Hassan Abdallah Muhati v A To Z Transporters Limited [2020] KEELRC 651 (KLR)
The bottom line
#Kenya's Employment Court confirmed an employer can lawfully declare redundancy if it follows Section 40: proper notices to union and labour officer, plus full payment of dues.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination of the Claimant's employment on account of redundancy was lawful and fair
Yes - the Respondent complied with Section 40 of the Employment Act: it notified the Union and the County Labour Officer more than a month before termination, notified the Claimant, gave reasons and extent of the redundancy, and paid notice pay, accrued leave and severance pay.
The court set out the statutory definition of redundancy and the conditions in Section 40, grouping them into notices, selection criteria and payment of dues. Evidence showed the redundancy notice issued to the Labour Officer and Union on 18th November 2016, the termination letter of 17th December 2016, payment of one month's notice pay and full accrued statutory dues including severance. The Claimant admitted being paid Kshs. 47,408. Accordingly no fault was found in the execution of the redundancy.
Whether the Claimant is entitled to the remedies sought
No - having found the termination lawful, the claims for notice pay, service pay, underpayment and compensation all fail.
Because notice pay and statutory dues had been paid under Section 40 and the redundancy was properly executed, the heads of claim - notice pay, service pay, underpayment and 12 months' compensation - lacked foundation. The Claimant's admission of receipt of Kshs. 47,408 and the proof of payment of dues dispositive of the monetary claims. The court found no basis for service pay and underpayment claims and disallowed the entire claim with no order as to costs.
Legal principles established
#- An employer may lawfully terminate on account of redundancy where the conditions in Section 40 of the Employment Act are met, including notification of the union and labour officer not less than one month before termination, and payment of notice pay, accrued leave and severance pay.
Court orders
#- 1.The Claimant's entire claim is disallowed
- 2.Each party to bear their own costs
- Jurisdiction invoked
- First-instance jurisdiction of the Employment and Labour Relations Court over employment and labour relations disputes; the judgment does not cite a specific jurisdictional provision.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hassan Abdallah Muhati v A To Z Transporters Limited [2020] KEELRC 651 (KLR)", Case Analysis (2020). ELRC Cause No. 60 of 2018 (Memorandum of Claim dated 13th February 2018, amended 4th April 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/651/eng@2020-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.