Michael Juma Chinjo & 116 others v Diamond Industries Ltd [2020] KEELRC 1889 (KLR)
The bottom line
#Kenya's Employment Court ruled Diamond Industries' redundancy was a disguise for firing striking workers, ordering tiered compensation of one to three months' salary.
What this practically means
#Executive summary
#Key legal issues
#Whether there was a genuine redundancy situation
There was no genuine redundancy; the declaration was a colourable exercise to rid the employer of striking employees.
The Respondent pleaded financial constraints caused by cheap smuggled goods but produced no financial records or wage bill evidence. The return-to-work formula allowed terminated workers to reapply, and the Respondent advertised the very positions held by the Claimants, showing work was still available. Redundancy was invoked to counter illegal strikes rather than for demonstrable economic reasons, rendering the termination a colourable exercise and lacking substantive justification under Sections 43 and 45 of the Employment Act.
Whether the redundancy procedure was fair
Procedure would have been fair had the termination been genuinely based on redundancy.
Notices of redundancy issued to the Claimants' Union, the Federation of Kenya Employers and the County Labour Office, and the Labour Office advised compliance with redundancy law. Basic redundancy dues under Section 40 of the Employment Act were computed, scrutinised by the Labour Office, and paid. The court therefore found the procedural requirements were met, and unfairness arose solely from the absence of substantive justification.
Whether termination was unfair and what remedy applies
Termination was unfair under Sections 43 and 45 of the Employment Act; compensation awarded on a tiered basis.
Having failed completely on substantive justification, the termination was unfair. In assessing compensation, the court considered that most Claimants had long service from as early as 2007, but were not model employees, having engaged in wildcat strikes and disregarded the industrial relations machinery, and had already received terminal benefits including severance and notice pay. Tiered compensation of one to three months' salary was granted based on year of engagement.
Legal principles established
#- An employer invoking redundancy must demonstrate a genuine redundancy situation; using redundancy as a guise to shed employees for other reasons is a colourable exercise and not a valid termination.
- Under Section 43 of the Employment Act, the employer bears the burden of proving the reasons for termination, which must be supported by evidence such as financial records where economic reasons are pleaded.
Court orders
#- 1.The Respondent shall pay compensation for unfair termination based on last monthly salaries: Employees engaged before or between 2007 and 2011 – 3 months' salary; Employees engaged between 2012 and 2014 – 2 months' salary; Employees engaged in 2015 – 1 month salary
- 2.Certificates of Service to issue
- 3.No order on costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations claims (Employment Act 2007; Labour Relations Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Michael Juma Chinjo & 116 others v Diamond Industries Ltd [2020] KEELRC 1889 (KLR)", Case Analysis (2020). Cause No. 451 of 2016 (consolidated Claims). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1889/eng@2020-01-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.