Shikuku v Corporate Insurance Company Limited (Cause 1535 of 2018) [2024] KEELRC 1303 (KLR)
The bottom line
#A Kenyan court ruled a Chief Legal Officer's redundancy unlawful because her employer skipped the required one-month notice and consultation, awarding her 8 months' pay.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the claimant's position was declared redundant
- 2.Whether the redundancy was procedural and lawful under section 40 of the Employment Act, 2007
- 3.What compensation, if any, is payable under section 49 of the Employment Act
Key legal issues
#Procedural fairness of the redundancy under section 40 of the Employment Act, 2007
The redundancy was not procedural because the claimant was not given a month's notice or notified with the labour officer and was not consulted.
The court found the contract of service existed and was terminated by a redundancy letter. Although the respondent claimed the position was abolished per Insurance Regulatory Authority requirements to create a Legal and Compliance Officer position, the claimant was not consulted, prepared, or given the statutory one month's notice to her and the area labour officer as required by section 40. The redundancy therefore failed the statutory procedure despite terminal dues being computed and paid.
Appropriate remedy under section 49 of the Employment Act
Eight months' compensation at last gross monthly salary (Kshs 343,700 x 8 = Kshs 2,749,600) meets the ends of justice.
The court weighed the long period of service (17 years), the claimant's desire to continue in service, the fact that she did not contribute to the termination, and the terminal package already paid. Balancing these factors under section 49, it fixed compensation at eight months' gross salary, the other claimed reliefs having been abandoned in submissions.
Legal principles established
#- Redundancy must be procedurally effected with a month's notice to the employee and the area labour officer per section 40 of the Employment Act, and consultation with the employee.
- Where termination by redundancy is not procedural, the court may award compensation under section 49 of the Employment Act taking into account length of service, conduct and the terminal package paid.
Court orders
#- 1.Payment of Kshs 2,749,600.00 by 01.08.2024 failing which interest to be payable at Court rates from the date of judgment until full payment
- 2.The respondent to pay costs of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 40 and 49)
Relief refused
#Declaration that the termination letter dated 16th/17th August 2018 is invalid ab initio and permanent stay/withdrawal of the letter
Claimant abandoned the other reliefs in submissions; court awarded only compensation under section 49
Order allowing claimant to continue serving in her position and barring recruitment for her position
Abandoned in submissions
Compensatory general damages for violation of rights, loss of office, injury to reputation and loss of future income
Abandoned; court instead awarded 8 months' compensation under section 49
Costs
The respondent to pay the claimant's costs of the suit.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In particular it appears the claimant was not consulted and prepared for the redundancy through a month's notice to her and the area labour oficer per section 40 of the Act.
The Court returns that 8 months’ compensation at last gross monthly salary will meet ends of justice thus, 343,700 x 8 = Kshs 2, 749, 600.00.
Payment of Kshs 2, 749, 600.00 by 01.08.2024 failing interest to be payable at Court rates from the date of this judgment until full payment.
The respondent to pay costs of the suit.
Issues in the judgment
#Internal inconsistency on the date of the redundancy termination letter - the claim pleaded a termination letter dated 17.08.2018 while the findings refer to a redundancy letter dated 27.11.2019 (the same date as the respondent's memorandum of response).
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shikuku v Corporate Insurance Company Limited (Cause 1535 of 2018) [2024] KEELRC 1303 (KLR)", Case Analysis (2024). Memorandum of claim dated 16.11.2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1303/eng@2024-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.