Hamisi Mwinyi Nyerere & 18 others v Uchumi Supermarket [2018] KEELRC 1557 (KLR)
The bottom line
#Uchumi Supermarket's one-month redundancy notices were worthless because staff were barred from working during them, so the Employment Court ordered fair compensation.
What this practically means
#Executive summary
#Key legal issues
#Compliance with Section 40 of the Employment Act in effecting redundancy
The redundancy was effected unlawfully because although a one-month notice was issued, employees were asked not to report to work the following day, rendering the notice cosmetic and denying meaningful consultation
The court held that Section 40's notice provisions are mandatory and embody an implicit requirement of consultation, as adopted from the Kenya Airways decision. Notice is meant to enable employees to avert or mitigate terminations and seek alternative employment. Telling employees not to return to work the day after the notice defeated the statutory purpose, so the process fell below legal requirements and was unfair.
Existence of a genuine redundancy situation
A genuine redundancy situation existed given the Respondent's financial struggles, so the court would not stand in the way of the redundancy decision itself, only assess its legality
The court relied on its earlier ruling of 19 December 2016 finding it a matter of public notoriety that the Respondent was struggling in business. An employer has a right to declare redundancies where circumstances require, following Kenya Airways v Aviation and Allied Workers Union. The dispute was therefore narrowed to whether the process was lawful, which it was not.
Entitlement to terminal dues and damages
Each Claimant was entitled to notice pay, unpaid salary, severance pay at 20 days per year worked, six months' salary as damages, and a certificate of service
The Respondent had admitted indebtedness for specified benefits in its redundancy notice, which the court adopted. The court found the redundancy unlawful due to non-compliance with Section 40, justifying six months' salary compensation per Claimant, and directed that pending leave days and pension contributions be computed and added.
Legal principles established
#- The notices and notice duration under Section 40(1) of the Employment Act are mandatory and the requirement of consultation is implicit in the Employment Act
- A redundancy notice is not merely informational but must give employees an opportunity to prepare and seek alternatives
- All conditions in Section 40 of the Employment Act must be met for a redundancy to be lawful
Court orders
#- 1.Payment to each Claimant of one month's salary in lieu of notice
- 2.Payment of unpaid salary earned for the months claimed (March to June 2016 as applicable)
- 3.Six months' salary as damages for unlawful/unfair redundancy for each Claimant
- 4.Severance pay at 20 days' salary for each completed year of service for each Claimant
- 5.Issuance of a Certificate of Service to each Claimant
- 6.Liberty to compute any pending leave days and pension contributions to be made part of the judgment as admitted in the redundancy notice
- 7.Respondent to pay costs of the claim and interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (claim for unfair redundancy and terminal dues)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hamisi Mwinyi Nyerere & 18 others v Uchumi Supermarket [2018] KEELRC 1557 (KLR)", Case Analysis (2018). Cause No. 1239 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1557/eng@2018-06-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.