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ELRCPartially AllowedCause No. 154 of 2017 (memorandum of claim dated 7th March 2017, amended 14th August 2020)· [2022] KEELRC 1294 (KLR)

Ooko v Northern Rangelands Company Limited (Cause 462 of 2017) [2022] KEELRC 1294 (KLR)

Employment and Labour Relations Court
9 May 2022
OKOcharo Kebira
8,732 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, employed as Chief Operating Officer of the Respondent from 8th April 2015 under a five-year fixed-term contract, was terminated on grounds of redundancy by letter dated 16th December 2016 following a restructuring approved by the Respondent's Board in August 2016. He alleged the redundancy was procedurally and substantively unfair, a sham staged to create a position for a white expatriate, Mr. Robert McNeil, and violated his constitutional rights under Articles 27 and 41. The court framed five issues. On procedure, it held that section 40 of the Employment Act is mandatory: the Respondent issued neither of the two statutory notices and did not consult the Claimant, so the termination was procedurally unfair. On substance, comparing the old and new COO roles, the court found no marked difference, noted the absence of academic requirements in the advertisement, and found the new hire's qualifications inferior; it concluded the restructuring was conceived to employ McNeil, rendering the termination substantively unfair. The racial discrimination claim under Article 27 failed for want of sufficient comparative evidence, but the conduct was held to amount to an unfair labour practice under Article 41. Remedies were granted in part: compensation of ten months' gross salary (Kshs. 6,317,050) under section 49(1)(c) with interest from filing; the unexpired-term claim and separate constitutional damages were refused. Judgment was entered accordingly with costs to the Claimant, delivered virtually at Nairobi on 9th May 2022.

Key legal issues

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01

Procedural fairness of the redundancy

Holding

The termination was procedurally unfair because the Respondent complied with none of the mandatory requirements of section 40 - no notice to the Labour Officer or employees and no consultation

Reasoning

The employer bore the burden under sections 43 and 45(2)(c) to prove both reason and fair procedure. The Respondent's submissions ignored procedural fairness entirely. The court found no notices under section 40 were issued and that mere awareness of the restructuring could not substitute for consultation; the Claimant's salary-cut offer came after the decision had been made and was not consultation.

p. 11
02

Substantive fairness / genuineness of the redundancy

Holding

The redundancy was not a genuine operational requirement but was conceived to employ Mr. McNeil; the termination was substantively unfair

Reasoning

Comparing the old and new COO roles, the court found no marked difference. The advertisement set no academic qualifications, and McNeil's highest qualification (Honours degree) fell below the Master's degree required for the old role. The Respondent's witness was in communication with McNeil before the position was advertised, supporting the inference that the restructure was designed with a particular hire in mind.

p. 15
03

Alleged racial discrimination under Article 27

Holding

The discrimination claim failed for want of sufficient comparative evidence

Reasoning

The Claimant's evidence compared himself to other Kenyan employees who did not testify, making the evidence remote. He did not make an elaborate comparison between himself and McNeil on the aspects of alleged discrimination, and the Respondent's evidence on differential salary treatment dislodged his assertions.

p. 15
04

Violation of Article 41 (fair labour practices)

Holding

The Respondent's conduct amounted to an unfair labour practice

Reasoning

Having found the restructuring conceived with one end in mind - to bring McNeil into employment without caring about the prejudice to the Claimant - the court applied its definition of 'unfair' as arbitrary or capricious conduct based on insubstantial reasons and concluded the conduct breached Article 41(1).

p. 16
05

Entitlement to remedies

Holding

Claimant awarded 10 months' gross salary as compensatory relief under section 49(1)(c); unexpired-term and separate constitutional damages claims refused

Reasoning

The court exercised its discretion under section 49(1)(c) considering the unfair process, the 39 months remaining on the fixed-term contract, the Claimant's non-contribution to the termination and the unfair labour practice. Unexpired-term compensation is not awardable, and constitutional damages were subsumed in the compensatory award.

p. 16

Legal principles established

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  • Section 40 of the Employment Act is mandatory and adherence to it is not left to the election of the employer
  • A redundancy requires two distinct notices of not less than one month each: a general notice to employees and the Labour Officer, and an individual termination notice
  • An employer's awareness of a redundancy situation does not amount to consultation with the affected employee
  • Compensation for the unexpired period of a contract of employment is not awardable

Court orders

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  1. 1.A declaration that the termination of the Claimant's employment was unfair
  2. 2.Compensation pursuant to section 49(1)(c) of the Employment Act, 10 months' gross salary, Kshs. 6,317,050
  3. 3.Interest on the compensation at court rates from the date of filing suit till full payment
  4. 4.Costs of the suit to the Claimant

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 27
  • Constitution of Kenya, 2010Article 41(1)
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Employment Act, 2007Section 2 (definition of redundancy)
  • Employment Act, 2007Section 5(6)
  • Employment Act, 2007Section 40(1)
  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 49(1)(c)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (12)

  • Hesbon Ngaruiya Waigi -v- Equitorial Commercial Bank Limited
    [2013] eKLR
  • Thomas De La Rue -v- David Opondo Omutelelema
    [2013] eKLR
  • Kenya Airways Limited -v- Aviation & Allied Workers Union of Kenya & 3 others
    [2014] eKLR
  • Agnes Ongadi versus Kenya Electricity Transmission Company Limited
    [2016] eKLR
  • Janine Buss -v- Gems Cambridge International School Limited
    [2016] eKLR
  • R. vs. The Hon. Chief Justice of Kenya & others
  • Peterson Guto Ondieki -v- Kisii University
    [2020] eKLR
  • Francis Maina Kamau vs. Lee Construction
    [2014] eKLR
  • Aviation and Allied Workers Union vs. Kenya Airways
    [2012] eKLR
  • BWD Knitting Mills [Pty] vs. SACTWU
    [2001] 7 BLLR 705 [LAC]
  • Gabriel Kariuki Chomba vs. Top Image
    [2014] eKLR
  • Alfred Yambo Oyie vs. Fatima Mission Hospital
Jurisdiction invoked
Article 162(2) of the Constitution of Kenya 2010 establishing the Employment and Labour Relations Court; Employment and Labour Relations Court Act

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, "Ooko v Northern Rangelands Company Limited (Cause 462 of 2017) [2022] KEELRC 1294 (KLR)", Case Analysis (2022). Cause No. 154 of 2017 (memorandum of claim dated 7th March 2017, amended 14th August 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1294/eng@2022-05-09

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