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ELRCPartially AllowedCause No. 73 of 2018 (lead file, consolidated causes)· [2020] KEELRC 727 (KLR)

Rosilinda Okanda Oluoch, Macylne Kerubo Mikuro, Julia Njeri Wanjuki, Damaris Katanu Muli, Joyce Wanjiku Njenga, Maureen Mwikali Maema, Monika Wanjiku Irungu, Linet Khasiala Shikoli, Mercy Mwikali Wambua, Peris Wanjiku Kibandi, Monica Wanjiku Ngugi, Daniel Amwayi Eshiwani, Annastacia Syobua Kanuna, Faith Mwende Munyoki, Mary Mumbua Musyoki, Stella Karimi Kinyua, Dinah Kwamboka Omariba, Joyce Wairimu Njeri, Bridget Ngula Mbindyo, Beatrice Wairimu Kamande, Mary Mbatha James, Fridah Kerubo Okirigiti, Angellah Mwende Kikuvi, Evans Magani Indasio, Lucy Njeri Kamau, Florence Mueni Nzau, Veronica Kyalo, Angelina Mueni Muthami, Fenney Kwamboka Miruka, Grace Mumbua Kioko, Ann Wanjiku Kuria, Rose Kamene Musau, Metrine Namalwa Muila, Jaminah Kalekye Muia, Mary Kalondu Musyimi, Leah Mmbone Kivambo, Faith Karimi, Catherine Gacheri Kubania & Phelly Awuor Ambongo v Style Industries Limited (Cause 73 & 37 – 39 of 2018) (Employment and Labour) [2020] KEELRC 727 (KLR)

Employment and Labour Relations Court
3 July 2020
2,625 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled 39 workers were unfairly declared redundant because their employer skipped legally required notices, awarding each three months' salary.

What this practically means

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Executive summary

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Thirty-nine claimants sued Style Industries Limited alleging unfair and irregular termination of their employment on account of redundancy, with terminations effected between 31st May and 31st July 2017. They sought reinstatement, general damages, costs and interests. The causes were consolidated in January 2019 with Cause No. 73 of 2018 as the lead file. The Respondent asserted that economic recession justified the redundancy, that employees were informed at a May 2017 meeting, issued redundancy notices, and paid terminal benefits as full and final settlement. Rosalinda Okanda Oluoch testified for the Claimants; the Respondent's Head of Industrial Relations, Daniel Ongoya, conceded in cross-examination that the Respondent filed no documents proving reduced sales or the alleged May 2017 meeting. The court framed three issues: compliance with Section 40(1) of the Employment Act, whether the termination was unfair, and entitlement to reliefs. Applying Josphat Ulenje Mando v ARM Cement and the Court of Appeal decisions in Thomas De La Rue and Kenya Airways, the court held that two distinct notices are required in redundancy and found the Respondent had issued only termination notices, without a section 40(1)(b) redundancy notice or notification of the labour office. Section 40's conditions being mandatory, the terminations were substantively and procedurally unfair under Section 45. Reinstatement was refused for lack of exceptional circumstances. The court awarded each claimant three months' salary as compensation, ordered the Respondent to pay the Claimants' costs, with interest accruing from the date of judgment. The judgment was delivered virtually at Nairobi on 3rd July 2020 in line with COVID-19 directions.

Key legal issues

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01

Compliance with Section 40(1) of the Employment Act

Holding

The Respondent failed to comply with any of the conditions in Section 40(1); it issued only termination notices, gave no redundancy notice under section 40(1)(b), and the redundancies were therefore unfair terminations under Section 45

Reasoning

The court, guided by the Josphat Ulenje Mando decision, found the Respondent did not notify the Claimants of the redundancy before issuing termination notices. The notices received were termination notices only. RW1 admitted no documents were filed proving reduced sales or the alleged May 2017 meeting. Since the Section 40 conditions are conjunctive and mandatory, non-compliance rendered the terminations substantively and procedurally unfair.

p. 4
02

Whether the redundancy was justified and the burden of proof

Holding

The Respondent failed to discharge its burden of proving the operational difficulties and reduced sales it alleged as reasons for the redundancy

Reasoning

RW1 conceded in cross-examination that the Respondent had not filed any documents to prove a reduction in sales between May and July 2017 and had no records proving the alleged May 2017 meeting. Following Barclays Bank v Gladys Muthoni, bare assertions without documentary proof cannot establish service or justification. Without proof of the economic grounds, the Respondent could not justify the redundancies under section 43(2).

p. 3
03

Remedies for unfair termination on account of redundancy

Holding

Reinstatement refused for want of exceptional circumstances; each claimant awarded three months' salary as compensation, plus costs and interest from judgment

Reasoning

Having found the redundancy unprocedural and therefore unfair under Section 45, the court declined reinstatement because the Claimants did not show exceptional circumstances. In exercise of discretion, the court awarded each claimant three months' salary as compensation, less than the twelve months sought, and ordered the Respondent to pay costs with interest accruing from the date of judgment.

p. 5

Legal principles established

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  • Compliance with all conditions in Section 40 of the Employment Act is mandatory for a lawful redundancy; failure renders the termination an unfair termination under Section 45
  • Two separate and distinct notices are required in redundancy: a redundancy notice to all affected employees and an individual termination notice

Court orders

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  1. 1.Each claimant awarded three (3) months' salary as compensation for unfair termination
  2. 2.Respondent to pay the claimants' costs
  3. 3.Interest to accrue from the date of judgment

Authorities

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Legislation

  • Employment ActSection 40(1)(b)
  • Employment ActSection 40(1)(f)
  • Employment ActSection 40
  • Employment ActSection 43(2)
  • Employment ActSection 45
  • Employment ActSection 49(1)(c)
  • Constitution of KenyaArticle 41
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • ILO Convention No. 158 - Termination of Employment Convention, 1982 and Recommendation No. 166Article 13 of Recommendation No. 166
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (8)

  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
    [2018] eKLR
  • Cammish v Parliamentary Service
    (1996) 1 ERNZ 404
  • Angela Shiukuru Ilondanga v Airtel Networks Kenya Limited
    [2018] eKLR
  • Banking Insurance and Finance Union (Kenya) v Kirinyaga District Co-Operative Union Ltd & Another
    [2014] eKLR
  • Gerrishom Obayo v Dsv Air and Sea Ltd
    Cause No. 2104 of 2017
  • Josphat Ulenje Mando v ARM Cement (Formerly Known as Athi River Mining Ltd)
    [2018] eKLR
  • Thomas De La Rue v David Opondo Omutelema
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination of employment claims (Employment Act; Article 41 of the Constitution invoked by the Claimants)

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, "Rosilinda Okanda Oluoch, Macylne Kerubo Mikuro, Julia Njeri Wanjuki, Damaris Katanu Muli, Joyce Wanjiku Njenga, Maureen Mwikali Maema, Monika Wanjiku Irungu, Linet Khasiala Shikoli, Mercy Mwikali Wambua, Peris Wanjiku Kibandi, Monica Wanjiku Ngugi, Daniel Amwayi Eshiwani, Annastacia Syobua Kanuna, Faith Mwende Munyoki, Mary Mumbua Musyoki, Stella Karimi Kinyua, Dinah Kwamboka Omariba, Joyce Wairimu Njeri, Bridget Ngula Mbindyo, Beatrice Wairimu Kamande, Mary Mbatha James, Fridah Kerubo Okirigiti, Angellah Mwende Kikuvi, Evans Magani Indasio, Lucy Njeri Kamau, Florence Mueni Nzau, Veronica Kyalo, Angelina Mueni Muthami, Fenney Kwamboka Miruka, Grace Mumbua Kioko, Ann Wanjiku Kuria, Rose Kamene Musau, Metrine Namalwa Muila, Jaminah Kalekye Muia, Mary Kalondu Musyimi, Leah Mmbone Kivambo, Faith Karimi, Catherine Gacheri Kubania & Phelly Awuor Ambongo v Style Industries Limited (Cause 73 & 37 – 39 of 2018)  (Employment and Labour) [2020] KEELRC 727 (KLR)", Case Analysis (2020). Cause No. 73 of 2018 (lead file, consolidated causes). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/727/eng@2020-07-03

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