Maina v Nairobi Women’s Hospital (Cause E276 of 2021) [2024] KEELRC 362 (KLR)
The bottom line
#Nairobi Hospital's redundancy of its internal audit head failed because the employer botched the statutory notice, even though its outsourcing reasons were genuinely valid.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy complied with Section 40 of the Employment Act, 2007
The redundancy failed: the notice of redundancy was not served on the Labour Officer as authenticated by signature, and even if served on 13th November, 2020, the effective date of 9th December, 2020 was less than one month away, rendering the notice ineffectual and the termination unfair.
The court found the copy of the notice on record bore only a stamp and date of the Labour Officer, Nairobi, with no signature, and the Respondent's witness admitted the letter had no signature. A signature authenticates receipt; a stamp alone fails the test of authentication. Further, Section 40(1)(a) and (b) require not less than one month's notice prior to the termination date; 13th November to 9th December, 2020 was less than one month, so the notice was ineffectual even assuming service.
Whether there was a valid and fair reason for the redundancy
Yes. The Respondent's board resolved to outsource the internal audit function to E&Y pursuant to a strategic decision of the Evercare Group, which the court accepted as a genuine operational re-organization and a valid reason.
Extracts of the minutes of the Audit Risk and Compliance Committee of 28th October, 2020 showed the proposal to outsource came from Evercare Kenya Health Ltd with costs shared across the group. The court applied the Wringley parameters on outsourcing and held that outsourcing a non-core function is an accepted business concept and did not render the redundancy a sham. The Claimant's own email of 23rd November, 2020 confirmed the decision was organization-need driven and not a reflection on individual capacity.
Whether consultations took place with the Claimant
Yes. The court was satisfied that consultations took place, evidenced by the briefing on 10th/16th November, 2020 and the Claimant's email of 23rd November, 2020 negotiating enhanced severance pay which the Respondent acceded to.
RWII confirmed a meeting on 16th November, 2020 where the process was explained, and although minutes were not filed, the Claimant's email of 23rd November, 2020 referenced 'the meeting held to communicate the boards decision to outsource the internal audit function' and negotiated severance from 15 days to 60 days per year, which the CEO approved. The court found consultations took place and the Respondent was willing to engage.
Whether the Claimant proved the alleged pre-determined termination outside the redundancy
No. The Claimant tendered no credible evidence that the director's comment, the verbal requests to respond to the forensic audit, or the E&Y capability assessment amounted to a pre-determined termination.
The director's isolated comment lacked context; the request to respond to the forensic audit findings was not a show-cause notice as the allegations implicated the department generally, not the Claimant personally; and the capability assessment occurred after the notice of redundancy. The Claimant's own email confirmed his team possessed the requisite capacity. Under Section 47(5), the burden of proving unfair termination rests on the employee, and the Claimant failed to discharge it.
Legal principles established
#- The term 'extent' in Section 40(1)(a) of the Employment Act does not require the notice of redundancy to name the affected employees; disclosing the departments affected and the number of employees affected suffices.
- Service of the redundancy notice on the Labour Officer must be authenticated by a signature; a stamp and date alone are insufficient, and the one-month notice period under Section 40(1) runs to actual service.
- Failure to serve the notice of redundancy on the Labour Officer within the statutory period renders the notice ineffectual and the purported redundancy an unfair termination under Section 45.
- Although Section 40(1) does not expressly require consultations in a redundancy, the duty to consult has been domesticated from ILO Convention No. 158 by virtue of Articles 2(6) and 41 of the Constitution.
- Outsourcing a non-core function such as internal audit is a lawful business concept and a valid reason for redundancy, provided the parameters in Wringley Company (East Africa) Ltd v Attorney General are met.
Court orders
#- 1.Declaration that termination of employment on account of redundancy was unfair.
- 2.Equivalent of one (1) month's salary, Kshs.529,100/=.
- 3.Certificate of service.
- 4.Costs of the suit.
- 5.Interest at court rates from date of judgment till payment in full.
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007 (Sections 40, 43, 45, 47(5) and 51)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Maina v Nairobi Women’s Hospital (Cause E276 of 2021) [2024] KEELRC 362 (KLR)", Case Analysis (2024). Employment and Labour Relations Cause (Claimant commenced suit on 7th April, 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/362/eng@2024-02-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.