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ELRCPartially AllowedCause No 70 of 2018· [2023] KEELRC 1990 (KLR)

Mwanje v A to Z Transporters Ltd (Cause 70 of 2018) [2023] KEELRC 1990 (KLR)

Employment and Labour Relations Court
27 July 2023
2,894 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Mombasa court ruled a transport company's redundancy was unfair because it skipped mandatory notice steps and had no proof of financial hardship.

What this practically means

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Executive summary

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The Claimant, employed as a mechanic on 1/5/2005 at ksh. 26,676 per month, was terminated on 17/12/2016 without a termination letter or hearing. He claimed one month's notice pay, service pay, maximum compensation for unfair termination and a certificate of service. The Respondent admitted the employment but asserted the termination was a lawful redundancy under Section 40 of the Employment Act, having notified the union and labour officer and paid ksh. 30,748 in dues; it also sought a stay citing a related union suit. At trial, the Respondent's witness (RW-1, the former Managing Director) conceded that the redundancy notice did not identify the affected employees, their posts or selection criteria, that there was no proof of service on the County Labour Officer, no evidence of the Claimant's refusal to receive documents, no evidence the mechanic post was abolished, and no audited accounts supporting the claimed inability to sustain the wage bill. The notice, served on the union on 21/11/2016 for a 17/12/2016 effective date, fell short of the mandatory one-month notice. The court held the termination procedurally and substantively unfair, relying on Walter Ogal Anuro v TSC. Judgment was entered for the Claimant for ksh. 240,084 (one month's notice pay of ksh. 26,676 plus eight months' compensation of ksh. 213,408), with costs, interest at court rates, and a certificate of service within thirty days. Service pay was disallowed as the Claimant was an NSSF contributor under Section 35.

Key legal issues

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01

Procedural fairness of the redundancy

Holding

The redundancy notice failed to name or identify the affected employees, their posts or selection criteria, was not shown to have been served on the County Labour Officer, and was served on the union only about a month and fell short of the mandatory notice period; no consultation with the Claimant was shown

Reasoning

Section 40(1)(a)-(c) requires notification of reasons and extent of redundancy to the union and labour officer not less than one month prior, and selection with due regard to seniority, skill, ability and reliability. The notice of 18/11/2016 did not identify the employees, posts or criteria; service on the union was on 21/11/2016 for redundancy effective 17/12/2016, short of the mandatory period; the labour officer's service was not proved; and the Claimant was never consulted.

p. 5
02

Substantive justification for the redundancy

Holding

The Respondent failed to prove the alleged reason (inability to sustain the wage bill); no audited accounts were produced and no evidence that the Claimant's mechanic post was abolished

Reasoning

A termination must rest on a valid and proved reason. RW-1 admitted he had no documents showing the company had closed and no evidence that the mechanic post had been abolished. No audited statements of account were produced to demonstrate inability to meet the wage bill, so the asserted reason for redundancy was not substantively justified.

p. 6
03

Reliefs

Holding

Claimant awarded eight months' salary compensation (ksh. 213,408), one month's notice pay (ksh. 26,676), a certificate of service, costs and interest; service pay disallowed due to NSSF membership

Reasoning

Having found procedural and substantive unfairness, the court exercised discretion under the Employment Act to award compensation equivalent to eight months' salary at the admitted wage of ksh. 26,676, plus notice pay. Service pay was barred by Section 35 because the Claimant contributed to NSSF. A certificate of service is mandatory under Section 51(1).

p. 6

Legal principles established

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  • A valid redundancy must comply strictly with the mandatory conditions in Section 40(1) of the Employment Act, including one month's prior notice to the union and labour officer and due regard to seniority, skill, ability and reliability in selection
  • Fairness of termination requires both substantive justification (valid reason) and procedural fairness

Court orders

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  1. 1.Judgment entered for the Claimant against the Respondent for one month salary in lieu of notice of ksh. 26,676
  2. 2.Compensation for unfair termination of employment of ksh. 213,408 (equivalent of eight months' salary), totaling ksh. 240,084
  3. 3.The Claimant is awarded costs of the suit and interest at Court rates
  4. 4.The Respondent shall issue the Claimant with a certificate of service within thirty days of the judgment

Authorities

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Legislation

  • Employment ActSections 18(1) & (5), 35, 35(1)(c), 40, 40(1)(a)-(g), 41, 43, 45, 49, 50, 51(1)
  • Constitution of KenyaArticle 2(6)
  • ILO Convention No. 158 (Termination of Employment Convention)

Cases cited (3)

  • Walter Ogal Anuor-vs- Teachers Service Commission
    [2013] eKLR
  • Julie Topirian Njeru vs Kenya Tourist Board
    Industrial Court Cause No. 886 of 2010
  • Irene Naserian Kabolo -v-s Kenya Aids NGOs Consortium
    Industrial Court Cause No. 1937 of 2011 [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (first-instance memorandum of 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, "Mwanje v A to Z Transporters Ltd (Cause 70 of 2018) [2023] KEELRC 1990 (KLR)", Case Analysis (2023). Cause No 70 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1990/eng@2023-07-27

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