Mutulu & another v Cowater International INC (Employment and Labour Relations Cause E898 of 2022) [2024] KEELRC 861 (KLR)
The bottom line
#A Kenyan court upheld a company redundancy because the employer gave proper one-month notice, notified the Labour Officer, and genuinely consulted affected employees.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent had valid reasons to terminate on account of redundancy
Yes - the Respondent proved valid reasons based on operational requirements after loss of a major UK-funded contract and a 65% decline in its Kenya hub
Section 45(2) requires the employer to prove a valid and fair reason based on operational requirements. RW1 testified the company lost a 10 million pound contract and the UK-funded project ended, with a 65% decline in the Kenya hub. The reasons were explained in the 20.09.2022 notice and the 21.10.2022 termination letters. The court applied the managerial prerogative principle and held the reasons valid under Sections 43 and 45(2).
Whether the termination was procedurally unfair under Section 40(1) of the Employment Act
No - the Respondent complied with Section 40(1)(b): it issued a one-month written notice to employees and the County Labour Officer, and held consultations
The notice of intended redundancy dated 20.09.2022 was served on the County Labour Officer who acknowledged receipt on 21.09.2022. Both Claimants admitted participating in consultation meetings but produced no evidence they raised concerns with the Respondent. The selection criteria (seniority, skill, ability, reliability) were discussed in consultations, reducing the affected employees from 6 to 3. Severance at 15 days per year worked and accrued leave were offered.
Whether the Claimants were entitled to compensation and other reliefs
No - having failed to prove unfair termination, the Claimants were not entitled to compensation
Since both substantive and procedural fairness were established, the foundation for compensation under Section 49 fell away. The 1st Claimant was on annual leave, not maternity leave, at the time of termination per her own cross-examination, and no notice pay was due as one month's notice had been given.
Legal principles established
#- Both substantive and procedural fairness under Sections 43, 45, 47 and 49 of the Employment Act apply to terminations on account of redundancy
- An employer's decision on which positions are redundant is a managerial prerogative not to be interfered with unless the procedure followed was wrong or unfair
Court orders
#- 1.The Claimants' claim of unfair termination is dismissed
- 2.Each party will meet the costs of their suit
- Jurisdiction invoked
- Original employment and labour relations jurisdiction under Article 162(2) of the Constitution and the Employment Act (court as constituted; provisions not expressly set out in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mutulu & another v Cowater International INC (Employment and Labour Relations Cause E898 of 2022) [2024] KEELRC 861 (KLR)", Case Analysis (2024). ELRC Cause (Nairobi), Memorandum of Claim dated 29th November 2022 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/861/eng@2024-04-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.