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ELRCDismissedCause No 328 of 2015· [2024] KEELRC 65 (KLR)

Nyamao v Nestle Equatorial African Region Limited (Cause 328 of 2015) [2024] KEELRC 65 (KLR)

Employment and Labour Relations Court
25 January 2024
MOMaureen Onyango
4,259 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed an employer's redundancy was lawful because Nestle followed section 40 notice, consultation and payment rules exactly.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent from October 2008 and last serving as Customer Care Lead, was declared redundant in a restructuring driven by deteriorating profitability. He was notified of 23 intended redundancies on 15th January 2015 after an all-staff meeting, consulted, made an unsuccessful counter-offer for an enhanced package, applied for and withdrew from two internal vacancies, and was confirmed redundant on 16th February 2015 with a gross package of Kshs.2,444,384.77 including one month's salary in lieu of notice, 1.5 months' severance per completed year, accrued leave and pro-rated 13th month pay. He sued, alleging the redundancy was unprocedural, malicious and defamatory, and sought reinstatement, salary arrears, 16 days' salary for February 2015, maximum compensation of twelve months' salary and pension-related relief. The court, framing the issues as whether the redundancy was lawful and whether the prayers were available, held that the Respondent complied with section 40 of the Employment Act: it notified the Labour Officer of the reasons and extent of the redundancy, listed the Claimant's position, consulted the employees, issued written notices with reasons, and paid terminal dues exceeding the statutory minimum. Redundancy being an employer's prerogative subject to those statutory conditions, the redundancy was lawful. The claim was dismissed in its entirety, with each party bearing its own costs.

Key legal issues

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01

Whether the redundancy was lawful under section 40 of the Employment Act

Holding

The Respondent complied with section 40: it notified the Labour Office on 8th January 2015 of 23 redundant positions including the Claimant's, held a consultative meeting on 15th January 2015, issued two notices of intended redundancy to the Claimant stating reasons, engaged in consultation, and paid terminal dues including severance at 1.5 months per completed year

Reasoning

The court found the Labour Office notification specified reasons and extent, listing the Claimant's position. All employees including the Claimant attended a consultative meeting, after which he received two letters on 15th January 2015 explaining the restructuring rationale. He made a counter-offer which was considered, was informed of alternative vacancies, and received his gross package of Kshs.2,444,384.77 including severance above the statutory minimum of 15 days' pay per year. The court held this satisfied section 40.

p. 10
02

Whether the Claimant was entitled to compensation for unfair termination

Holding

No, because the redundancy was lawful and compensation is only available for unfair termination

Reasoning

Having found compliance with section 40, the foundational claim of unfair/unprocedural redundancy failed. Compensation under the Employment Act presupposes unfair termination, which was not proved. The Claimant's allegations of ambush and malice were not established on the evidence, the Labour Office notification and consultation records having been produced and the Claimant admitting receipt of the notices.

p. 10
03

Whether reinstatement was available

Holding

No - the prayer was abandoned, and in any event unavailable given the lawful redundancy, the Respondent's liquidation, and the three-year limit on reinstatement orders

Reasoning

The court noted the prayer was not pursued in written submissions. It nonetheless clarified that reinstatement could not issue because the redundancy was lawful, the Respondent was in voluntary liquidation and could not recruit employees, and the Employment and Labour Relations Court Act restricts reinstatement orders to three years from termination, which occurred nearly nine years earlier.

p. 10

Legal principles established

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  • Redundancy is a prerogative of the employer, subject to compliance with the conditions in section 40 of the Employment Act on notification and terminal dues

Court orders

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  1. 1.The Claimant's claim fails and is dismissed
  2. 2.Each party shall bear its own costs

Authorities

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Legislation

  • Employment Actsection 40(1)
  • Employment Actsection 45(2)(b)
  • Employment and Labour Relations Court Actsection 12(3)
  • Retirement Benefits Authority Regulationsnot specified

Cases cited (11)

  • Kenya Airways v Kenya Aviation Workers Union
    C.A. No. 46 of 2013 eKLR 2014
  • Jerusha Nyambura Maingi v Sen-tech Ltd
    ELRC Cause No. 1710 of 2013
  • Francis Kiragu v River cross Technologies Ltd
    ELRC Cause No. 1681 of 2013
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others
    null
  • Barclays Bank of Kenya Ltd v Evans Ondusa Onzere
    null
  • East Africa Portland Cement Company Ltd v Ismael Otieno Ondingo
    null
  • Carol Atieno Osweta v Kenya Yungheng Plate Mkaig Ltd
    null
  • Diana Wambui Irungu & 2 Others v Nettle Kenya Limited
    null
  • George Buoro v Kinindia Assurance Company
    null
  • Nyoturu v Telcom Kenya Limited
    null
  • Fardosa Mohamed Elmi v British Broadcasting Corporation
    ELRC Cause No. 615 of 2019
Jurisdiction invoked
Employment and Labour Relations Court Act (original employment jurisdiction)

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, "Nyamao v Nestle Equatorial African Region Limited (Cause 328 of 2015) [2024] KEELRC 65 (KLR)", Case Analysis (2024). Cause No 328 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/65/eng@2024-01-25

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