Obidi v Alpha Fine Foods Limited (Cause 98 of 2018) [2022] KEELRC 4145 (KLR)
The bottom line
#Kenyan employers cannot terminate staff through verbal redundancy announcements; skipping the written notices required by the Employment Act makes the dismissal unfair and costly.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 40 procedural requirements for redundancy
The verbal communication of termination without prior general and individual notices breached section 40(1)(b) and rendered the redundancy unfair and unprocedural
The court found the employer summoned the claimant and verbally terminated him on August 15, 2017 citing reduced work attributable to Nakumatt's financial crisis. No general notice or individual notice under section 40 of the Employment Act was issued. Relying on Thomas De La Rue and Barclays Bank, the court held redundancy notices are mandatory and require good faith; their absence denied the claimant due process, resulting in unfair termination.
Remedies for unfair termination
The claimant was awarded notice pay of one month, six months' compensation under sections 45 and 49, severance pay at 15 days per completed year for 8 years, and leave pay computed on the applicable basic wage
Given the procedural violation, the court found compensation due under sections 45 and 49 and held six months' salary (Ksh 94,800) appropriate. Severance pay under section 40(1)(g) for eight years was uncontested and awarded at Ksh 72,923. Leave for 8 years was undefended with no work records filed, computed on the 2017 basic wage of a driver assistant. The NSSF claim was referred to the Labour Officer.
Unopposed claim and unremitted NSSF dues
The claim was undefended; the NSSF non-remittance issue was referred to the Labour Officer as service pay was not pleaded
The respondent did not enter appearance or file a response, so the claim was unopposed. On the NSSF arrears, the court declined to order direct remittance, instead directing the claimant to the Labour Officer for sanction, holding the pleaded claim was for service pay which was not pleaded before the court.
Legal principles established
#- An employer terminating on account of redundancy must issue both a general notice and an individual notice under section 40 of the Employment Act
- Failure to follow the due process of section 40 renders a termination unfair for lack of substantive justice and procedural fairness
Court orders
#- 1.A declaration that employment terminated unfairly
- 2.Compensation Ksh 94,800
- 3.Severance pay Ksh 72,923
- 4.Notice pay Ksh 15,800
- 5.Leave pay Ksh 11,680
- 6.The Labour Officer shall address the non-payment of statutory dues accordingly
- 7.Costs of the suit to the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court Act, section 12(4) (employment and labour relations dispute, first instance)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Obidi v Alpha Fine Foods Limited (Cause 98 of 2018) [2022] KEELRC 4145 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/4145/eng@2022-07-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.