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ELRCPartially AllowedCause No. E019 of 2023· [2024] KEELRC 566 (KLR)

Lavington Security Guards Ltd v Omambia (Appeal E019 of 2023) [2024] KEELRC 566 (KLR)

Employment and Labour Relations Court
14 March 2024
3,963 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court cut a redundancy payout but confirmed that skipping the mandatory one-month redundancy notice makes a termination unfair.

What this practically means

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Executive summary

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This was an appeal to the Employment and Labour Relations Court at Kisumu (Baari J) against a magistrates' court decision that found the Respondent's termination on account of redundancy unfair and unlawful and awarded all reliefs sought. The Appellant raised thirteen grounds of appeal, condensed by the court into two issues: whether the finding of unfair termination was supported by law and evidence, and whether the awards were deserved. On the first issue, the court held that the redundancy notice issued on 25th September 2021, taking effect on 1st October 2021, violated the mandatory one-month notice requirement under Section 40 of the Employment Act, and there was no evidence the labour officer was notified. The finding of unfair termination was upheld. On the second issue, the court found the trial court made a blanket award without reasons and proceeded to analyse each head. The 12 months' compensation was reduced to 8 months (Kshs 121,135.60) because the Respondent failed to prove mitigation and could have secured comparable employment. The underpayment award was upheld at Kshs 111,384 but limited to the statutory limitation period under Section 90. Payment in lieu of notice (Kshs 15,141.95) was upheld. Awards for house allowance, leave allowance and gratuity were set aside. The Appellant was to bear half the costs of the lower court suit, and each party bore their own costs of the appeal.

Key legal issues

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01

Validity of the redundancy process

Holding

The termination was unfair because the redundancy notice of 25th September 2021 took effect on 1st October 2021, barely five days later, contravening the mandatory one-month notice in Section 40, and there was no evidence the labour officer was notified.

Reasoning

Section 40(1) of the Employment Act prescribes a seven-step mandatory procedure. The court examined the notice period and notification of the labour officer. The five-day notice fell short of the statutory one-month requirement, and no proof of notification to the labour officer was adduced. The purpose of the notice is to enable consultation to avert or mitigate terminations. The finding of unfair termination by the trial court was therefore upheld.

p. 7
02

Compensation for unfair termination

Holding

Maximum award of 12 months' pay unjustified; 8 months' salary awarded.

Reasoning

The court held that remedies under Section 49 are discretionary and the maximum award must be justified. Given that the Respondent could easily have secured comparable employment and failed to demonstrate mitigation efforts, the maximum award was not proved. Eight months' salary was deemed sufficient compensation.

p. 7
03

Underpayment claim

Holding

Award of Kshs 111,384 upheld, limited to the period within the limitation window (January 2019 to March 2021).

Reasoning

Underpayment occurs when wages fall below contractual or statutory minimum rates. Pay slips showed a consolidated salary of Kshs 10,500 against the prescribed minimum of Kshs 15,141.95 for a night watchman, an underpayment of Kshs 4,641 monthly. Claims prior to January 2019 were statute-barred under Section 90 of the Employment Act.

p. 8

Legal principles established

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  • The seven-step redundancy procedure under Section 40(1) of the Employment Act is mandatory and an employer must comply with all seven steps.
  • Redundancy notice must be issued not less than one month prior to the intended termination date; a 5-day notice violates Section 40.
  • An award of the maximum 12 months' compensation must be justified on sound judicial principles, considering mitigation and availability of comparable employment.
  • Underpayment claims are subject to the three-year limitation period under Section 90 of the Employment Act.

Court orders

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  1. 1.The award of 12 months' salary as compensation for unfair termination is set aside, and substituted therewith 8 months' salary for unfair termination at Kshs 121,135.60/-
  2. 2.The award of Underpayment is upheld at Kshs 111,384/-
  3. 3.The award on account of pay in lieu of notice is upheld at Kshs 15,141.95
  4. 4.The awards of house allowance, leave allowance and gratuity are set aside in entirety.
  5. 5.The Appellant to bear half the costs of the suit before the lower court.
  6. 6.Each party bears their own costs of the appeal.

Authorities

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Legislation

  • Employment ActSection 40(1)(a)-(g)
  • Employment ActSection 2 (definition of redundancy)
  • Employment ActSections 43 and 45
  • Employment ActSection 49(1)(c) and 49(4)
  • Employment ActSection 90
  • Labour Institutions Actprescribed minimum wages
  • REGULATION OF WAGES (GENERAL) (AMENDMENT) ORDER, 2018minimum wage for night watchman (Kshs 15,141.95)

Cases cited (7)

  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    [2013] eKLR
  • Cargill Kenya Limited vs Mwaka & 3 Others
    (Civil Appeal No. 54 of 2019) [2021] KECA 115 (KLR) (22 October 2021)
  • CMC Aviation Limited v Mohammed Noor
    [2015] eKLR
  • Kenya Union of Journalists and Allied Workers v. Nation Media Group
    (2013) eKLR
  • Gerrishom Mukhutsi Obayo vs Dsv Air and Sea Ltd
    (2018) eKLR
  • Kenfreight (EA) Limited v Benson K. Nguti
    (2016) eKLR
  • Kenya Broadcasting Corporation v Geofirey Wakio
    [2019] eKLR
On appeal from
Magistrates Court (Trial Court)
Jurisdiction invoked
First appellate jurisdiction over the magistrates' court decision in an employment claim (Employment and Labour Relations Court)

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, "Lavington Security Guards Ltd v Omambia (Appeal E019 of 2023) [2024] KEELRC 566 (KLR)", Case Analysis (2024). Cause No. E019 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/566/eng@2024-03-14

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