Kanini Kioko v A-Z Data Solutions Limited [2016] KEELRC 591 (KLR)
The bottom line
#A Kenyan employer that fires staff citing cashflow must follow redundancy rules under Section 40 of the Employment Act, or pay compensation for unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimant's employment was unlawful/unfair
The termination was substantively and procedurally unfair; it was in substance a redundancy effected without compliance with Section 40 of the Employment Act
The termination email cited cashflow constraints, indicating the termination was in substance a redundancy. Section 40 sets mandatory conditions for redundancy, including notification of the employee and labour officer, one month's notice or wages in lieu, and severance pay. There was no evidence the Respondent observed any of these conditions, so following Francis Maina Kamau v Lee Construction, the termination became unfair under Section 45.
Whether the Claimant was entitled to the remedies sought, including shares
Compensation of three months' salary, notice pay, admitted salary arrears and prorata leave were awarded; the share transfer claim was dismissed as unproved
The court took into account the Claimant's length of service (about six months) and the Respondent's conduct. Salary for December 2013 to March 2014 was admitted and payable, and prorata leave was allowed. However, the claim for transfer of shares was not proved and was dismissed. Amounts already paid in July 2014 were deducted.
Legal principles established
#- Where an employer fails to observe the conditions in Section 40 of the Employment Act when terminating on grounds amounting to redundancy, the termination becomes unfair under Section 45
Court orders
#- 1.3 months' salary in compensation of Kshs. 1,200,000
- 2.1 month's salary in lieu of notice of Kshs. 400,000
- 3.Salary for December 2013 to March 2014 of Kshs. 1,600,000
- 4.Prorata leave of Kshs. 116,667
- 5.Less amount paid in July 2014 of Kshs. 200,000, total amount payable Kshs. 3,000,000
- 6.Interest at court rates on the judgment amount from the date of judgment until payment in full
- 7.Claimant to have the costs of the case
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kanini Kioko v A-Z Data Solutions Limited [2016] KEELRC 591 (KLR)", Case Analysis (2016). Cause No 1289 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/591/eng@2016-09-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.