Diana Wambui Irungu & 2 others v Nestle Kenya Limited [2020] KEELRC 1039 (KLR)
The bottom line
#Kenya's Employment Court upheld Nestlé Kenya's 2015 redundancy, ruling that proper notices to employees and the labour officer satisfied the Employment Act.
What this practically means
#Executive summary
#Key legal issues
#Validity of the reason for redundancy
The reason for redundancy was valid, being business deterioration and restructuring, as evidenced by KPMG audited financial statements showing losses
RW1 testified the Respondent's performance was poor. The Respondent produced KPMG independent auditors' reports for 2010, 2011, 2012 and 2014 showing losses. The court therefore found the reason for the intended redundancy was valid and was communicated in the 15th January 2015 letter. The Claimants' argument that no evidence of reduced business was produced did not prevail against the audited accounts.
Compliance with Section 40(1)(b) notification requirements
The notices to the Claimants and the Labour Officer complied with Section 40(1)(b) as they were issued at least a month before the effective date
The Labour Officer was notified on 8th January 2015 and the Claimants received letters on 15th January 2015, with redundancy effective 15th February 2015. Relying on Thomas De La Rue (K) Limited v David Opondo Omutelema, the court held that for non-union members, written notice to the employee and the labour officer a month in advance suffices.
Racial discrimination in selection criteria
The Claimants failed to prove racial discrimination; the affected positions were abolished and the expatriate peers held different roles
CW1 alleged a white colleague with less experience was retained, but the dairy restructuring criteria showed she held a different position from Philippe. CW2's role was Project Engineer, abolished, with no expatriates in that role. CW3's DC Coordinator position was abolished. None of the claimants applied for the vacant positions available.
Selection criteria and consultations
The Respondent did not apply LIFO or skills/reliability criteria under Section 40(1), but the redundancy overall complied with the law
The court found the Respondent's focus was on roles rather than individual skills, reliability or LIFO against remaining roles. However, consultations were held with each claimant, who admitted meeting HR to discuss packages, and the Respondent considered the claimants' skills against vacant positions which they declined to apply for. The court nonetheless concluded the exercise was lawful.
Legal principles established
#- Under Section 40(1)(b) of the Employment Act, an employer must notify the non-unionised employee personally in writing and the labour officer at least one month before the effective redundancy date
- LIFO is not the sole mandatory selection criterion in redundancy; the employer must apply the criteria under section 40(1)(c) with due regard to seniority, skill, ability and reliability
Court orders
#- 1.The entire claims of the three claimants are dismissed
- 2.No orders as to costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Article 162(2) Constitution, though not expressly quoted; causes brought under Sections 40, 45, 46, 47(5) and 51 of the Employment Act and Article 27(5) of the Constitution)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Diana Wambui Irungu & 2 others v Nestle Kenya Limited [2020] KEELRC 1039 (KLR)", Case Analysis (2020). Cause 185 of 2015 (consolidating Causes 185, 186 and 187 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1039/eng@2020-05-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.