Ibrahim Haji Ali v Gulf African Bank (K) Limited & another [2020] KEELRC 1152 (KLR)
The bottom line
#A Kenyan court ruled that notifying the Labour Officer a month before redundancy is mandatory, and late notice costs employers one month's salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy was lawful and fair under Section 40 of the Employment Act
The redundancy was procedurally flawed because notice to the Labour Officer was issued on 7th September 2015, seven days after the redundancy took effect, contrary to the one-month prior notification requirement
Section 40(1)(b) requires an employer to notify the employee (or union) and the Labour Officer at least one month before redundancy. The respondent's letter to the Labour Officer was dated 7th September 2015 while the redundancy took effect on 1st September 2015. The notice to the Labour Officer is meant to elicit advice and acts as a control measure against unlawful termination clothed as redundancy. Compliance was therefore partial only.
Whether the 2nd Respondent, the Board Chairman, was properly enjoined
The 2nd Respondent was improperly joined as he is an agent of the 1st Respondent with no personal liability attributed to him and no basis to lift the corporate veil
Relying on the Salomon principle of separate corporate legal personality as applied in Joseph Kobia Nguthari and Victor Mabachi, the court held that an agent of a company is distinct from it unless factors warranting piercing the veil exist. The claimant attributed no specific wrongdoing to the 2nd Respondent, so the claim against him was discharged.
Whether the claimant was discriminated against
The claim for discrimination failed for want of proof; being the sole employee affected was satisfactorily explained by the abolition of his one-man department
The claimant alleged witch-hunt and discrimination because he alone was declared redundant and was excluded from bonuses and salary increments. The court found he led no evidence of discrimination; the respondent explained the redundancy by the scrapping of his department, and RW1 explained the bonus exclusion by underperformance and the discretionary nature of increments.
What remedies flow from the procedural flaw in the redundancy
One month's salary (Kshs.340,000) awarded to cover the one-month delay in notifying the Labour Officer; other heads of relief refused
The court found the claimant had already been paid his contractual notice pay, accrued salary, severance and leave dues. Anticipatory salaries to retirement would be unjust enrichment, and discrimination damages failed on proof. The only loss established was the one-month non-compliance with the Labour Officer notification requirement.
Legal principles established
#- Under Section 40 of the Employment Act the employer must notify the employee and the Labour Officer at least one month before redundancy takes effect; notice served after redundancy has taken effect is non-compliant
- A company's directors, agents or officers cannot be personally liable unless there are factors warranting lifting of the corporate veil
- Employment remedies must be proportionate to the economic injury suffered and are not aimed at unjust enrichment
Court orders
#- 1.Award of Kshs.340,000 being one month's salary to cover the one month's delay in notifying the Labour Officer of the intended redundancy
- 2.Claim against the 2nd Respondent dismissed; 2nd Respondent discharged from the proceedings
- 3.Claim for damages for discrimination dismissed
- 4.Claim for compensation for early retrenchment (anticipatory salaries) dismissed
- 5.Claimant awarded costs of the suit
- 6.Interest at court rates from the date of judgment until payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (no constitutional or statutory article expressly invoked for jurisdiction)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Rop v Unilever Kenya Limited (Cause 1568 of 2017) [2023] KEELRC 1342 (KLR)[2023] KEELRC 1342 (KLR)18 May 2023distinguished
- Walter Edwin Ogara Odhiambo v SGS Kenya Limited [2020] KEELRC 361 (KLR)[2020] KEELRC 361 (KLR)16 Oct 2020
Cite this brief
#Cite this brief
Caselaw, "Ibrahim Haji Ali v Gulf African Bank (K) Limited & another [2020] KEELRC 1152 (KLR)", Case Analysis (2020). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1152/eng@2020-05-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.