Kenya Plantation & Agricultural Workers Union v Oserian Development Company Limited [2016] KEELRC 958 (KLR)
The bottom line
#Kenya's Employment Court halted Oserian's plan to make 618 workers redundant because the employer skipped legally required notice steps.
What this practically means
#Executive summary
#Key legal issues
#Validity of the reasons for the intended redundancy
The court found valid reasons existed, arising from the increased geothermal energy costs following expiry of the Kengen lease, rendering the farming operations unviable.
The notices of 12th May and 31st May 2016 gave reasons of escalated power tariffs, unaffordable energy sources and restructuring. The respondent explained that the geothermal heating lease from Kengen, entered on 12.2.2001 for ten years, expired and renegotiation produced an astronomical fee rise from Kshs 1 million to between Kshs 90 and 100 million, making greenhouse operations uneconomical. The claimants did not demonstrate otherwise, so issue one was resolved in the respondent's favour.
Procedural compliance with Section 40 of the Employment Act
The court found the procedural requirements of Section 40 had not been complied with, noting the notice period to the Labour Officer fell below one month and notification of the Labour Officer for the 370 redundancies came only on 6.6.2016.
Section 40(1)(a) requires notification of the union and the labour officer not less than one month before termination on account of redundancy. The letter to the Labour Officer dated 31/5/2016 carried a notice period below the statutory requirement, and for the 12.5.2016 notice affecting 370 staff, there was no notice to the Labour Office until 6.6.2016. The application filed on 2.6.2016 predated that notification, defeating the suggestion that a 30-day notice ran from 31.5.2016.
Whether consultation with the union is mandatory before redundancy
Consultation is not mandatory but the law envisages some form of consultation, and its absence where reasonably expected may cast doubt on the genuineness of the redundancy.
Relying on the Court of Appeal decision in Kenya Airways v Aviation and Allied Workers Union, the court accepted that imposing an absolute consultation requirement would be inconsistent with the employer's right to run its business, but that absence of consultation where reasonably expected may cast doubt on the genuineness or timing of the redundancy, as may failure to consider redeployment. Here no consultations had taken place between the respondent and the union.
Legal principles established
#- Consultation between employer and union in a redundancy is not mandatory, but the absence of consultation where it would reasonably be expected may cast doubt on the genuineness of the redundancy, and statutory notice requirements under Section 40(1) of the Employment Act must be adhered to.
- A flawed redundancy process can only be restarted on a fresh notice issued in compliance with due process.
Court orders
#- 1.Confirmation of the interim orders
- 2.The parties to give dialogue another chance and adhere to the procedural requirements of the law
- 3.The intended redundancy stayed as parties engage in negotiations
- 4.Any redundancy to proceed only on a new redundancy notice issued while following due process
- Jurisdiction invoked
- Section 12(1), (2), (3) & (4) of the Industrial Court Act, 2011 read together with Section 16(3) of the Industrial Court Procedure Rules, 2012
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.
- Helga Ohany v Germany School Society [2017] KEELRC 1919 (KLR)[2017] KEELRC 1919 (KLR)17 Jan 2017
Cite this brief
#Cite this brief
Caselaw, "Kenya Plantation & Agricultural Workers Union v Oserian Development Company Limited [2016] KEELRC 958 (KLR)", Case Analysis (2016). Amended Notice of Motion dated 20th June 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/958/eng@2016-07-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.