Musili & 7 others v Insteel Limited (Cause E670 of 2020) [2023] KEELRC 695 (KLR)
The bottom line
#A Kenyan court ruled that an employer must give written redundancy notice and cannot pay non-unionised staff lower severance than unionised colleagues.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy was procedurally carried out under Section 40 of the Employment Act
The redundancy was unprocedural for want of notification to the employees and Labour Officer and for disparity in redundancy dues tabulation
The Court found the employer failed to prove issuance of the one-month redundancy notice required by Section 40(1)(b). The claimed staff briefing of April 2, 2019 was disputed, its title allegedly superimposed, and proceedings were not recorded. Further, the Claimants' dues were computed at 17 days per year while unionised colleagues received the CBA factor, placing them at a disadvantage contrary to Section 40(1)(d).
Whether non-unionised employees may be paid lower redundancy dues than the CBA factor
No - Section 40(1)(d) prohibits disadvantaging an employee for not being a union member; the CBA factor applies
Although the Claimants were management staff earning higher salaries, the employer had negotiated a CBA fixing the redundancy dues factor and could not withhold this benefit from management employees on the basis of non-union membership, per Section 40(1)(d) of the Employment Act.
Whether a failed voluntary early retirement program can constitute redundancy notice
No legal basis for treating a failed voluntary early retirement programme as a redundancy notice
The Respondent's HR Manager sought to rely on a voluntary early retirement programme as satisfying the notice requirement. The Court found no legal basis for this proposition; the statutory notice under Section 40(1)(b) must be a written notification to the employee and the Labour Officer of reasons for and extent of the redundancy.
Legal principles established
#- An employer executing a redundancy where a CBA fixes the redundancy dues factor cannot deny management/non-unionised employees that benefit for being non-unionised
- Section 40(1)(b) of the Employment Act requires written notice of redundancy to the employee personally and to the Labour Officer, and the employer bears the burden of proving such notice
Court orders
#- 1.Award of one month's salary in compensation to each of the 8 Claimants (336,893; 215,209; 121,433; 96,410; 118,188; 209,562; 91,099; 89,646 respectively)
- 2.Award of balance of severance pay to each Claimant (393,042; 2,367,301; 1,068,611; 629,840; 871,445; 1,229,431; 808,269; 493,053 respectively)
- 3.Interest at court rates on the awards from the date of judgment until payment in full
- 4.Costs of the case to the Claimants
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim; specific enabling provision not cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Musili & 7 others v Insteel Limited (Cause E670 of 2020) [2023] KEELRC 695 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/695/eng@2023-03-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.