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ELRCPartially AllowedCause No 815 of 2015· [2015] KEELRC 151 (KLR)

Kenya Union of Domestic Hotels Educational Institutions and Hospital Workers (KUDHEIHA) v Aga Khan University Hospital Nairobi [2015] KEELRC 151 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
30 November 2015
10,980 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~44 min to read original · ~4 min brief

The bottom line

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A Kenyan court voided the Aga Khan Hospital's redundancy notice because it bypassed the union, showing employers must follow CBA consultation rules.

What this practically means

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Executive summary

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KUDHEIHA, a trade union with a Recognition Agreement and a Collective Bargaining Agreement dated 29th August 2014 with the Aga Khan University Hospital Nairobi, challenged the Respondent's redundancy process arising from a 2014 organisational assessment and intended restructuring. The union sought declarations that the redundancy notice dated 14th May 2015 was null and void, that the Respondent had not justified the redundancy, an order compelling compliance with the CBA, an order restraining interference with its members, and costs. The Respondent defended the process as compliant with section 40 of the Employment Act and clause 11 of the CBA, arguing the claim was premature as no redundancy had been declared and the impugned notice had been withdrawn. The Court held that redundancy is a process which commences once a decision to reorganise is reached, and that the two-month statutory notice could not be used to bypass the CBA requirement that notice be issued to the union. The notice of 14th May 2015 was declared null and void for breaching clause 11 of the CBA and section 40 of the Employment Act; its subsequent withdrawal could not cure the violation. Following authorities including Thomas De La Rue and Kenya Airways v Aviation & Allied Workers Union, the Court stressed that consultation must be real and not cosmetic, and criticised the Respondent for issuing new notices outside the Court process while the suit was pending, which it found to be bad faith. Prayer for an order against interference with members was refused for want of evidence, as was compensation, since no damage was proved. Judgment was entered for the Claimant with costs to the Claimant.

Key legal issues

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01

Validity of the redundancy notice of 14th May 2015

Holding

The notice was declared null and void because it was issued in violation of clause 11 of the Collective Bargaining Agreement and section 40 of the Employment Act, and its subsequent withdrawal could not cure the violation.

Reasoning

The parties had a Recognition Agreement and a CBA requiring that any redundancy notice be issued to the Claimant well in advance. The Respondent issued the notice directly to employees, copying the Claimant for information, contrary to clause 11 and section 40(1)(a). The Court found the notice invalid from inception; withdrawal while the suit was pending could not negate the finding of non-compliance.

02

Whether the Respondent justified the reasons for redundancy

Holding

Procedurally, once the initiating notice was found invalid, no subsequent step taken by the Respondent could stand; the Respondent could not ride on a procedural illegality.

Reasoning

The Court accepted that the employer has the prerogative to declare a redundancy provided it is justified, but where the process breaches fundamental provisions of law or agreed CBA terms, the law must prevail. The invalid notice meant any later steps had no legal consequence, and the Respondent's self-contradictory pleading showed the redundancy process had in fact commenced.

p. 12
03

Whether the Respondent must abide by the Collective Bargaining Agreement

Holding

Clause 11 of the CBA, requiring notice to the Claimant, is binding and aligned with section 40(1) of the Employment Act; the Respondent was bound to share the redundancy process with the Claimant.

Reasoning

The Court of Appeal authority in Thomas De La Rue confirms parties may agree on better terms than the statutory minimum. Consultations must be real and inclusive, with the employer keeping an open mind, and the union must attend with an open mind. The employer should have invited the Claimant for consultations as early as December 2014 when rumours surfaced.

p. 15
04

Whether the Respondent interfered with the Claimant members

Holding

No evidence of interference was found; the Respondent had, however, ignored the Claimant's role in representing unionised members.

Reasoning

Recognition of the Claimant is a legal process and the CBA is a legal document that must be respected in industrial relations. The Court also criticised the Respondent for issuing new notices outside the Court process while the suit was pending, describing that conduct as bad faith and contrary to the just administration of disputes.

p. 15

Legal principles established

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  • Parties to a collective agreement may agree on more favourable redundancy terms than the statutory minimum, and such terms take precedence
  • Redundancy is a process that commences once a decision and need to reorganise has been reached; the statutory notice cannot hold back the intention of redundancy
  • Consultation in a redundancy process must be genuine and not cosmetic
  • A party whose contractual/legal rights have been violated retains recourse before the Court notwithstanding a subsequent withdrawal of the offending notice

Court orders

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  1. 1.Declaration that the Notice issued by the Respondent and dated 14th May 2015 is null and void
  2. 2.A finding that the notice of 14th May 2015 was in breach of clause 11 of the Collective Bargaining Agreement between the parties and section 40 of the Employment Act
  3. 3.A declaration that the notices issued after commencement of the suit are of no legal force, to avoid litigation in instalments
  4. 4.The Respondent shall meet the claimant's costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 2 (definition of redundancy)
  • Employment Act, 2007section 40(1)(a)
  • Employment Act, 2007section 43
  • Employment Act, 2007section 45
  • Employment and Labour Relations Court Actsection 12

Cases cited (12)

  • KUDHEIHA versus Mombasa Sports Club, Cause No.440 of 2013 (Mombasa)
  • The Wrigley Company (EA) Limited versus The AG & Others, Petition No.22 of 2012
  • Joseph Tama Ndua & Others versus Jacaranda Hotels Mombasa Ltd t/a Jacaranda Indian Ocean Beach Resort, Cause No.271 of 2013 (Mombasa)
  • Jane Khalechi versus Oxford University Press E.A. Ltd, Cause No.924 of 2010
  • Kenya Airways Limited versus Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR
    [2014] eKLR
  • Plotti versus The Acacia Company Limited [1959] E.A. 248
    [1959] E.A. 248
  • S. N. Shah versus C. M. Patel & Others [1961] EA 397
    [1961] EA 397
  • Madinga versus Petroleum Control Commission, IRC 176 of 2001 (Malawi)
    IRC 176 of 2001
  • BMD Knitting Mills (PTY) Limited versus South Africa Clothing and Textile Workers Union (SACTWU) 1998 (19) ILJ 1451 (LAC)
    1998 (19) ILJ 1451 (LAC)
  • Thomas De La Rue (K) Ltd versus David Opondo Omutelema [2013] eKLR
    [2013] eKLR
  • Aviation and Allied Workers Union versus Kenya Airways Limited, Cause No.1616 of 2012
  • Kenya Plantation & Agricultural Workers Union versus James Finlay (K) Limited [2013] eKLR
    [2013] eKLR
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Court Act (disputes arising from employment and labour relations, including redundancy and Collective Bargaining Agreements)

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, "Kenya Union of Domestic Hotels Educational Institutions and Hospital Workers (KUDHEIHA) v Aga Khan University Hospital Nairobi [2015] KEELRC 151 (KLR)", Case Analysis (2015). Cause No 815 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/151/eng@2015-11-03

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