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ELRCPartially AllowedCause No. 175 of 2015· [2019] KEELRC 2371 (KLR)

Francis Kalamba Nzung’u v Pollmans Tours & another [2019] KEELRC 2371 (KLR)

Employment and Labour Relations Court
7 February 2019
HWHellen S. Wasilwa
2,849 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 genuine redundancy lawful, but the employer paid six months' salary for failing to consult the employee before termination.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 1st October 1993 as Customer Service Representative and later promoted to Customer Service Coordinator, was declared redundant with effect from 31st December 2014 following a restructuring occasioned by declining tourism business. He claimed the redundancy was unfair and unlawful, seeking reinstatement or re-engagement, declarations of breach of Section 40 of the Employment Act and various constitutional articles, maximum compensation, and general, aggravated and exemplary damages. The Respondent maintained the redundancy was justified by the collapse of tourism following travel advisories and the Ebola outbreak, that it followed Section 40 procedure, and that it paid the Claimant his dues. The court framed three issues: whether a genuine redundancy situation existed, whether Section 40 was complied with, and whether the Claimant was entitled to remedies. It found a genuine redundancy existed, which the Claimant admitted, relying on Court of Appeal authority that an employer is entitled to declare redundancies. However, it found no evidence of consultation with the Claimant before termination, contrary to the requirement of consultation implicit in Section 40(1) as explained by the Court of Appeal in the Kenya Airways case. The court held this lack of consultation was not a grave violation, noting the Claimant received one month's notice and was paid leave dues and redundancy dues. It awarded six months' salary as compensation, computed at Kshs. 98,152 per month, totalling Kshs. 588,912, plus costs and interest at court rates from the date of judgment. The claims for reinstatement and the other declaratory and damages reliefs were not granted.

Key legal issues

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01

Existence of a genuine redundancy situation

Holding

A genuine redundancy existed based on the economic downturn following travel advisories and the Ebola outbreak, which the Claimant admitted

Reasoning

The Respondent's business was affected by travel advisories issued against Kenya and the Ebola outbreak in West Africa, leading to diminished tourist numbers and a restructuring that merged the Customer Service and Reservation departments. The Claimant admitted the downturn, so the court accepted that a real redundancy situation existed.

p. 3
02

Compliance with Section 40 of the Employment Act

Holding

The Respondent complied with the notice requirements but breached the requirement of consultation before declaring the Claimant redundant

Reasoning

The Claimant was given one month's notice in accordance with Section 40. However, there was no evidence of consultation with the Claimant before termination. Relying on the Court of Appeal decision in Kenya Airways Ltd v Aviation & Allied Workers Union, the court held consultation is implicit in Section 40(1) and an imperative requirement under Kenyan law.

p. 4
03

Remedies for procedural breach of redundancy process

Holding

Six months' salary as compensation awarded for lack of consultation, which the court deemed not a grave violation

Reasoning

Having found the redundancy genuine and that notice and dues (leave, notice pay) were paid, the only procedural lapse was absence of consultation. The court exercised discretion to award six months' salary at the Claimant's consolidated salary of Kshs. 98,152 as fair compensation rather than the maximum.

p. 4

Legal principles established

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  • Consultation is an imperative requirement before termination on account of redundancy under Section 40 of the Employment Act
  • An employer has the right to declare redundancies where circumstances requiring them have arisen, and the court will not substitute its own view for a properly exercised business discretion

Court orders

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  1. 1.Respondent to pay the Claimant compensation of six months' salary amounting to Kshs. 588,912
  2. 2.Respondent to pay costs of the suit plus interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment ActSection 40(1)(a)-(g)
  • Constitution of Kenya, 2010Articles 2, 10, 20, 26, 27, 28, 41, 43, 47 and 50
  • Labour Relations ActSection 62(4)

Cases cited (6)

  • Chalicha Farmers' Co-operative Society Limited v George Odhiambo & 9 Others
    [1987] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Africa Nazarene University v David Mutevu & 103 others
    [2017] eKLR
  • Tobias Ongaya Auma & 5 Others vs. Kenya Airways
    null
  • GN Hale & Son Limited vs Wellington Caterers
    null
  • Mugford v. Midland Bank
    UK Employment Appeal Tribunal
Jurisdiction invoked
Article 162(2) of the Constitution (jurisdiction of the Employment and Labour Relations Court) - the judgment does not expressly cite the provision

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, "Francis Kalamba Nzung’u v Pollmans Tours & another [2019] KEELRC 2371 (KLR)", Case Analysis (2019). Cause No. 175 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2371/eng@2019-02-07

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