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ELRCPartially AllowedNot stated in the judgment· [2023] KEELRC 3070 (KLR)

Michira v Insteel Limited (Cause 514 of 2019) [2023] KEELRC 3070 (KLR)

Employment and Labour Relations Court
30 November 2023
LNLinnet Ndolo
1,915 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed that skipping the redundancy notice and consultation steps in Section 40 makes a redundancy dismissal unlawful, costing the employer Kshs. 593,016.

What this practically means

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Executive summary

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The Claimant was employed by the Respondent in August 2014 as a Sales Representative, later earning Kshs. 98,836 monthly. She was transferred several times, ultimately to the Exports Department in July 2018, and shortly thereafter was informed the Department would close. On 20th December 2018 she received a notice terminating her employment on account of redundancy effective 18th January 2019, giving one month's notice. She sued, contending there was no genuine redundancy, no consultation and no proper notice, and that her transfers were contrived to force her out. She sought twelve months' salary in compensation, house allowance, a certificate of service and costs. The Respondent admitted the redundancy but maintained that a genuine redundancy existed and that the statutory procedure was followed. The court framed two issues: whether the termination was lawful and fair, and whether the Claimant was entitled to the remedies sought. Relying on settled authority that the Section 40 Employment Act conditions are conjunctive and mandatory, and that a redundancy notice is separate from a termination notice and that consultation is implied, the court found no evidence of a redundancy notice, consultation or a clear selection criterion. It held the termination unlawful and unfair and awarded six months' salary, Kshs. 593,016, with interest from judgment. The house allowance claim was abandoned at trial. The Claimant was granted a certificate of service and costs of the case.

Key legal issues

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01

Whether the termination of the Claimant's employment on account of redundancy was lawful and fair

Holding

The termination was unlawful and unfair because there was no redundancy notice to the employee and labour officer, no consultation, and the selection criterion was not established

Reasoning

Section 40 of the Employment Act imposes conjunctive and mandatory conditions. The notice of intention to declare redundancy is separate from the termination notice, and consultation is implied in the section to ensure substantive fairness. The Respondent produced no evidence of a redundancy notice or consultation and did not establish the selection criterion, breaching Section 40 and rendering the termination unfair.

p. 5
02

Whether the Claimant was entitled to the remedies sought

Holding

Six months' salary in compensation, interest, a certificate of service and costs were awarded; the house allowance claim having been abandoned was not awarded

Reasoning

Compensation was calibrated at six months' salary considering the Claimant's length of service (roughly four years) and the Respondent's failure to follow the Section 40 procedure. The house allowance claim was abandoned at trial. The Claimant received a certificate of service, interest and costs.

p. 5

Legal principles established

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  • All conditions under Section 40 of the Employment Act are conjunctive and mandatory; failure to issue a redundancy notice and consult renders a termination unlawful and unfair

Court orders

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  1. 1.Six months' salary in compensation awarded; judgment entered in favour of the Claimant in the sum of Kshs. 593,016 for unlawful and unfair termination of employment
  2. 2.Interest at court rates from the date of judgment until payment in full
  3. 3.Certificate of service to be issued to the Claimant
  4. 4.Costs of the case awarded to the Claimant
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Section 40 redundancy dispute)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Michira v Insteel Limited (Cause 514 of 2019) [2023] KEELRC 3070 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3070/eng@2023-11-30

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