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ELRCPartially AllowedNot stated on the face of the judgment· [2022] KEELRC 1445 (KLR)

Nyabuto v Radar Limited (Cause 1738 of 2017) [2022] KEELRC 1445 (KLR)

Employment and Labour Relations Court
5 August 2022
3,131 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled an employer's redundancy unlawful because it lacked proof of low business and ignored mandatory procedures, awarding the worker over Kshs 150,000.

What this practically means

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Executive summary

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The claimant, employed by the respondent as a security guard on April 15, 2013, was terminated by letter dated November 22, 2016 on grounds of low business, which he contended amounted to an unlawful and unfair redundancy. He sought salary in lieu of notice, unpaid November 2016 salary, payment in lieu of untaken leave, compensatory damages and service gratuity. The respondent defended the termination as a lawful redundancy under section 40 of the Employment Act, asserting that notice pay and severance were paid. The court framed three issues: justifiable reason, procedural compliance, and entitlement to reliefs. It held that the burden lay on the employer to prove a valid and fair reason based on operational requirements, and that the respondent produced no evidence beyond RW1's testimony to substantiate the claim of low business. On procedure, the court found no written redundancy notice on record, an unitemized global payment of Kshs 38,376.00 with no breakdown, and no selection criteria, RW1 admitting none was applied. Since compliance with section 40(1) is mandatory, the termination was unfair and unlawful. The claimant was awarded compensatory damages of four months' gross salary (Kshs 104,416.00), one month's notice pay (Kshs 26,104.00), severance pay for three years (Kshs 39,156.00) and November 2016 salary (Kshs 9,142.93), totaling Kshs 188,818.93, less the admitted Kshs 38,376.00, yielding a final award of Kshs 150,442.93 with interest and costs. The leave claim was denied.

Key legal issues

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01

Justifiable reason for redundancy

Holding

The respondent failed to prove that business was low and therefore had no justifiable reason to declare the claimant redundant.

Reasoning

Under sections 43(1), 45(2) and 47(5) of the Employment Act the burden lies on the employer to prove a valid and fair reason based on operational requirements. The respondent produced no evidence beyond RW1's testimony to substantiate its assertion of low business, and thus did not discharge that burden.

p. 3
02

Procedural compliance with section 40(1) of the Employment Act

Holding

The respondent failed to prove compliance with the mandatory procedural requirements of section 40(1), rendering the termination unfair and unlawful.

Reasoning

There was no written redundancy notice on record and the global payment of Kshs 38,376.00 was not itemized, so compliance with section 40(1)(b) and (f) could not be established. No selection criteria was produced; RW1 admitted none was applied, breaching section 40(1)(c). Severance pay could not be verified from the unitemized global sum.

p. 5
03

Entitlement to reliefs

Holding

Compensatory damages of four months' gross salary, one month's notice pay, severance pay for three years and salary for days worked in November 2016 were awarded; leave pay was denied and the admitted sum of Kshs 38,376.00 was deducted.

Reasoning

Having found the termination unfair and unlawful, the court assessed compensatory damages considering the length of employment, awarded notice pay and salary for days worked since there was no proof of payment, computed severance at fifteen days' pay per completed year for three years, and offset the admitted payment.

p. 6

Legal principles established

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  • For a termination on redundancy to be lawful it must be both substantively justified and procedurally fair, with the burden of proof on the employer.
  • The conditions in section 40(1) of the Employment Act are mandatory and cannot be selectively applied by an employer.

Court orders

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  1. 1.A declaration that the claimant's termination was unfair and unlawful.
  2. 2.Compensatory damages of Kshs 104,416.00 equivalent to four months' gross salary.
  3. 3.One month's salary in lieu of notice of Kshs 26,104.00.
  4. 4.Severance pay of Kshs 39,156.00 for 3 years.
  5. 5.Kshs 9,142.93 being salary for the days worked in November 2016.
  6. 6.Total award of Kshs 188,818.93 less Kshs 38,376.00, hence final award of Kshs 150,442.93.
  7. 7.Interest on the final award at court rates from the date of judgment till payment in full.
  8. 8.The respondent shall bear the costs of the suit.

Authorities

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Legislation

  • Employment Actsection 40(1)(a)-(g)
  • Employment Actsection 2 (definition of redundancy)
  • Employment Actsection 43(1) and 43(2)
  • Employment Actsection 45(2)(a) and (b)
  • Employment Actsection 47(5)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48

Cases cited (6)

  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    [2014] eKLR
  • Hesbon Ngaruiya Waigi v Equitorial Commercial Bank Limited
    [2013] eKLR
  • Faiza Mayabi v First Community Bank Limited
    [2019] eKLR
  • Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited
    [2018] eKLR
  • John Kisaka Masoni v Nzoia Sugar Co Limited
    (2016) eKLR
  • John Kebaso Mose v Uchumi Supermarkets
    (2017) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim)

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, "Nyabuto v Radar Limited (Cause 1738 of 2017) [2022] KEELRC 1445 (KLR)", Case Analysis (2022). Not stated on the face of the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1445/eng@2022-08-05

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