Regency Slots Limited v Njahira (Employment and Labour Relations Appeal E010 of 2021) [2023] KEELRC 2250 (KLR)
The bottom line
#Kenya's Employment Court confirmed that employers must give employees one month's notice and prove genuine reasons before redundancy, or pay for unfair termination.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy was procedurally fair under section 40 of the Employment Act
The termination letter was not preceded by any notice of intended redundancy to the Respondent, who was therefore not given the one month's notice required by section 40(1)(b); the termination was procedurally unfair.
The letter dated 2nd July 2019 terminated employment with immediate effect and was not preceded by any notice of intended redundancy. The notice of 1st June 2019 was addressed only to the Labour Officer and did not mention the number or names of affected employees. Relying on Thomas De La Rue, the Court held the Respondent was entitled to one month's notice, and on Kenya Airways and German School Society that consultation is implicit and mandatory under section 40 read with Article 47 of the Constitution.
Whether there were valid and fair reasons for the redundancy
The Appellant failed to discharge its burden under section 43 to prove substantive justification, having made only general assertions about financial constraints and having no selection criteria, while a new storekeeper had been recruited around the time of the termination.
The employer bore the legal burden under sections 43 and 45(2) to justify the termination. Its evidence consisted of general statements, which cannot discharge a legal burden. No criteria for selecting the Respondent were tendered, and the Appellant's witness confirmed a new storekeeper had just been recruited and that the Respondent's functions continued to be discharged. Substantive justification was therefore absent.
Whether the award of overtime pay was merited
The award was upheld because the Appellant, as custodian of the records, led no evidence to rebut the Respondent's evidence on un compensated public holiday work.
Payslips only began showing an overtime/special allowance item long after the Respondent's employment commenced. Once the Respondent testified that she was not compensated for overtime, the evidential burden shifted to the Appellant to demonstrate that she did not work overtime or was paid for it; the Appellant adduced no such evidence.
Whether costs should have been awarded to the Respondent despite partial success
Costs follow the event; a partially successful party is entitled to costs only to the extent of success.
The Court found no merit in the Appellant's complaint about costs, holding that where a party succeeds partially, the court has discretion to award costs, but such costs are computed only on the awarded sums under the Advocate's Remuneration Order.
Legal principles established
#- Termination of employment on account of redundancy must be both substantively justified and procedurally fair.
- An employee who is not a member of a union is entitled to the same one month's notice under section 40(1)(b) of the Employment Act as a union member.
- The evidential burden may shift to an employer who is the custodian of employment records and who fails to rebut an employee's evidence on overtime.
Court orders
#- 1.The appeal is dismissed with costs
- 2.Orders accordingly (judgment of the trial Magistrate upheld)
- On appeal from
- Milimani Commercial Magistrate's Court
- CMEL No 1369 of 2019
- Jurisdiction invoked
- First appeal to the Employment and Labour Relations Court under the Employment Act and the Employment & Labour Relations Court (Procedure) Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Regency Slots Limited v Njahira (Employment and Labour Relations Appeal E010 of 2021) [2023] KEELRC 2250 (KLR)", Case Analysis (2023). ELRC Appeal from Milimani Commercial Magistrate's Court CMEL No 1369 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2250/eng@2023-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.