Njeru v Nampak Kenya Limited (Employment and Labour Relations Cause 501 of 2019) [2023] KEELRC 2434 (KLR)
The bottom line
#Kenya's Employment Court upheld a senior executive's redundancy, ruling the employer genuinely restructured and paid above-contractual severance.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination on account of redundancy was unfair and/or unlawful
The termination was lawful: the respondent had a valid reason based on operational requirements and complied with section 40 of the Employment Act
The respondent proved heavy losses from 2016 and a genuine restructuring that abolished the claimant's role, downgrading finance to manager level. Although formal notice to the labour office reached it after the claimant's termination letter, the claimant was consulted throughout, knew of the impending redundancy, applied for voluntary early retirement, and was not discriminated against as other roles were also abolished. The court held the statutory requirements were substantially met and the claimant was not unlawfully terminated.
Whether the claimant was entitled to additional severance pay at 23 days per year
Not entitled; the contract provided 21 days per year and the payout already enhanced this to 23 days
The claimant sought severance at 23 days per year over 18 years, claiming Kshs 3,061,196 was owed. The court found the contractual entitlement under clause 15 was 21 days per completed year of service, and that the amount actually paid (Kshs 24,490,917) already reflected an enhancement to 23 days, so the claimant was well compensated and the claim for more severance was unmerited.
Whether the claimant was entitled to two months' pay in lieu of notice
The prayer was unmerited; the claimant served two months' notice and was paid one month's wages in lieu
Relying on Cargill Kenya Limited v Mwaka and Africa Nazarene University v David Mutevu, the court held section 40(1)(f) relates to payment in lieu of notice, not a second termination notice. The claimant received his letter on 1st March 2019 and worked until 30th April 2019, effectively serving two months' notice, and was paid one month's wages in lieu for the month he was released early.
Legal principles established
#- A fair and lawful termination must be both procedurally fair and substantively justified under sections 40(1) and 45(2) of the Employment Act
- An employer must prove the redundancy selection criteria under section 40(1)(c) was objectively, uniformly and fairly applied
- Section 40(1)(f) concerns payment in lieu of notice, not a separate second notice of termination before redundancy
- Where the employer genuinely believes a redundancy situation exists, the court has no supervisory role to substitute its own business judgment on commercial necessity
Court orders
#- 1.The claimant's claim is dismissed
- 2.The claim for two months' salary in lieu of notice is unmerited and refused
- 3.The claim for compensation for unlawful termination is refused as the termination was lawful
- 4.Each party to meet the costs of their own suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act over employment claims under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njeru v Nampak Kenya Limited (Employment and Labour Relations Cause 501 of 2019) [2023] KEELRC 2434 (KLR)", Case Analysis (2023). Not stated in the judgment (memorandum of claim dated 8th July 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2434/eng@2023-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.