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ELRCPartially AllowedCause No E038 of 2023· [2024] KEELRC 1582 (KLR)

Omondi v Medisel (Kenya) Limited & another (Cause E038 of 2023) [2024] KEELRC 1582 (KLR)

Employment and Labour Relations Court
21 June 2024
4,963 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court ruled an employee's redundancy was unfair because the employer couldn't prove the job actually disappeared or followed proper procedure.

What this practically means

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Executive summary

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This first-instance judgment of the Employment and Labour Relations Court at Nairobi, delivered by Stella Rutto J on 21st June 2024, concerned a claim by a former Customer Care Service and Tele Sales Manager whose employment was terminated on 27th January 2022 on grounds of redundancy, following a notice of intended redundancy issued on 28th December 2021 due to alleged financial losses. She claimed Kshs 1,125,692.30 for unutilized leave days, salary underpayment and maximum compensation for unfair termination. The Respondents maintained that the redundancy was substantively justified and procedurally fair. The court framed two issues: the fairness and lawfulness of the termination and entitlement to reliefs. On substantive justification, it found the Respondents failed to prove that the Claimant's position was actually abolished, and on procedure, the notice to the County Labour Officer did not state the extent of the redundancy, the selection criteria were not demonstrably applied, and no consultations were initiated. The termination was declared unfair and unlawful. The claim was partially allowed: compensatory damages of three months' salary (Kshs. 265,500.00), unpaid leave of 2.75 days (Kshs. 8,112.50) and unpaid airtime facilitation for 11 months (Kshs. 16,500.00), totalling Kshs. 290,112.50, with interest and costs to the Claimant. Full payment for eight leave days and maximum compensation were not awarded.

Key legal issues

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01

Substantive justification for the redundancy

Holding

The Respondents failed to prove substantive justification because there was no evidence that the Tele Sales Manager position was abolished

Reasoning

Although financial losses and restructuring were asserted, the Respondents led no evidence that the Claimant's position ceased to exist. Following Kenya Airways v Aviation & Allied Workers Union, an employer must show the termination is attributable to the redundancy, i.e. services rendered superfluous or abolition of office. Financial strain alone does not satisfy the statutory definition of redundancy under Section 2 of the Employment Act.

p. 6
02

Procedural compliance with Section 40(1)(a) and (b) - notice to labour officer

Holding

The notice to the County Labour Officer was defective as it did not state the extent of the redundancy or identify the Claimant's position

Reasoning

The Notice of 28th December 2021 merely stated that certain positions would be declared redundant, without indicating the number of employees affected or naming the Claimant's position among those affected. This fell short of substantial compliance with Section 40(1)(b) of the Employment Act, which requires disclosure of the reasons for and extent of the intended redundancy.

p. 7
03

Compliance with the selection criteria under Section 40(1)(c)

Holding

The Respondents failed to prove objective application of the LIFO and skills/seniority/reliability criteria

Reasoning

Despite RW1's assertion that the LIFO principle and criteria of skills, seniority and reliability were used, no evidence such as a score sheet demonstrated how the criteria were applied to select the Claimant. The assertions also conflicted with the Respondents' submissions that the entire position was abolished, leaving doubt as to whether selection was objective.

p. 8
04

Pre-redundancy consultations

Holding

The Respondents failed to initiate the consultations contemplated in the notice

Reasoning

The Respondents claimed the Claimant was absent and unreachable, but did not adduce evidence of attempts to reach her, nor did they issue a notice requiring her to explain her absence. Her evidence that her work emails were disabled was not controverted. The court concluded the Respondents failed to initiate pre-redundancy consultations as decreed under the ILO Convention No. 158 framework.

p. 8
05

Entitlement to reliefs

Holding

Compensatory damages of three months' salary, payment for 2.75 accrued leave days and unpaid airtime facilitation for 11 months were awarded

Reasoning

Having found both substantive and procedural unfairness, the court awarded three months' salary as compensation, calibrated to the short length of service. Payment for the proved leave balance of 2.75 days was awarded since there was no evidence of payment, and unpaid airtime facilitation of Kshs. 1,500 per month for 11 months was awarded based on the top-up forms.

p. 9

Legal principles established

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  • Termination on account of redundancy must be both substantially justified and procedurally fair
  • The employer bears the burden of proving that the terminated position was actually abolished and rendered superfluous
  • Notice to the labour officer under Section 40(1)(b) must state the extent of the redundancy, including the positions and number of employees affected

Court orders

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  1. 1.A declaration that the termination of the Claimant from employment was unfair and unlawful
  2. 2.Compensatory damages of Kshs. 265,500.00 for unfair termination (three months' salary)
  3. 3.Unpaid overtime for 11 months in the sum of Kshs. 16,500.00
  4. 4.Unpaid leave (2.75 days) in the sum of Kshs. 8,112.50
  5. 5.Total award of Kshs. 290,112.50
  6. 6.Interest on the total award at court rates from the date of Judgment until payment in full
  7. 7.The Claimant shall have the costs of the suit

Authorities

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Legislation

  • Employment ActSection 45(2)(b)(ii)
  • Employment ActSection 2
  • Employment ActSection 40
  • Employment ActSection 40(1)(a), (b), (c), (e), (f) and (g)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • ILO Convention No. 158 - Recommendation No. 166Article 13

Cases cited (8)

  • Mary Nyawira Karimi v Pure Circle (K) Limited
    (2018) eKLR
  • Gerrishom Mukhutsi Obayo v Dsv Air and Sea Limited
    (2018) eKLR
  • Barclays of Kenya Ltd & another v Gladys Muthoni & 20 others
    (2018) eKLR
  • Cargill Kenya Limited v Mwaka & 3 others
    (2021) KECA 115 (KLR) 22
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    (2014) eKLR
  • Lebo and 331 others v Kenya Power & Lighting Co. Ltd
    (2013)
  • Muraguri v Mpala Research Center & 2 others
    [2024] KEELRC 440 (KLR)
  • Ngaira & 126 others v Sendwave Limited (ZEPZ)
    (Cause E532 of 2023) (2024) KEELRC 567 (KLR)
Jurisdiction invoked
Employment and labour relations jurisdiction under Article 162(2) of the Constitution (implied; not expressly cited)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Omondi v Medisel (Kenya) Limited & another (Cause E038 of 2023) [2024] KEELRC 1582 (KLR)", Case Analysis (2024). Cause No E038 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1582/eng@2024-06-21

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