Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 1343 of 2013· [2015] KEELRC 1049 (KLR)

Raphael Muchunu Mwangi v Dhl Excel Supply Chain (K) Ltd [2015] KEELRC 1049 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
25 May 2015
3,655 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled DHL's redundancy process was unfair for skipping mandatory steps, but awarded only one month's salary as compensation.

What this practically means

#

Executive summary

#
The claimant, employed by the respondent from 1st December 2002 and last serving as Accounts Receivable Manager at Kshs.230,786.00 per month, was terminated on grounds of redundancy on 2nd November 2012 following the respondent's change of accounting systems and restructuring of its finance shared services function. He challenged the termination as unlawful under section 40 of the Employment Act, seeking reinstatement or, alternatively, various dues and damages totalling about Kshs.19.9 million. The respondent maintained that due process was followed, vacancies were advertised internally, the claimant declined to apply for redeployment, and all terminal dues including three months' notice pay, leave and severance pay were paid. The court found that redundancy is regulated by mandatory steps under section 40, including genuine consultations, a pre-set criteria and reporting to the Labour Officer. The respondent failed to prove consultations took place with the claimant and other affected employees, and the process was not reported to the Labour Officer; the termination was therefore unfair. Severance and notice pay claims were abandoned. On remedies, the court awarded one month's salary as compensation, taking into account the claimant's refusal to apply for available positions and the generous terminal dues already paid, plus Kshs.15,385.70 for two days worked in November 2012. Claims for house allowance, relocation allowance, bonus and general damages were declined; the Certificate of Service was ordered issued unconditionally within 7 days. The claimant was awarded 50% of his costs.

Key legal issues

#
01

Whether the redundancy declaring the claimant's position redundant was conducted in accordance with section 40 of the Employment Act

Holding

The redundancy process was flawed - consultations with affected employees were not proved and the process was not reported to the Labour Officer - so the termination was unfair

Reasoning

The court held that redundancy is a sensitive process regulated by section 40, requiring genuine business reasons, consultations, a pre-set selection criteria, and involvement of the Labour Officer. The respondent could not prove consultations took place before issuing the notice, there was no record of other affected employees, and the process was not reported to the Labour Officer. The mandatory statutory provisions not being followed, the termination was unfair.

p. 5
02

What remedies flow from the unfair redundancy

Holding

Compensation of one month's salary was appropriate given the claimant's refusal to apply for available jobs and the generous terminal dues already paid; plus pay for 2 days worked

Reasoning

The court took into account that the claimant was given an opportunity to apply for redeployment but declined, and that terminal dues including notice pay and above-minimum severance pay were paid promptly. Balancing these factors, one month's salary was deemed appropriate compensation. The respondent's payment breakdown did not include pay for the 2 days worked in November 2012, which was awarded.

p. 5
03

Whether the claimant was entitled to house allowance, relocation allowance and bonus

Holding

All three claims declined: salary was consolidated, relocation allowance was a CBA benefit not applicable to a non-unionised employee, and bonuses are discretionary

Reasoning

The contract of service expressly provided a consolidated salary, so house allowance could not be claimed separately. The relocation allowance arose under a collective bargaining agreement, but the claimant admitted he was not unionised and the benefit was not in his individual contract. Bonuses, being discretionary unless already allocated and communicated, could not be pursued as a right.

p. 6

Legal principles established

#
  • Redundancy under section 40 of the Employment Act involves mandatory steps including consultation, a pre-set criteria, and reporting to the Labour Officer; non-compliance renders the termination unfair and curable by damages
  • Failure to follow section 40's mandatory provisions results in an unfair termination

Court orders

#
  1. 1.A declaration that the termination on account of redundancy was unfair
  2. 2.Compensation awarded at Kshs.230,786.00
  3. 3.Pay for 2 days worked in November 2012 at Kshs.15,385.70
  4. 4.Certificate of Service be issued unconditionally within 7 days, and where the Claimant cannot collect it personally, be sent to his last known postal address on the 14th day
  5. 5.Monies payable subject to the provisions of section 49(2) of the Employment Act
  6. 6.Claimant awarded 50% of his costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (section 40 and section 49)

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.

Cite this brief

#

Cite this brief

Caselaw, "Raphael Muchunu Mwangi v Dhl Excel Supply Chain (K) Ltd [2015] KEELRC 1049 (KLR)", Case Analysis (2015). Cause No. 1343 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1049/eng@2015-05-25

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