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ELRCPartially AllowedCause No. 91 of 2018· [2019] KEELRC 1356 (KLR)

Desmond Mukolwe v Ecart Services Kenya Limited [2019] KEELRC 1356 (KLR)

Employment and Labour Relations Court
12 June 2019
HWHellen S. Wasilwa
4,073 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled that even a genuine business restructuring must follow strict notice and consultation rules, awarding an employee Sh2.2 million for unfair redundancy.

What this practically means

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Executive summary

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The Claimant, formerly Head of Human Resource at the Respondent (trading as Jumia Kenya), claimed that his employment was terminated through a purported redundancy that was procedurally flawed and discriminatory. He alleged he was redeployed in an acting capacity as HR Business Partner (Recruiting & Development) without confirmation, that his position was abolished on 9 June 2017, and that his position was subsequently filled by another person on 12 July 2017. He sought declarations of unfair termination and unlawful discrimination, 12 months' salary as compensation, one month's notice pay, interest, and general and punitive damages. The Respondent maintained that the redundancy arose from a genuine restructuring, that notices were issued including to the labour office, and that the Claimant declined an interview for an alternative position. The court framed three issues: validity of the reasons for redundancy, procedural fairness, and remedies. It held the Respondent had a valid reason to restructure and merge departments, an employer's prerogative it would not disturb. However, on procedure, it found there was no one month's notice or prior consultation as required by Section 40 of the Employment Act: the redundancy letter was served on 12 June 2017, the day the redundancy took effect, and the labour office notification postdated it. The redundancy was therefore unfair. The court awarded the Claimant 9 months' salary (Kshs. 1,980,000) as compensation plus one month's notice pay (Kshs. 220,000), totalling Kshs. 2,200,000 less statutory deductions, with costs and interest. The claim was thus partially allowed; the discrimination declarations and punitive damages were not granted.

Key legal issues

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01

Whether there were valid reasons to declare the Claimant redundant

Holding

Yes - the Respondent's restructuring and merger of departments constituted a valid reason for the redundancy

Reasoning

The court declined to probe deeply into the redundancy situation because an employer has a prerogative to restructure. The Respondent had merged HR functions into three departments. Interviews for a Business Partner position were carried out and the Claimant was invited but opted not to attend. Relying on the Kenya Airways decision, the court held it is not the role of any tribunal to prevent an employer from restructuring so long as relevant regulations are observed. It found the Respondent had valid reason to carry out the redundancy and merge the departments.

p. 4
02

Whether due process was followed before the Claimant was declared redundant

Holding

No - the redundancy was procedurally unfair as the mandatory notice and consultation requirements of Section 40 were not complied with

Reasoning

The redundancy letter was dated 9.5.2017 but referred to a discussion allegedly held on 9.6.2017, which the Claimant denied took place, and it took effect immediately. The burden was on the Respondent to prove prior discussion; there was no evidence of any communication to the Claimant save for the letter served on 12.6.2017, the day he was declared redundant. Even the notification to the Ministry of Labour was dated 29.6.2017, after the redundancy had taken effect. This breached Section 40(1)(b) requiring one month's written notice to the employee and the labour officer, and consultation is an imperative requirement under our law per Maraga JA in Kenya Airways.

p. 5
03

What remedies to grant

Holding

Compensation of 9 months' salary plus one month's notice pay, costs and interest

Reasoning

Having found the redundancy procedurally unfair, the court exercised its discretion under Section 49 of the Employment Act to award 9 months' salary as compensation (Kshs. 1,980,000) and one month's salary as notice pay (Kshs. 220,000), totalling Kshs. 2,200,000 less statutory deductions. The Respondent was also to pay costs of the suit plus interest at court rates from the date of judgment. The court did not grant the declarations or damages on discrimination sought.

p. 5

Legal principles established

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  • An employer has the prerogative to restructure its operations, and a court will not lightly interfere with a bona fide redundancy arising from restructuring
  • An employer declaring redundancy must comply strictly with the notice and consultation requirements of Section 40 of the Employment Act, including one month's written notice to the employee and the labour officer before the redundancy takes effect
  • The onus of proving that prior discussion or consultation occurred before a redundancy lies on the employer asserting it

Court orders

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  1. 1.Respondent to pay the Claimant 9 months' salary as compensation for unfair redundancy (Kshs. 1,980,000)
  2. 2.Respondent to pay the Claimant one month's salary as notice pay (Kshs. 220,000)
  3. 3.Total award of Kshs. 2,200,000 less statutory deductions
  4. 4.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment

Authorities

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Legislation

  • Employment ActSection 40(1)(c)
  • Employment ActSection 10(5)
  • Employment ActSection 2 (definition of redundancy)
  • Employment ActSection 40(1)(b)
  • Employment ActSection 40 (full text quoted: 40(1)(a)-(g))
  • Employment ActSection 5(2)
  • Employment ActSection 5(3)(b)
  • Employment ActSection 49(1)
  • Constitution of Kenya 2010Article 27
  • Constitution of Kenya 2010Article 41
  • Employment & Labour Relations Court ActSection 12(4)
  • Labour Relations ActSection 62(4)

Cases cited (12)

  • Naima Khamis –v- Oxford University Press (E.A) Ltd
    [2017] eKLR
  • Kenya Airways Limited –v- Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Barclays Bank of Kenya Ltd & another –v- Gladys Muthoni & 20 others
    [2018] eKLR
  • Thomas De La Rue (K) Ltd vs. David Opondo Omutelema
    [2013] eKLR
  • Agnes Ongadi –v- Kenya Electricity Transmission Company Ltd
    [2016] eKLR
  • Kenya Tea Growers Association –v- Kenya Plantation & Agricultural Workers Union
    [2018] eKLR
  • VMK –v- C U EA
    [2013] eKLR
  • Ol Pejeta Ranching Limited –v- David Wanjau Muhoro
    [2017] eKLR
  • Henry Ochido –v- NGO Co-ordination Board
    Nairobi ELRC Petition No. 41 of 2015
  • Mugford v. Midland Bank
    UK Employment Appeal Tribunal
  • Williams v. Compare Maxam Ltd
    null
  • Cammish v. Parliamentary Service
    null
Jurisdiction invoked
Employment and Labour Relations Court Act, Section 12 (employment and labour relations dispute, Employment Act 2007

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, "Desmond Mukolwe v Ecart Services Kenya Limited [2019] KEELRC 1356 (KLR)", Case Analysis (2019). Cause No. 91 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1356/eng@2019-06-12

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