Sirere & 6 others v Nesco Services Ltd (Employment and Labour Relations Cause 75 of 2016) [2024] KEELRC 2323 (KLR)
The bottom line
#A Kenyan court ruled that losing a client contract doesn't excuse an employer from following the legal redundancy procedure before terminating workers.
What this practically means
#Executive summary
#Key legal issues
#Whether the suit was defective as a representative suit filed without authority
The suit was not representative but one of co-claimants; the objection failed
The Respondent argued the 1st Claimant lacked written authority. The Court held the suit involved co-claimants, not a representative action, and that no law required written authority for a verifying affidavit sworn for verification purposes. The Claimant's own submissions relied on inapplicable Civil Procedure Rules, but the objection itself stood on no legal footing and was rejected.
Whether the termination was procedurally fair
Termination was procedurally unfair as the Section 40 redundancy procedure was not followed
The loss of the client's contract constituted termination on operational requirements, i.e. redundancy. Section 40 requires redundancy notices and consultation, which were not issued or undertaken. The Court adopted the reasoning that the notice requirement allows parties to explore alternatives to mitigate terminations, and found no consultations occurred at all.
Whether there was a valid and fair reason (substantive justification)
No valid and fair reason was proved; the alleged contract was not tendered in evidence
The employer bore the burden under Sections 43 and 45(2) to prove a valid and fair reason. Despite alleging that its contract with the World Bank lapsed and its bid failed, the Respondent did not tender the contract or evidence of the unsuccessful bid. Applying the BMD Knitting Mills fairness test, the claimed commercial rationale was not substantiated.
Entitlement to compensatory damages under Section 49(1)(c)
Compensation of 3 to 12 months' gross salary awarded based on length of service and conduct of termination
The Court exercised its discretionary power under Section 49(1)(c), considering each Claimant's length of service, the termination's non-compliance with the law, and the absence of contribution by the Claimants to the termination. Long-serving claimants received up to 12 months' compensation; shorter-serving ones 3 to 6 months.
Claim for untaken leave days
Allowed; the Respondent did not controvert the Claimants' evidence of never taking leave
The contracts provided 21 days' annual leave consistent with Section 28. The Claimants' uncontroverted evidence that they never took leave, coupled with the Respondent's position as keeper of employment records under Section 74, justified compensation for three years of untaken leave per Claimant.
Legal principles established
#- For a termination to pass the fairness test there must be both substantive justification and procedural fairness
- Termination on grounds of operational requirements is redundancy and must strictly comply with Section 40 of the Employment Act, including redundancy notices and consultation
- Fairness of an operational reason is tested by examining whether a reasonable commercial basis exists and whether the decision was fair to the affected employee, not merely whether it was the choice the court would have made
- An overtime claim must be pleaded with specificity as to the particular days and hours worked; Section 74 does not create an automatic pass to judgment where the employer fails to produce records
- A co-claimant who swears a verifying affidavit need not produce written authority to swear it on behalf of other claimants; such a suit is not a representative suit
Court orders
#- 1.Judgment entered for the Claimants against the Respondent with compensation for unfair termination equivalent to 3 to 12 months' gross salary depending on each Claimant's length of service (George Oduor Sirere Kshs. 109,250; Jackonia Omondi Ogego Kshs. 98,739; Christine Nyamoramambo Maangi Kshs. 52,343.40; Gladys Lukendo Ambuchi Kshs. 98,379; James Sangani Monayo Kshs. 121,716; Pamela Nanguni Naibeni Kshs. 26,171.70; Winfred Mwiva Kshs. 149,500)
- 2.Compensation to each Claimant for earned but untaken leave days for 3 years (e.g. Kshs. 22,942.50 for the 1st Claimant), totalling per Claimant: Kshs. 132,192.50; 119,474; 70,663.59; 119,474; 143,016.30; 44,491.89; 180,895
- 3.Interest on the sums awarded at court rates from the date of Judgment until payment in full
- 4.Costs of the suit to the Claimants, instruction fee to be computed on the basis of the total amount awarded
- 5.Rejection of the Respondent's contention that the claim should be struck out
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 35, 40, 41, 43, 45, 47(5), 49(1)(c) and 74)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sirere & 6 others v Nesco Services Ltd (Employment and Labour Relations Cause 75 of 2016) [2024] KEELRC 2323 (KLR)", Case Analysis (2024). Not stated in judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2323/eng@2024-09-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.