurisdiction over employment and labour relations disputes (Employment Act; Memorandum of Claim filed 19th October 2011)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Bajaber v Planning Systems Services Limited (Cause E871 of 2021) [2025] KEELRC 2846 (KLR)[2025] KEELRC 2846 (KLR)23 Oct 2025
Cite this brief
#Cite this brief
Caselaw, "Nicholas Wachira Koigia v Ncr Kenya Limited [2013] KEELRC 860 (KLR)", Case Analysis (2013). Memorandum of Claim dated 17th October 2011, filed 19th October 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/860/eng@2013-09-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.