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ELRCPartially AllowedNot stated in the judgment (Claimant's Memorandum of Claim filed 22nd January 2014)· [2018] KEELRC 241 (KLR)

Ancent Mumo Kalani v Nairobi Business Ventures Limited [2018] KEELRC 241 (KLR)

Employment and Labour Relations Court
20 December 2018
HWHellen Wasilwa
3,063 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a same-day redundancy unfair because the employer skipped the required notices and consultation, awarding the employee over Kshs. 305,000.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent on 31st July 2012 as a Shop Manager earning Kshs. 41,250 at termination, sued for damages for unlawful termination following a letter of termination dated 5th June 2013 in which the Respondent cited breach of clauses 16 and 17 of the employment letter. The Respondent admitted the employment relationship but defended the termination as a redundancy occasioned by the closure of the Village Market Mall shop for renovation for about six months to a year, asserting it paid one month's salary in lieu of notice. The Claimant argued that Sections 40, 41, 43 and 45 of the Employment Act were not followed: no notice of intended redundancy was issued to him or to the labour officer, and there were no consultations. The Respondent conceded non-compliance with Section 40's requirement of notice to the labour officer but urged that the penalty should not exceed one month's salary, citing Charles Nyangi Nyamohanga v Action Aid International, and opposed reinstatement as not meriting exceptional circumstances under Section 49. The court framed a single issue: whether the redundancy was procedurally fair under Section 40. It found the Claimant was served with a termination letter effective the same day, with no notice as required under Section 40(1)(f), and that payment of one month's salary in lieu of notice did not satisfy the consultation requirement implicit in Section 40(1), as explained by Maraga JA in the Kenya Airways case. The court declared the termination unfair and awarded one month's salary in lieu of notice (Kshs. 41,250), six months' salary as compensation (Kshs. 247,500), and pro-rata leave (Kshs. 17,160), totalling Kshs. 305,910, plus costs and interest at court rates from the date of judgment. Judgment was delivered by Hon. Lady Justice Hellen Wasilwa on 20th December 2018.

Key legal issues

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Whether the redundancy was procedurally fair under Section 40 of the Employment Act, 2007

Holding

The termination was procedurally unfair because no notice was issued to the Claimant as envisaged under Section 40(1)(f), and no consultation took place; payment of one month's salary in lieu of notice did not cure this

Reasoning

The court examined Section 40(1) conditions for fair redundancy. The Claimant was served with a termination letter dated 5/6/2013 taking effect the same day, with no prior notice as required. Although the Respondent paid one month's salary in lieu of notice, relying on the Kenya Airways decision (Maraga JA), the court held that the notices under Section 40(1) are not merely informational but are meant to enable consultation to avert or minimise terminations. The Respondent admitted failure to notify the labour officer under Section 40. The termination was therefore unfair.

p. 3

Legal principles established

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  • An employer terminating on account of redundancy must comply with all conditions in Section 40(1) of the Employment Act, including notifying the employee and the labour officer, and payment of one month's notice wages and severance pay
  • Payment of one month's salary in lieu of notice does not satisfy the consultation requirement implicit in Section 40(1) of the Employment Act before redundancy

Court orders

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  1. 1.1 month salary in lieu of notice of Kshs. 41,250/=
  2. 2.6 months' salary as compensation for unfair termination of Kshs. 247,500/= (6 x 41,250)
  3. 3.Pro-rata leave for the year of Kshs. 17,160/=
  4. 4.Total award of Kshs. 305,910/= to the Claimant
  5. 5.Respondent to pay costs of the suit plus interest at court rates with effect from the date of the judgment

Authorities

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Legislation

  • Employment Act, 2007Section 40 (including 40(1)(a), (b), (f))
  • Employment Act, 2007Section 2 (definition of redundancy)
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45(1), (2), (4) and (5)
  • Employment Act, 2007Section 49 (including 49(4)(a) to (m))
  • Labour Relations Act, 2007Part VIII, Section 62(4)

Cases cited (6)

  • Julie Topirian Njeru versus Kenya Tourist Board
    Industrial Cause No. 886 of 2010
  • Kenya Airways Limited vs Aviation & Allied Workers Union Kenya & 3 Others
    Civil Appeal No. 46 of 2013 (2014) eKLR
  • Charles Nyangi Nyamohanga vs Action Aid International
    (2015) eKLR
  • Kenya Power & Lighting Company Limited -Versus- Aggrey Lukorito Wasike
    [2017] eKLR
  • D.K Njagi Marete v Teachers Service Commission
    [379[N] of 2009
  • Mugford v. Midland Bank
    UK Employment Appeal Tribunal, 10
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (unfair termination claim)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Ancent Mumo Kalani v Nairobi Business Ventures Limited [2018] KEELRC 241 (KLR)", Case Analysis (2018). Not stated in the judgment (Claimant's Memorandum of Claim filed 22nd January 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/241/eng@2018-12-20

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