Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 482 of 2017· [2022] KEELRC 561 (KLR)

Stephen Anekeya Mumanyi v Travel Associates Limited [2022] KEELRC 561 (KLR)

Employment and Labour Relations Court
10 March 2022
1,959 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled that employers must strictly follow redundancy procedures in Section 40 of the Employment Act, or face paying notice pay, service pay, and legal costs.

What this practically means

#

Executive summary

#
The claimant, employed by the respondent as Tours Manager from October 2004 at a gross salary of approximately Kshs.68,890/=, sued for redundancy, non-payment of terminal benefits, and damages for unlawful and wrongful termination following a termination letter dated 10th January 2017 that cited redundancy due to falling sales and the need to cut operational costs. The respondent denied declaring him redundant, alleging misconduct, warning letters, low performance and gross negligence, and asserting he received full and final settlement of Kshs.70,533/-. The respondent filed no submissions and did not appear at the hearing. The court framed three issues: whether the termination was on account of redundancy, whether Section 40(1) of the Employment Act was adhered to, and entitlement to reliefs. The court found the termination letter expressly cited redundancy, then held there was no evidence of compliance with any of the seven mandatory conditions precedent in Section 40: no one-month notice, no notice to the labour officer, and no discussion of the criteria for selecting the claimant's post. The disciplinary defence failed because it was not cited in the termination letter, no Section 41 hearing was convened, and a positive recommendation letter dated the day of termination contradicted the indiscipline allegations. The termination was declared unlawful and unfair. The court awarded one month's salary in lieu of notice (Kshs.68,980/=) and service pay of Kshs.379,390/=, totalling Kshs.448,370/=, but declined compensation for unlawful termination on the ground that the service pay adequately compensated the claimant. Costs and interest at court rates were awarded to the claimant.

Key legal issues

#
01

Whether the termination was on account of redundancy

Holding

Yes - the termination letter dated 10th January 2017 expressly cited redundancy due to the economic climate and cutting down of operational costs.

Reasoning

The court examined the termination letter and found it addressed redundancy, citing the current economic climate and cutting down on operational costs. This finding anchored the claimant's reliance on Section 40 of the Employment Act and displaced the respondent's assertion that the termination was for low performance and gross negligence.

p. 2
02

Whether the Respondent complied with Section 40(1) of the Employment Act

Holding

No - there was no evidence of compliance with any of the seven conditions precedent in Section 40, making the termination unprocedural and unlawful.

Reasoning

The court listed the seven conditions precedent under Section 40 and found no evidence of notice to the employee one month prior, no notice to the labour officer, no discussion with the claimant on the criteria used to declare his post redundant, and no proof of payment of notice pay or severance. The conditions are mandatory, so non-compliance rendered the termination unfair.

p. 3
03

Whether the respondent's defence of misconduct and indiscipline could sustain the termination

Holding

No - the disciplinary grounds were never cited in the termination letter, no notice to show cause or disciplinary hearing was conducted under Section 41, and the claimant's positive recommendation letter contradicted the claims of indiscipline.

Reasoning

The respondent alleged warning letters and gross negligence, but the court noted the termination letter cited only redundancy. No notice disclosing wrongdoing or inviting the claimant to a disciplinary hearing under Section 41 was issued, and a recommendation letter dated 10th January 2017 describing the claimant as honest and hard-working contradicted the indiscipline allegations.

p. 3

Legal principles established

#
  • The conditions precedent to a lawful redundancy set out in Section 40 of the Employment Act are mandatory and must be strictly complied with by an employer.
  • Where an employer cites redundancy as the reason for termination, it must follow the procedure prescribed in Section 40 of the Employment Act.
  • A termination on redundancy without notice to the employee one month prior, to the labour officer, or any demonstration of the criteria used is unfair and unlawful.

Court orders

#
  1. 1.One month salary in lieu of notice of Kshs.68,980/= awarded to the Claimant
  2. 2.12 years' service pay of Kshs.379,390/= (Kshs.68,980 x 5.5 years) awarded to the Claimant
  3. 3.Compensation for unlawful termination declined as the Claimant was held compensated with service pay under Section 40 of the Employment Act
  4. 4.Costs of the suit awarded to the Claimant with interest at court rates from the date of judgment till full payment

Authorities

#

Legislation

  • Employment ActSection 40 (including 40(1)(b))
  • Employment ActSection 45(1) and (2)
  • Employment ActSection 41
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B

Cases cited (3)

  • Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited
    [2018] eKLR
  • Barclays Bank of Kenya Ltd & another v Gladys Muthoni & 20 others
    [2018] eKLR
  • JANE I. KHALECHI VS OXFORD UNIVERSITY PRESS E. A. LIMITED
    (2013) eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court under the Employment Act and the ELRC Act

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (1)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Stephen Anekeya Mumanyi v Travel Associates Limited [2022] KEELRC 561 (KLR)", Case Analysis (2022). Cause No. 482 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/561/eng@2022-03-10

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