Joseph Kiplangat Ngeno & 13 others v Kenya Investment Authority [2014] KEELRC 136 (KLR)
The bottom line
#Kenya's Industrial Court upheld a retrenchment of 14 employees because the employer proved a genuine business reason and followed fair procedure under the Employment Act.
What this practically means
#Executive summary
#Key legal issues
#Whether the retrenchment was for a valid reason
There was a lawful and justifiable reason: restructuring following the Investment Act 2004 which replaced the Investment Promotion Centre with Kenya Investment Authority, backed by Government policy and approvals including Head of Public Service approval
The court found as fact that the new Investment Act 2004 created the Kenya Investment Authority in place of the IPC; a new Strategic Plan and restructuring programme followed Government policy; the old outfit was bloated with a mismatch between staff and new structure; a rationalisation report was prepared in advance; the Board resolved on restructuring on 2nd October 2007; and the Head of Public Service approved retrenchment of the fourteen staff with a package.
Whether the retrenchment followed a lawful and fair procedure
Procedure was fair: all staff were invited to apply for at least three positions, trained in advance, subjected to objective placement interviews by an independent team, notified timeously, and paid a package exceeding Section 40 minimums
The court found the interviews objective and independent, providing an opportunity to match skills and competency to the new job descriptions. The Claimants failed to prove on a balance of probabilities that the exercise was not objectively done. There was no evidence of discrimination or malice, and the notification, training and enhanced package satisfied the requirements of Section 40(1) of the Employment Act, adopting the reasoning in Feisal Ahmed v Nokia International.
What remedy is available to the Claimants
None; the suit was dismissed, though the court declined to award costs against the Claimants because they lost their employment through no fault of their own
Having found both a valid reason and fair procedure, no remedy lay. However, the court exercised discretion on costs, recognising the Claimants' grievance was understandable despite the Respondent's compliance with the law, and ordered each party to bear its own costs rather than load costs on the losing Claimants.
Legal principles established
#- The requirements of Section 40(1)(b), (c), (e), (f) and (g) of the Employment Act go to the fairness of the retrenchment process, not to the validity of the reason for redundancy
- An employer who complies with all requirements of Section 40 of the Employment Act and uses objective selection criteria commits no wrong even where employees lose employment through no fault of their own
Court orders
#- 1.The suit by the fourteen (14) Claimants is dismissed
- 2.All parties will bear their own costs of the suit
- Jurisdiction invoked
- Original employment jurisdiction of the Industrial Court; suit initially filed in the High Court and transferred to the Industrial Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joseph Kiplangat Ngeno & 13 others v Kenya Investment Authority [2014] KEELRC 136 (KLR)", Case Analysis (2014). Industrial Court Cause (memorandum of claim dated 27th February 2012, filed 28th February 2012). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/136/eng@2014-11-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.