Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No E588 of 2023· [2024] KEELRC 2347 (KLR)

Mohan v CCI Kenya Limited (Cause E588 of 2023) [2024] KEELRC 2347 (KLR)

Employment and Labour Relations Court
30 September 2024
4,037 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

#

Kenya's Employment Court ruled a redundancy unfair because the employer skipped proper notice, consultation and proof, awarding the employee three months' salary.

What this practically means

#

Executive summary

#
The Claimant, competitively recruited from India as Head of Compliance, Quality and Training effective 1st March 2022 at Kshs.1,277,100.00 per month, received a notice of termination on account of redundancy on 7th June 2023, with the last working day subsequently changed from 30th to 19th June 2023. She sued, contending the redundancy was a facade, unprocedural, and in breach of Section 40(1) of the Employment Act, and sought a declaration, 12 months' compensation, refunds of housing and school-withdrawal penalties, punitive damages and a certificate of service. The Respondent admitted the employment and the redundancy notice but denied changing the last working day and asserted consultations took place; it did not file submissions. The Court found the Respondent failed to justify the redundancy substantively, tendering no evidence of when, why or how the restructuring was decided, and failed procedurally: the notice fell short of a calendar month, was shortened further, no copy was proved served on the Local Labour Officer, and no meaningful consultations were established. However, the Court held only one notice is mandatory under Section 40(1), rejecting the two-notice argument. The redundancy was declared unfair. Compensation was fixed at three months' gross salary (Kshs.3,831,300.00) given the short service, performance complaints and payments already made. The refunds, punitive and aggravated damages claims were declined for want of evidence and because the Respondent was not party to the Claimant's third-party contracts. A certificate of service, costs to the Claimant and interest on the award were ordered.

Key legal issues

#
01

Substantive justification for the redundancy

Holding

The Respondent failed to demonstrate a valid and fair reason for the redundancy

Reasoning

The Memorandum of response made no reference to the circumstances triggering the redundancy. RWI's statement was reticent on when the decision was made, the reasons and the number of employees affected. The Respondent did not file its new organization structure, so the Court could not verify that restructuring necessitated the termination. The employer bore a heavy burden of justification under Sections 40 and 45 which it did not discharge.

p. 6
02

Adequacy of the redundancy notice

Holding

The notice dated 7th June 2023 with effect from 30th June 2023 was ineffectual as it fell short of a calendar month, and was further undermined by shortening the last working day to 19th June 2023

Reasoning

Section 40(1)(a) and (b) require not less than a month's notice to the employee and the Local Labour Officer. Applying Section 3(1) of the Interpretation and General Provisions Act, a month is a calendar month, so the requisite days were not met. The letter of 15th June 2023 bringing the termination forward to 19th June aggravated the defect. No copy of the notice to the Local Labour Officer was filed.

p. 6
03

Notice to the Local Labour Officer

Holding

The Respondent failed to prove compliance with Section 40(1)(b) as regards notice to the Local Labour Officer

Reasoning

RWI alleged a notice was sent but admitted it was not filed or served as confirmatory evidence. The Respondent availed no evidence of having given a copy of the notice to the Local Labour Officer, so this mandatory condition was unproved.

p. 7
04

Pre-redundancy consultations

Holding

No meaningful consultations were proved

Reasoning

The single email of 5th May 2023 forwarding an organizational structure, of unclear content, was insufficient to prove consultations. Meaningful consultation is required per the Court of Appeal in Barclays Bank of Kenya, drawing on ILO Convention No. 158 and Article 41 of the Constitution, and must be real and not cosmetic.

p. 7
05

Whether two notices are required under Section 40(1)

Holding

Only one mandatory notice is required; a second notice is permissible but not legally required

Reasoning

Counsel for the Claimant, relying on Ndolo J in Charles Nyangi Nyamohanga v Action Aid International, urged that two notices were required. The Court rejected this, holding that the provisions of Section 40(1) provide for only one mandatory notice, as the Court of Appeal has held.

p. 6

Legal principles established

#
  • Section 40(1) of the Employment Act is mandatory and sets seven conditions for a lawful redundancy
  • A termination must be both substantively justifiable and procedurally fair to pass the fairness test under Section 45
  • There is a heavy burden of proof on the employer to justify termination and to give the reasons for and extent of the redundancy
  • Meaningful pre-redundancy consultations are required as a matter of constitutional and international best practice
  • Only one notice is mandatory under Section 40(1); a second notice is not a legal requirement
  • Punitive or exemplary damages are awardable only in two circumstances plus where authorized by statute

Court orders

#
  1. 1.Declaration that termination of employment on account of redundancy was unfair
  2. 2.Equivalent of 3 months gross salary, Kshs.3,831,300.00
  3. 3.Certificate of service unless already issued
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest on the compensation award at Court rates till payment in full

Authorities

#

Legislation

  • Employment Act, 2007Section 40(1)
  • Employment Act, 2007Section 2
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 49(1)(c)
  • Employment Act, 2007Section 51
  • Interpretation and General Provisions Act, Cap 2Section 3(1)
  • Constitution of KenyaArticle 41
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure Act, Chapter 21Section 1B
  • ILO Convention No. 158 Termination of Employment Convention, 1982 / Recommendation No. 166Article 13 of Recommendation No. 166

Cases cited (12)

  • Kenya Airways Ltd V Aviation & Allied Workers & others
    (2014) eKLR
  • KUDHEIHA V Aga Khan University
    (2015) eKLR
  • Charles Nyangi Nyamohanga V Action Aid International
    (2015)
  • Onesmus Kinyua Magoiya V Prudential Life Assurance Kenya
    (2022) eKLR
  • PN Mashru Ltd V Ojenge
    (2023) KECA 473
  • Naima Khamis V Oxford University Press (EA) Ltd
    (2017) eKLR
  • Walter Ogal Anaro V Teachers Service Commission
    (2013) eKLR
  • Barclays Bank of Kenya Ltd & another V Gladys Muthoni & 20 others
    (2018) eKLR
  • Cammish V Parliamentary Service
    (1996) 1 ERNZ 404
  • Bank of Baroda (Kenya) Ltd V Timwood Products Ltd
    Civil Appeal 132 of 2001
  • Obongo & another V Municipal Council of Kisumu & others
    (1971) EA 91
  • Rookes V Barnard
    (1964) AC 1129
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 40, 45, 49 and 51) over a claim of unfair termination of employment

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (1)

#

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

Cite this brief

#

Cite this brief

Caselaw, "Mohan v CCI Kenya Limited (Cause E588 of 2023) [2024] KEELRC 2347 (KLR)", Case Analysis (2024). Cause No E588 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2347/eng@2024-09-30

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