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ELRCDismissedNot stated in the judgment· [2023] KEELRC 130 (KLR)

Muthuri & 3 others v Kibet & 3 others (All sued in their Capacities as the officials of Automobile Association of Kenya) (Cause E029 of 2021) [2023] KEELRC 130 (KLR)

Employment and Labour Relations Court
26 January 2023
2,951 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld an employer's redundancy because it followed every legal step — proof that correct procedure and paper trails win employment cases.

What this practically means

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Executive summary

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Four former employees of the respondent association sued alleging that their termination on 15th November 2018, ostensibly on account of redundancy, was unfair and unlawful contrary to Articles 41 and 47 of the Constitution and Sections 40, 41, 43 and 45 of the Employment Act. They sought a declaration of unlawful redundancy, compensatory damages of 12 months' salary under Section 49 or reinstatement, plus costs and interest. The respondent admitted employing them between 1986 and 1999 but explained that the 1st-3rd claimants exited following a 2017-2018 job evaluation and organisational restructuring which rendered their positions superfluous or redefined them to require skills the claimants lacked, while the 4th claimant retired at age 60 on 31st July 2018. The court framed three issues: the legality of the redundancy, the status of the 4th claimant's exit, and entitlement to reliefs. Applying Sections 40, 43, 45 and 47(5) of the Employment Act and endorsing Mwaura J's holding in KUDHEIHA v The Nairobi Hospital that positions, not employees, become redundant, the court found the respondent proved a valid reason and full compliance with the mandatory procedure in Section 40 - notices to staff, the union and the labour officer over a month in advance, individual consultations, payment of one month's salary in lieu of notice and 22 days' severance per completed year. The 4th claimant's retirement before the redundancies was proved and unrebutted. The claimants, having accepted their terminal dues and proved no further entitlement, failed. The suit was dismissed with costs.

Key legal issues

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01

Validity of the reason for the redundancy

Holding

The respondent proved a genuine redundancy situation arising from organisational review and job evaluation approved by the Governing Council in 2018

Reasoning

The respondent carried out an organisational review and job evaluation through consultants, producing a new structure approved by the Governing Council. A skills audit showed the 1st-3rd claimants lacked the skills required for redefined roles, and attempts at alternative placement failed. This established a valid reason based on operational requirements under Sections 43 and 45 of the Employment Act.

p. 5
02

Compliance with the procedural requirements of Section 40 of the Employment Act

Holding

The respondent complied with Section 40 by notifying staff, the union and the labour officer over a month in advance, applying selection criteria based on superfluous roles and skills, consulting, and paying notice pay and 22 days' severance per completed year

Reasoning

Notices dated 12th October 2018 were served on all staff, the union's Secretary General and the area Labour Officer, setting out reasons, terminal dues and selection criteria. Individual consultations, training and payment of one month's salary in lieu of notice and 22 days' severance per completed year of service were proved, exceeding the statutory minimum of 15 days.

p. 6
03

Whether the 4th claimant was made redundant

Holding

No - he exited on normal retirement at age 60 on 31st July 2018, before the redundancy notices of 12th October 2018, and produced no evidence to the contrary

Reasoning

The respondent produced a retirement notice letter dated 2nd July 2018 effective 31st July 2018 and a clearance form. The 4th claimant adduced no evidence to substantiate the allegation that he was laid off with the other claimants, so his claim failed on the evidence.

p. 6
04

Whether the claimants proved entitlement to further dues

Holding

No - the claimants accepted and received their terminal dues and adduced no evidence (e.g. bank statements) that payments were not made or further dues were owing

Reasoning

The claimants did not prove non-payment of terminal dues by bank statements or otherwise. The 2nd claimant's protest on accrued leave days was not supported by evidence, so the court could not find he was entitled to the 174 leave days he claimed.

p. 7

Legal principles established

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  • Managerial prerogative to restructure and make positions (not employees) redundant is protected so long as employees' rights are not sacrificed
  • An employer bears the burden under Sections 43 and 47(5) of the Employment Act to prove a valid reason and fair procedure for redundancy

Court orders

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  1. 1.The suit is dismissed with costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 41 and 47
  • Employment Act, 2007Sections 40, 41, 43, 45, 47(5), 49
  • Labour Relations ActSection 62(5)
  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)

Cases cited (2)

  • Kenya Airways Limited v Aviation & Allied Workers Union of Kenya & 3 Others
    (2014) eKLR
  • KUDHEIHA v The Nairobi Hospital
    (2022) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claims under Sections 40, 41, 43, 45 and 49 and Articles 41 and 47 of the Constitution)

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, "Muthuri & 3 others v Kibet & 3 others (All sued in their Capacities as the officials of Automobile Association of Kenya) (Cause E029 of 2021) [2023] KEELRC 130 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/130/eng@2023-01-26

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