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ELRCPartially AllowedCause No 1149 of 2016· [2020] KEELRC 397 (KLR)

Mercy Wangari Muchiri v Total Kenya Limited [2020] KEELRC 397 (KLR)

Employment and Labour Relations Court of Kenya
9 October 2020
6,724 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that slightly short redundancy notice is a compensable error, not grounds to void the redundancy itself.

What this practically means

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Executive summary

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The Claimant, formerly employed by Caltex/Chevron Kenya and subsequently by Total Kenya Limited after its acquisition of Chevron, was declared redundant effective 30th April 2015 following a reorganisation in which her Administration Manager position was downgraded below management level. She claimed the redundancy breached Sections 5, 40(1)(a)-(c) and 45(1) of the Employment Act, that she was replaced by Pauline Maloba, and sought declarations, reinstatement, re-engagement, a permanent injunction, general damages, costs and interest. The Respondent maintained the redundancy was a legitimate operational measure, that the Claimant was consulted at a meeting of 18th March 2015, offered three options, and elected redundancy, signing and accepting the notification dated 8th April 2015 copied to the District Labour Officer. The court found there was a valid reason for the redundancy and that it was discussed with the Claimant, who accepted the terms and was paid. The Claimant failed to prove breach of the selection criteria, as she did not establish Pauline Maloba's seniority or relative performance, the last-in-first-out criterion applying only between employees of similar grade and performance. However, the notification fell short of the statutory one-month notice by 8 days and did not state the extent of the redundancy, contravening Section 40(1)(a). The court held this defect did not render the termination unfair under Section 45(2), being remediable by compensation. Declarations of discrimination, breach of selection criteria, unfair termination and breach of contract all failed, as did reinstatement, re-engagement and the injunction. The court awarded the Claimant two months' salary in compensation and 50% of the taxed costs.

Key legal issues

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01

Whether there was valid reason to declare the Claimant redundant

Holding

Yes - the reorganisation and downgrading of the position constituted valid reason, discussed with the Claimant who accepted the redundancy terms

Reasoning

The court found the Claimant was aware of the restructuring at the meeting of 18th March 2015 and acknowledged the redundancy letter dated 8th April 2015, reading, understanding and accepting its terms, which were paid. The redundancy letter itself referred to the reorganisation and the downgrade of the administration function to a lower level, confirming that the reasons were communicated and discussed with her.

p. 8
02

Whether the Respondent complied with the selection criteria under Section 40(1)(c)

Holding

Claimant failed to prove non-compliance

Reasoning

The Claimant alleged she was replaced by Pauline Maloba, but did not establish Pauline's seniority or relative performance, nor that she did not take over the role at the diminished, downgraded level. Since the last-in-first-out criterion applies only between employees of similar grade and similar performance, the court could not find a breach of the selection criteria; the Claimant was also clearly told at the meeting that her position would be downgraded out of management.

p. 8
03

Whether the one-month notice to the Claimant and the District Labour Officer complied with Section 40(1)(a) and (b)

Holding

No - notice was short by 8 days and the letter did not state the extent of the redundancy, but the defect was remediable by compensation rather than nullity

Reasoning

The notification of 8th April 2015 preceded termination on 30th April 2015, short of the one-month requirement, and the letter did not state the extent of the redundancy. However, the Claimant had been informed of the intended redundancy on 18th March 2015, accepted and signed the letter and was paid the terms, and only protested 10 months later; hence the defect warranted compensation, not invalidation of the redundancy.

p. 8
04

Whether the termination was unfair under Section 45(1)

Holding

No - the procedural defect did not render the redundancy an unfair termination

Reasoning

Because the short notice was remedied by compensation and the substantive reason was valid and accepted by the Claimant, the prayer for a declaration of unfair termination under Section 45(1) failed, as did consequential remedies of reinstatement and re-engagement.

p. 9

Legal principles established

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  • Section 40(1)(a) of the Employment Act requires that notification of intended redundancy to the employee and labour officer state the reasons for and extent of the redundancy not less than one month prior to the date of termination
  • Failure to give the full statutory one month's notice under Section 40(1)(a) does not automatically invalidate the redundancy or render it an unfair termination under Section 45(2); it is remediable by compensation
  • Redundancy does not require that a position be wiped out; downgrading a position without changing the title may render its holder redundant
  • The last in first out (seniority in time) selection criterion applies only where the comparison is between persons of a similar grade with similar performance

Court orders

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  1. 1.Declaration that the notification of intended redundancy dated 8th April 2015 did not comply with the law, the notice having been short by 8 days
  2. 2.Award of two months' salary to the Claimant in compensation for non-strict compliance with the notice requirements
  3. 3.Award of 50% of the taxed costs to the Claimant

Authorities

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Legislation

  • Employment Act (Chapter 226)Section 2 (definition of redundancy)
  • Employment Act (Chapter 226)Section 5
  • Employment Act (Chapter 226)Section 40(1)(a)-(g)
  • Employment Act (Chapter 226)Section 45(1) and (2)
  • Employment Act (Chapter 226)Section 47
  • Employment Act (Chapter 226)Section 49
  • Employment Act (Chapter 226)Section 50
  • Employment Act (Chapter 226)Section 77
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Section 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (11)

  • Angela Shiukuru Ilondanga v Airtel Networks Kenya Limited
    (2018) eKLR
  • KUDHEIHA v The Aga Khan University Hospital Nairobi, Cause No. 815 of 2015 (as cited in Bernard Misawo Obora v Coca Cola Juices Kenya Limited)
    (2015) eKLR (Bernard Misawo Obora)
  • Addah Adhiambo Obiro v Ard Inc
    (2014) eKLR
  • Gerrishom Mukhutsi Obayo v DSV Air and Sea Limited
    (2018) eKLR
  • Margaret Mumbi Mwago v Intrahealth International
    (2017) eKLR
  • Faiza Mayabi v First Community Bank Limited
    (2019) eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    (2014) eKLR
  • Thomas De La Rue (K) Limited v David Opondo Umutelema
    (2013) eKLR
  • Aoraki Corporations Limited v Collin Keith McGavin
    CA 2 of 1997 (1998) 2 NZLR 278
  • G. N. Hale & Son Ltd v Wellington Caretakers IUW
  • Kenya Airways Corporation Ltd v Tobias Oganya Auma & others
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution (employment and labour relations dispute)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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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, "Mercy Wangari Muchiri v Total Kenya Limited [2020] KEELRC 397 (KLR)", Case Analysis (2020). Cause No 1149 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/397/eng@2020-10-09

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