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ELRCPartially AllowedCause No 1234 of 2015· [2019] KEELRC 647 (KLR)

Vella Njeri Kimathi v Ericsson Kenya Limited [2019] KEELRC 647 (KLR)

Employment and Labour Relations Court of Kenya
11 October 2019
RSRadido Stephen
1,965 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled that moving a job abroad is not, by itself, a valid reason to declare redundancy and terminate an employee.

What this practically means

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Executive summary

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Vella Njeri Kimathi sued Ericsson Kenya Ltd alleging unfair termination of employment, breach of contract and discrimination on account of pregnancy. The Respondent maintained that the termination on 1 July 2014 arose from a lawful redundancy following restructuring in which the Claimant's role of Strategy Execution Manager was relocated to South Africa. The Court found substantial procedural compliance with section 40 of the Employment Act, 2007, including notice to the Labour Office, notice to the employee, disclosure of selection criteria and payment of severance. However, on substantive fairness, the Respondent failed to discharge its burden under sections 43 and 45 to prove valid and fair reasons: the role was not superfluous but merely moved, and no explanation was given why the Claimant, an excellent performer, was not transferred to South Africa where she had previously been deployed. The Court held that mere transfer of a role to another country, without more, cannot justify redundancy in a globalised employment context. The three discrimination grounds failed: sick leave was overtaken by childbirth, the alleged harassment was not proved to the required standard, and no comparator mother was identified for the 6-month maternity leave claim. The gym allowance and accrued leave claims were overtaken by payment, and the unpleaded claim for Kshs 5,000,000/- for loss of earnings and related heads was declined as unpleaded special damages. The Court declared the termination unfair and awarded the equivalent of 4 months' gross salary, Kshs 1,214,960/-, plus costs to the Claimant. Judgment delivered in Nairobi on 11 October 2019.

Key legal issues

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01

Procedural fairness in redundancy under section 40 of the Employment Act

Holding

The Respondent was in substantial compliance with the statutory conditions on retrenchment, including notice to the Labour Office, notice to the employee, selection criteria and payment of severance pay

Reasoning

The Respondent notified the Labour Office on 12 June 2014, issued the Claimant a letter dated 12 June 2014 referencing proposed restructuring and potential retrenchments, indicated the position would be advertised and relocated, disclosed the selection criteria and that only one employee was likely to be affected, and paid severance pay. The Court therefore found substantial compliance with section 40.

p. 2
02

Substantive fairness of redundancy under sections 43 and 45

Holding

Termination was unfair; the Respondent failed to prove valid and fair reasons for the redundancy or that it was in accord with justice and equity

Reasoning

The role of Strategy Execution Manager was not superfluous but merely relocated to South Africa. The Respondent did not suggest the Claimant lacked qualifications, did not explain why she was not transferred to South Africa where she had previously been deployed, and did not place before the Court facts showing the restructuring was necessary. The burden under sections 43 and 45 was not discharged.

p. 2
03

Discrimination on account of pregnancy

Holding

The Claimant failed to prove discrimination on account of pregnancy on any of the three grounds alleged

Reasoning

On maternity leave, the Court agreed that sick leave was extinguished by childbirth so maternity leave could be deemed to commence on the date of birth. On harassment, the Claimant did not disprove the evidence that she was allowed to work from home. On the 6-month maternity leave request, she disclosed no particulars of any comparator mother with a normal birth granted the option.

p. 4
04

Remedies for unfair termination

Holding

Compensation equivalent of 4 months' gross salary awarded, considering length of service of about 5 years and terminal/statutory dues already paid

Reasoning

In exercise of discretion under section 49 of the Employment Act framework, the Court considered the roughly 5 years of service and the fact that other terminal and statutory dues had been paid, holding 4 months' gross salary appropriate. Gross pay for August 2014 was Kshs 303,740/-, yielding Kshs 1,214,960/-. The unpleaded claim for Kshs 5,000,000/- was declined.

p. 4

Legal principles established

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  • An employer must prove valid and fair operational reasons for retrenchment under sections 43 and 45 of the Employment Act, 2007, and managerial prerogative is exercised subject to that burden
  • The mere relocation of a role to a different country, without more, is not a valid and fair reason to declare a redundancy in a globalised employment context
  • Sick leave is overtaken by events upon childbirth, and maternity leave may be deemed to commence on the date of birth

Court orders

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  1. 1.Declaration that the Claimant failed to prove discrimination on account of pregnancy
  2. 2.Declaration that the termination of employment was unfair and was not in accord with justice and equity
  3. 3.Award to the Claimant of compensation equivalent to 4 months' gross salary of Kshs 1,214,960/-
  4. 4.Claimant to have costs of the Cause

Authorities

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Legislation

  • Employment Act, 2007section 40
  • Employment Act, 2007section 40(1)(b)
  • Employment Act, 2007section 40(1)(c)
  • Employment Act, 2007sections 43 and 45
  • Employment Act, 2007section 45(4)(b)
  • Employment Act, 2007section 5(3)
  • Constitution of Kenya, 2010Article 27
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007 (unfair termination, discrimination and breach of contract claims)

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, "Vella Njeri Kimathi v Ericsson Kenya Limited [2019] KEELRC 647 (KLR)", Case Analysis (2019). Cause No 1234 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/647/eng@2019-10-11

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