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ELRCPartially AllowedNot stated in the judgment as provided· [2021] KEELRC 1087 (KLR)

Kenya Engineering Workers Union v Efil Enterprises Limited [2021] KEELRC 1087 (KLR)

Employment and Labour Relations Court
13 August 2021
MOMAUREEN ONYANGO
3,441 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan employer's COVID-19 redundancies were ruled unfair because it skipped the required one-month notice and union consultation, costing it compensation for six workers.

What this practically means

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Executive summary

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The Claimant, a trade union with a valid recognition agreement with the Respondent, sued on behalf of six Grievants declared redundant on 1st November 2020, alleging lock-out and redundancy without consultation, on grounds of union affiliation, and in breach of Section 40 of the Employment Act and Section 76 of the Labour Relations Act. It sought reinstatement, compliance orders, signature of a CBA and costs. The Respondent denied illegality, asserting the employees were offered unpaid leave or terminal dues due to COVID-19-induced lack of work and opted for redundancy, with the Union and Labour Officer notified. It raised a preliminary objection that the court lacked jurisdiction because the Grievants earned under KShs.80,000 monthly, the claim belonging to the magistrates' court, and that the CBA dispute belonged before the Minister. The court rejected the preliminary objection, holding that Gazette Notice No. 6024 of 2018 expressly excluded trade disputes from magistrates' jurisdiction, and this was a trade dispute between a union and employer. On the merits, the court found the meeting minutes showed no genuine consultation or advance notice; the required one-month notification to the union, employees and labour officer was absent, and no terminal dues tabulation was produced. The redundancy was therefore unprocedural and unfair. Reinstatement was refused because the redundancy stemmed from low work volumes; instead each Grievant received six months' salary compensation, and the Respondent was ordered to pay statutory redundancy benefits, with tabulation to be filed within 30 days for final judgment on quantum.

Key legal issues

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01

Jurisdiction of magistrates' courts vis-à-vis the ELRC over trade disputes

Holding

The preliminary objection fails; the claim is a trade dispute under the Labour Relations Act over which magistrates designated by Gazette Notice No. 6024 of 2018 have no jurisdiction.

Reasoning

The Respondent argued that because the Grievants earned less than KShs.80,000 per month, the claim belonged to the magistrates' court under Gazette Notice No. 6024 of 2018. The court held the Respondent misapprehended the Legal Notice: the carve-out excludes trade disputes under the Labour Relations Act from magistrates' jurisdiction. Since this is a dispute between a trade union and an employer concerning redundancy, it falls within the ELRC's jurisdiction and the preliminary objection was dismissed.

p. 3
02

Compliance with Section 40 of the Employment Act in declaring the Grievants redundant

Holding

The redundancy was unprocedural and therefore unfair; no valid notification of at least one month was given to the Grievants, the Union or the Labour Officer, and no consultation with the union took place.

Reasoning

Section 40(1) mandates that an employer shall not terminate on account of redundancy unless the statutory conditions are met. The minutes show the Managing Director merely summoned employees and addressed them, with no evidence they knew beforehand of the meeting or opted for redundancy. The letters to the Union and Labour Officer were termination notices dated after the meeting, given without the required one-month notice, and no tabulation of terminal dues was produced. Compliance with Section 40(1) was therefore absent and the terminations unfair.

p. 7
03

Whether reinstatement was an appropriate remedy

Holding

Reinstatement was refused; compensation of six months' salary per Grievant was awarded instead, plus statutory redundancy benefits.

Reasoning

The Respondent relied on Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others on the discretionary and exceptional nature of reinstatement. Accepting that the redundancy arose from low volumes of work caused by the COVID-19 pandemic, the court found reinstatement unworkable. Taking into account the manner of termination, the non-payment of any terminal dues, and that the Grievants earned minimum wages, the court awarded each six months' salary and directed tabulation of statutory redundancy benefits under Section 40(1).

p. 7

Legal principles established

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  • Magistrates appointed under Gazette Notice No. 6024 of 2018 have no jurisdiction to hear trade disputes under the Labour Relations Act, 2007; such disputes between a trade union and an employer lie in the Employment and Labour Relations Court.
  • Where employees are union members, redundancy consultations and notification under Section 40(1)(a) of the Employment Act must be with the union and the labour officer, not less than one month before the termination date.

Court orders

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  1. 1.The Respondent's preliminary objection on jurisdiction is dismissed
  2. 2.Each of the six Grievants is awarded six months' salary as compensation for unfair termination
  3. 3.The Respondent shall pay redundancy benefits to the employees as set out in Section 40(1) of the Employment Act
  4. 4.Parties directed to agree on tabulation of the amounts and file it in Court within 30 days; failing agreement, each party to file its own tabulation within 30 days, with a mention date to be given at delivery of judgment for final judgment on the amount payable

Authorities

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Legislation

  • Labour Relations ActSections 2, 74, 76
  • Employment ActSections 2, 40, 49(4)
  • Gazette Notice No. 6024 of 2018Appointment of special magistrates
  • Constitution of KenyaArticles 36, 41, 48, 159(2)(d)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Work Injury Benefits Actoffences (as referenced in the Legal Notice)
  • Labour Institutions Actoffences (as referenced in the Legal Notice)
  • Occupational Safety and Health Actoffences (as referenced in the Legal Notice)

Cases cited (1)

  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution as read with the Labour Relations Act, 2007 (trade dispute jurisdiction of the Employment and Labour Relations Court)

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, "Kenya Engineering Workers Union v Efil Enterprises Limited [2021] KEELRC 1087 (KLR)", Case Analysis (2021). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1087/eng@2021-08-13

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