Scott Bowerbank Day v Victory Farms Limited (Employment and Labour Relations Cause E181 of 2022) [2025] KEELRC 299 (KLR)
The bottom line
#A Kenyan court ruled a farm manager's 'redundancy' dismissal was fake, awarding him over USD 238,000 including his full vested share incentive.
What this practically means
#Executive summary
#Key legal issues
#Substantive justification of the redundancy termination
The termination lacked substantive justification; the Respondent failed to prove a restructuring or redundancy situation, and the Claimant's services were not rendered superfluous since his duties were absorbed into two new roles.
The Court applied Section 45 of the Employment Act and the Kenya Airways test that the employer must show the termination is attributable to a genuine redundancy. The Respondent's witness admitted the Claimant could have fitted into either of the two newly created roles on comparable terms, meaning his duties were spread across the new departments rather than abolished. No documentary evidence of the restructuring was tendered, and no correspondence mentioned an intended restructure or redundancy. The redundancy ground was camouflaged; on the Respondent's own version the Claimant merely resisted redeployment.
Procedural fairness of the redundancy
The termination was procedurally unfair because the consultations that took place did not flow from the redundancy notice and were not about the alleged redundancy, its avoidance or mitigation.
Relying on the German School Society and Kenya Airways authorities, the Court held that a redundancy notice opens a mandatory consultative process which must be a reality, not a charade. The correspondence between the parties originated from the meeting of 25th October 2021, which was an attempt to force the Claimant to resign, and did not concern the intended redundancy. The Court found the Respondent acted in bad faith, suspending the Claimant from the farmhouse after he refused to resign.
Entitlement to the Management Incentive
The Management Incentive was contractual and had accrued; as a Good Leaver the Claimant was entitled to the 70% vested value of USD 154,350 fixed by the Respondent's CEO.
The Respondent had no detailed policy document on the incentive program, so the Court relied on the documents and the CEO's admissions under cross-examination. The CEO had discretion only to fix the value of accrued shares, which he did at USD 154,350 in the document dated 25th October 2021; he could not decide that an employee forfeits accrued value where the employee was not a Bad Leaver. The witness admitted the Claimant could not be categorized as a Bad Leaver and that payment would ordinarily follow within six months.
Severance pay, house allowance, relocation allowance and compensatory damages
The Claimant was awarded pro-rated severance pay, house allowance for three months, relocation allowance, and ten months' gross salary as compensation under Section 49para 1[c].
On severance, the Court endorsed Radido J's holding in Ann Njambi Ngugi v Medimax that severance is payable pro-rata even for an incomplete year. The Respondent's witness admitted the Claimant was denied accommodation from 25th October 2021 contrary to Section 31 of the Employment Act, and admitted entitlement to a relocation allowance. Compensation of ten months' salary reflected the camouflaged redundancy, the Respondent's bad faith, the length of service and the absence of any proven contribution by the Claimant to the termination.
Legal principles established
#- An employer alleging redundancy must prove a genuine redundancy situation; a restructure that merely redistributes an employee's duties across new roles does not render his services superfluous, and a dismissal disguised as redundancy is camouflaged and unfair.
- Failure by an employer to initiate and genuinely engage in consultations after a redundancy notice renders the termination procedurally unfair.
- Where a Management Incentive is contractual, the employer's discretion extends only to fixing the value of accrued shares, not to whether accrued value is payable; a Good Leaver is entitled to the value the CEO computed.
- Severance pay under Section 40para 1[g] of the Employment Act is payable on a pro-rata basis even for an incomplete final year of service; statutory employment rights are to be interpreted in the manner most favourable to the employee.
Court orders
#- 1.A declaration that the termination of the Claimant's employment was unfair
- 2.Compensation pursuant to Section 49[1][c] of the Employment Act of USD 77,500 (ten months' gross salary)
- 3.Pro-rated severance pay of USD 1,614.58
- 4.House allowance for the period 24th October 2021 to 25th January 2022 of USD 3,387.50
- 5.70% vested Management Incentive of USD 154,350
- 6.Relocation allowance of USD 1,500
- 7.Interest on the awarded sums at court rates from the date of judgment till full payment
- 8.Costs of the suit to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 40, 43, 45, 49) over a claim for unfair termination and contractual benefits
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Scott Bowerbank Day v Victory Farms Limited (Employment and Labour Relations Cause E181 of 2022) [2025] KEELRC 299 (KLR)", Case Analysis (2025). Cause E181 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/299/eng@2025-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.