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ELRCDismissedCause (not stated in judgment; related to Cause No. 1714 of 2013)· [2018] KEELRC 675 (KLR)

Joseph Musembi v Sen-Tech Limited [2018] KEELRC 675 (KLR)

Employment and Labour Relations Court
9 November 2018
2,573 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 upheld an employer's redundancy because it followed the law, so the dismissed worker got nothing extra.

What this practically means

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Executive summary

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The claimant, John Musembi, sued Sen-Tech Limited for maximum compensation and general damages for unlawful redundancy. He was employed as a Miller Machinist from 8 October 2004 and on 30 May 2013 received a letter of termination on account of redundancy, following notification of intended redundancy earlier that month. He contended that the redundancy was a sham: the respondent merely changed its name to KHS East Africa Limited, continued operating with the same staff, clients and business, and used redundancy as an excuse to terminate his employment unfairly, contrary to Sections 40, 41 and 45 of the Employment Act 2007. The respondent admitted the employment and the redundancy but explained that, under a tripartite sale agreement dated 14 June 2013, it discontinued its business operations and transferred assets to KHS East Africa Limited, which would not be a manufacturing plant. Its employee assessment concluded the machinist position would not be carried over. It relied on compliance with Section 40 procedure, including notification to the employee and the labour office, payment of terminal dues acknowledged in writing, and a Certificate of Service. The parties dispensed with oral testimony and proceeded by pleadings, documents and written submissions. The court framed two issues: whether the redundancy was unfair, unlawful, unprocedural or malicious, and whether the claimant was entitled to remedies. It found that the claimant did not contest the merger or deny that the sale agreement clause phased out his job, and did not fault the procedure or benefits. Following its earlier decision in Irene Mwende Mutuiri v Sen-Tech Limited, a colleague terminated on similar grounds, the court found no unfairness, unlawfulness or malice, held that compensation did not arise as terminal dues had been paid and acknowledged, and dismissed the claim with each party bearing its own costs.

Key legal issues

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01

Whether the redundancy was substantively justified and genuine

Holding

The redundancy was genuine: the merger agreement expressly provided that Sen-Tech would discontinue the business operations for which the claimant was employed as machinist, rendering his position superfluous

Reasoning

The claimant did not contest the merger with KHS East Africa Limited nor deny that the sale agreement clause phasing out the business operations would phase out his job as a machinist. The employee assessment form recorded that the position of machinist would not be carried over to the new company. The court found no evidence of unfairness, unlawfulness or malice.

p. 3
02

Whether the procedural requirements of Section 40 of the Employment Act were complied with

Holding

The claimant did not fault the procedure or the redundancy benefits, so the Section 40 requirements were satisfied

Reasoning

The court noted the claimant's complaint was only about the genuineness of the reasons, not the procedure or benefits. The respondent issued notice, copied the labour office, and paid terminal dues which the claimant acknowledged in writing on 1 July 2013. Having not faulted procedure and benefits, no unfairness was found.

p. 3
03

Whether the claimant is entitled to compensation

Holding

Compensation does not arise as the claimant was paid all terminal dues, which he acknowledged

Reasoning

Following its earlier decision in Irene Mwende Mutuiri v Sen-Tech Limited, a colleague terminated on similar grounds, the court found the remedy of compensation unavailable where terminal dues were paid and acknowledged. The court adopted a similar opinion and dismissed the claim.

p. 3

Legal principles established

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  • Section 40 of the Employment Act sets out the procedure for redundancy in mandatory terms, including notification, one-month notice period, selection criteria and terminal benefits
  • An employer may lawfully terminate employment based on operational requirements provided such termination is carried out in accordance with fair procedure

Court orders

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  1. 1.The claim is dismissed
  2. 2.Each party will bear its own costs

Authorities

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Legislation

  • Employment Act 2007Section 40 (including 40(1), 40(1)(a)-(g), 40(e), (f), (g), 40(l)(c))
  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 45 (including 45(1), 45(2)(b)(ii), 45(2)(c), 45(4)(b))

Cases cited (5)

  • Caroline Wanjiru Luzze -Vs- Nestle Equatorial African Region Limited
    (2012) eKLR
  • Kenya Airways Limited -v- Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR, Civil Appeal No. 46 of 2013
  • Thomas De La Rue (K) Limited -vs- David Opondo Omutelema
    [2013] eKLR, Civil Appeal No. 65 of 2012
  • Fredrick Ngari Muchira & 99 Others –vs- Pyrethrum Board of Kenya
    [2013] (unreported)
  • Irene Mwende Mutuiri -vs- Sentech Limited
    Cause No. 1714 of 2013 (unreported)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (Sections 40, 41, 43, 45)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Joseph Musembi v Sen-Tech Limited [2018] KEELRC 675 (KLR)", Case Analysis (2018). Cause (not stated in judgment; related to Cause No. 1714 of 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/675/eng@2018-11-09

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