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ELRCPartially AllowedCause No. 491 of 2016· [2020] KEELRC 449 (KLR)

Karen Karagania Njuguna v Longhorn Publishers Kenya [2020] KEELRC 449 (KLR)

Employment and Labour Relations Court of Kenya
16 September 2020
2,095 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 an employee's 'redundancy' was fake because her job was refilled within a month, awarding her nine months' salary as compensation.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from 28th February 1995 and rising to the position of Personnel and Administration Manager, sued over the termination of her employment on 3rd April 2013 on account of redundancy, earning Kshs. 218,968/- monthly at separation. She claimed the redundancy was a sham: her position was merely renamed Chief Human Resource Officer, recruitment for it commenced within a month of her declared redundancy, and the alleged merger of her functions with the Finance department never occurred. She sought reinstatement, maximum compensation, general damages for unlawful redundancy, and costs. The Respondent admitted the engagement but maintained the redundancy complied with Section 40 of the Employment Act, 2007, and that all terminal dues were paid. The court framed two issues: whether a genuine redundancy situation existed, and whether due process was followed. On the first, the court found the Respondent had not demonstrated a redundancy situation, as the duties of the new post were the same as those the Claimant had performed and the post was refilled shortly after her exit; the termination was therefore substantively unjustified. On the second, the court found Section 40 procedure was properly followed, the Claimant having received notice acknowledged by the Labour Officer and her dues. The claim succeeded in part: the court awarded compensation of nine months' salary less statutory deductions, with costs and interest, but did not grant reinstatement or separate general damages. Two authorities were cited by each side but none was expressly adopted by the court.

Key legal issues

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01

Whether there was a genuine redundancy situation

Holding

There was no redundancy situation; the position was not genuinely abolished but refilled, rendering the termination unjustified

Reasoning

The court compared the Claimant's letter of appointment and job description with the advertisement for the post of Chief Human Resource Officer, which was advertised within a month of the redundancy. The Respondent did not deny that the duties of the new post were similar to those the Claimant performed. The alleged merger with the Finance department was unsupported, as the new holder's duties remained Human Resource in nature and both positions reported to the Managing Director. Under Section 2 of the Employment Act, redundancy requires that an employee's services be superfluous; refilling the same post negates this.

p. 3
02

Whether due process was followed in the redundancy

Holding

The procedural requirements of Section 40 of the Employment Act, 2007 were followed and the process was procedurally proper

Reasoning

The Claimant conceded on cross-examination that she received a redundancy notice duly acknowledged by the Labour Officer, that the notice took effect from 4/5/2013 with reasons clearly indicated, and that she was paid her terminal dues of Kshs.1,291,047.50/- and issued a Certificate of Service. The court therefore found the Section 40 procedure compliant. The failure was substantive only - the absence of a valid reason - which grounded the award of compensation rather than a finding of procedural unfairness.

p. 4
03

What remedies flow from the substantively unfair termination

Holding

Compensation equivalent to 9 months' salary was reasonable, plus costs and interest

Reasoning

Having found the termination flawed for lack of valid reasons, the court exercised its discretion to award compensation for 9 months' salary. It noted the Claimant had already been paid her redundancy dues and that procedure was proper, so compensation was the appropriate remedy. The Respondent was also ordered to pay costs of the suit plus interest at court rates from the date of judgment.

p. 4

Legal principles established

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  • A real redundancy situation requires a valid and genuine reason, and where an employer declares a position redundant but then employs someone else to fill the same post, no redundancy exists
  • An employee may succeed on compensation for unfair termination on account of redundancy where no valid reason existed, even though the procedural requirements of Section 40 of the Employment Act were complied with

Court orders

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  1. 1.Award of compensation to the Claimant of 9 months' salary (9 x 377,955 = 4,401,595/= less statutory deductions)
  2. 2.Respondent to pay costs of the suit
  3. 3.Interest on costs at Court rates with effect from the date of the judgement

Authorities

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Legislation

  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 2 (definition of redundancy)
  • Employment Act, 2007Section 49(4)
  • Constitution of Kenya, 2010Article 41
  • Employment and Labour Relations Court Act, 2011Section 12(4)

Cases cited (3)

  • Wilson Githu Rutinu Vs Orpower 4 Inc Limited
    (2020) eKLR
  • Kenya Airways Limited Vs Aviation & Allied Workers Union Kenya & 3 Others
    (2014) eKLR
  • Ol Pejeta Ranching Limited Vs David Wanjau Muhoro
    (2017) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act, 2011 and the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Karen Karagania Njuguna v Longhorn Publishers Kenya [2020] KEELRC 449 (KLR)", Case Analysis (2020). Cause No. 491 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/449/eng@2020-09-16

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