Kenya Engineering Workers Union v Mohan Engineering Works Limited [2022] KEELRC 405 (KLR)
The bottom line
#A Kenyan employer who told workers to 'go home and wait' when business collapsed was held to have made them redundant unfairly, owing notice pay and severance.
What this practically means
#Executive summary
#Key legal issues
#Whether the grievants' separation from employment was a termination or a redundancy
The manner of separation pointed to redundancy rather than an ordinary termination, as employees were terminated at the employer's initiative and through no fault of their own
The witness testified that the Respondent's business premises were locked by the Landlord for non-payment of rent, leading to closure of the factory, and employees were told not to report on duty. The court reasoned that this depicted an employer facing financial difficulties unable to sustain the business, fitting the statutory definition of redundancy under the Employment Act.
Whether the redundancy was procedurally fair
The termination was unfair because none of the steps under Section 40 of the Employment Act were attempted; no notice was given to the grievants or their union
Section 40 requires notification of the union and labour officer not less than a month before redundancy, payment of leave, one month's notice or wages in lieu, and severance pay at not less than fifteen days' pay per completed year of service. The Respondent, having foreseen financial challenges, ought to have properly declared redundancies rather than waiting for events to unfold.
Entitlement to remedies
Grievants awarded one month's salary in lieu of notice and severance pay; salary arrears claim dismissed for lack of proof
Section 40 entitles employees declared redundant to one month's salary in lieu of notice and severance pay. The salary arrears claim failed because the Claimant did not particularise the months owed. Severance pay was computed and awarded for each grievant.
Legal principles established
#- Where an employer's employees are locked out and told to go home and wait, the separation amounts to a declaration of redundancy, requiring compliance with Section 40 of the Employment Act
- Redundancy is a legitimate ground for terminating employment provided there is a valid reason based on operational requirements and a fair procedure is followed
Court orders
#- 1.Payment of one-month salary in lieu of notice at Kshs. 21,317/- for Joshua Oloo, and Kshs. 10,000 for Kevin Oduor
- 2.Severance pay at Kshs. 212,940 for Joshua Oloo and Kshs. 53,760/- for Kevin Oduor
- 3.Half the costs of the suit as the Respondent did not participate in the hearing
- Jurisdiction invoked
- Reference under the Employment Act following a trade dispute and certificate of unresolved issue issued after conciliation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Engineering Workers Union v Mohan Engineering Works Limited [2022] KEELRC 405 (KLR)", Case Analysis (2022). Memorandum of Claim dated 7th October 2020, filed 28th October 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/405/eng@2022-03-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.