Daniel Juma v Bob Morgan Services Limited [2016] KEELRC 1563 (KLR)
The bottom line
#A Kenyan court ruled that paying an employee cash instead of following redundancy law makes the dismissal unfair and compensable.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was a redundancy requiring compliance with section 40 of the Employment Act
The termination letter itself disclosed that termination followed loss of a client contract, bringing it squarely within the statutory definition of redundancy, and the employer complied with none of the section 40 requirements
The court examined the termination letter which cited the client's termination of contract. It found the cause was loss of employment through no fault of the employee, initiated by the employer, hence redundancy under section 2 and section 40 of the Employment Act. The employer gave no general or specific notice, undertook no assessment or consultation, and did not report to the Labour Officer, so the mandatory procedure was not followed.
Whether the Claimant was unfairly dismissed
Yes - failing to follow due process in a redundancy-based lay-off amounts to unfair dismissal
The court held that although the claim was couched as ordinary unfair dismissal, the substance was redundancy. The Respondent's failure to adhere to the mandatory legal requirements of section 40 meant the Claimant was dismissed without due cause. The court treated non-compliance as unfair labour practice contrary to Article 41 of the Constitution, following Hezbon Waigi v Equatorial Commercial Bank.
What remedies flow from the unfair termination
Compensation of six months' gross pay (Kshs.109,500) plus salary for 5 days worked in November 2013 (Kshs.3,042); notice pay settled and service pay declined
Having found unfair dismissal, the court awarded six months' gross pay as compensation for the abrupt loss of employment. Notice pay was admitted as paid, and service pay was barred by section 35(5) and (6) because NSSF contributions were deducted, as evidenced by the pay slip. Salary for days worked up to termination was also due and awarded.
Legal principles established
#- Payment of notice in lieu does not satisfy the mandatory notice requirements of section 40 of the Employment Act in a redundancy; the employer must give advance notice, undertake assessment and consult, and report to the Labour Officer
- A lay-off for redundancy executed without compliance with section 40 amounts to unfair dismissal even if the claim is pleaded as unfair termination
Court orders
#- 1.Judgment entered for the Claimant for Kshs.109,500.00 as compensation for unfair dismissal
- 2.Kshs.3,042.00 for 5 days worked in November 2013
- 3.Costs of the suit awarded to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (Articles 41 of the Constitution referenced)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Daniel Juma v Bob Morgan Services Limited [2016] KEELRC 1563 (KLR)", Case Analysis (2016). Cause No. 2096 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1563/eng@2016-02-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.