James Kinene Muraguri v Raffia Bags (East Africa) Limited [2020] KEELRC 686 (KLR)
The bottom line
#Kenya's Employment Court ruled the redundancy unlawful because the employer skipped proper notice and consultation, awarding the employee over Kshs. 1 million.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the redundancy
The termination was procedurally unfair because the Respondent failed to issue the statutory redundancy notice beyond the individual termination letter, and the notices under Section 40(1) require consultation.
Section 40 of the Employment Act sets out conditions for redundancy including notice to the employee, union and Labour Officer. The Court of Appeal has held that two separate notices of not less than one month each are required. The only notice availed was the termination letter dated 1st February 2016. The Respondent's assertion of discussions with the Claimant carried no particulars and was given nil probative value. The notices carry an imperative for consultation.
Substantive justification of the redundancy
The redundancy was not substantively justified; the Respondent failed to dispel the Claimant's accusation that the redundancy was coloured by giving tangible evidence of a genuine operational requirement.
The Claimant was the only Night Shift Manager, Production, and the Respondent failed to explain what happened to the functions of that position. It was not enough to cite restructuring and increased overhead costs. The Certificate of Service described the Claimant as hardworking, obedient and reliable, so a good reason for losing him ought to have been shown. The employer must prove the reasons for redundancy are valid and fair.
Remedies for unfair termination
The Claimant was awarded eight months' salary in compensation plus statutory severance at fifteen days' pay per completed year, accrued leave and fuel allowance.
In awarding compensation the Court considered the Claimant's length of service and the Respondent's conduct in executing the redundancy. Because no written contract existed, the Employment Act terms apply, entitling the Claimant to severance at fifteen days' pay per completed year of service. Leave pay and fuel allowance were admitted and payable.
Legal principles established
#- In every redundancy situation, two separate and distinct notices of not less than a month each are required - a general notice and an individual termination notice.
- The notices under Section 40(1) of the Employment Act carry an imperative for consultation.
- An employer invoking redundancy must prove that the reasons for the redundancy are valid and fair.
Court orders
#- 1.Judgment entered in favour of the Claimant for 8 months' salary in compensation of Kshs. 791,768.00
- 2.4 years' severance pay (16.03.12 to 29.02.16) of Kshs. 228,394.61
- 3.3 days accrued leave of Kshs. 12,371.37
- 4.Fuel allowance (12/2015, 01/2016, 02/2016) of Kshs. 15,000.00
- 5.Total award of Kshs. 1,047,533.98 with interest at court rates from the date of judgment until payment in full
- 6.Claimant awarded costs of the case
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment dispute under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Kinene Muraguri v Raffia Bags (East Africa) Limited [2020] KEELRC 686 (KLR)", Case Analysis (2020). Statement of Claim dated 17th May 2016, filed 7th June 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/686/eng@2020-05-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.