Evans Muchangi Mureithi v J B Drilling Kenya Ltd [2015] KEELRC 1290 (KLR)
The bottom line
#A Kenyan employer lost an unfair redundancy case because it skipped the notice, disclosure, and severance steps required by law before ending a job.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimant's employment was unlawful and unfair
The termination was involuntary and in substance a redundancy, effected without compliance with section 40 of the Employment Act, and was therefore both procedurally and substantively unfair
The Court found that the Claimant's position became superfluous after his duties were re-assigned to other staff and Medic (K) Ltd was closing, making the termination a redundancy. The Respondent did not plead redundancy, did not notify the Claimant and the Labour Officer in writing one month in advance, did not disclose selection criteria, paid no severance pay, and led no proof of valid operational reasons. Both procedural and substantive fairness failed.
Whether the reduction of the Claimant's salary from Kshs 39,000/- to Kshs 20,000/- was lawful and fair
The variation was mutually agreed: the Claimant signed the letter dated 27 September 2007 signifying his agreement, and by continuing in employment for some four years he acquiesced in the variation
Applying the general rule that a contractual variation must be mutually agreed, the Court examined the documentation and found the Claimant had signed the letter denoting agreement to the reduced salary. He continued performing the same duties and only challenged the variation when his employment ended years later; the Court held he should have walked away and claimed constructive dismissal, and that his conduct amounted to acquiescence.
Whether the Respondent was liable for claims against Medic International (notice pay and salary arrears)
The claims against Medic International failed; no cause of action was demonstrated against Medic International or against the Respondent as its agent, and the stale claims should have been raised much earlier
The evidence on the relationship with Medic International was unclear. The Claimant was last paid wages by Medic International in 2007 yet waited until his discharge to claim arrears. Non-payment of wages is a fundamental breach, but the Claimant neither raised complaints earlier nor demonstrated a cause of action against Medic International or the Respondent as its agent; the notice and arrears claims were accordingly dismissed.
What remedies were appropriate for the unfair redundancy
Taking into account about 12 years of service, service pay already received, partial terminal benefits paid in 2007 and a gross wage of Kshs 21,500/- at termination, compensation of 4 months gross wages (Kshs 86,000/-) was awarded
Because the position was declared redundant without compliance with the law and the Respondent failed to prove operational reasons, compensation under section 49 was warranted. The Court weighed the length of service (about 12 years), the service pay and partial terminal benefits already received, and fixed compensation at the equivalent of 4 months' gross wages, computed at the then-current gross wage of Kshs 21,500/-, totalling Kshs 86,000/-.
Legal principles established
#- For any variation of a term of a contract of employment to be lawful, it must be mutually agreed between the employer and the employee
- Where an employer terminates through redundancy, it must comply with the conditions in section 40 of the Employment Act, including written notice to the employee and the local Labour Officer one month in advance, disclosure of the criteria for selection, and payment of severance pay
- In a redundancy challenge, the employer bears the burden under section 45(2)(b)(ii) of the Employment Act to prove that the reasons for termination were valid and fair and based on operational requirements
- An employee who accepts a salary variation and continues in employment for years may be taken to have acquiesced to the variation and ought to have claimed constructive dismissal instead
Court orders
#- 1.The Respondent to pay the Claimant compensation equivalent to 4 months gross wages of Kshs 86,000/-
- 2.All other claims dismissed
- 3.The Claimant to have costs of the Cause
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007; cause filed as a Memorandum of Claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Evans Muchangi Mureithi v J B Drilling Kenya Ltd [2015] KEELRC 1290 (KLR)", Case Analysis (2015). Cause No 60 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1290/eng@2015-03-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.