Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers Union (KUDHEIHA) v Aga-Khan University Hospital Nairobi (Cause 51 of 2018) [2025] KEELRC 468 (KLR)
The bottom line
#Kenya's Employment Court upheld the hospital's 2018 redundancy of 322 staff as fair, dismissing the union's bid for reinstatement and compensation.
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 redundancy declared by the respondent on 19.01.2018 affecting 322 employees was lawful, fair in procedure and in substance
- 2.Whether the reason for termination by redundancy was genuine and a fair reason under sections 43 and 45 of the Employment Act
- 3.Whether selection criteria under section 40 of the Employment Act were required where entire departments were abolished
- 4.Whether the notices and consultation process leading to the redundancy were valid and adequate
- 5.Whether the reliefs of reinstatement and compensation were available
Key legal issues
#Genuineness and fairness of the reason for redundancy
The reason was genuine and fair under sections 43 and 45 of the Employment Act
The respondent reviewed its operations from 2014, found its cost base high with duplicated roles, and decided to abolish entire departments and outsource non-core functions. The Court held it was misconceived to argue that outsourcing meant positions still existed; the employer opted to outsource workforce for those services, establishing a valid operational requirement.
Need for selection criteria
Selection criteria under section 40 was unnecessary where entire departments were abolished
Because the restructuring involved wholesale elimination of entire departments rather than selection among employees within a department, there was no pool from which to select. The Court accepted the respondent's submission that the criteria were mute and moribund in such circumstances.
Consultations and notices
The redundancy complied with procedure; the claimant offered no options to the outsourcing design
The Court noted the history of notices in 2015, the intervening litigation up to the Court of Appeal, and found that although the claimant did not offer alternatives to outsourcing, the process was fair in procedure and substance. The respondent's findings in prior litigation were treated as binding and final.
Legal principles established
#- Where entire departments are abolished and all employees therein are terminated, selection criteria based on seniority and suitability under section 40 of the Employment Act is unnecessary
- Outsourcing of services is not proof that the redundant positions continued to exist; an employer enjoys the prerogative to design its enterprise including opting to outsource workforce
Court orders
#- 1.The suit is dismissed
- 2.Each party to bear its own 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 Act, section 12 (original jurisdiction over employment and labour relations disputes)
Relief refused
#Declaration that the redundancy of 322 positions was unlawful, wrongful and unfair
The Court found the redundancy fair in procedure and substance
Reinstatement of the 322 grievants without loss of benefits
Not established that the redundancy was unfair; the three-year limitation under section 12 of the ELRC Act for reinstatement had lapsed
Payment of emoluments from termination to reinstatement
Reliefs prayed for failed as unjustified
Twelve months' compensation
Not available under section 49 of the Employment Act since the redundancy was not unfair
Costs of the cause and interest
Each party ordered to bear own costs to foster industrial harmony
Costs
Each party to bear own 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.
The Court finds that the respondent has established that indeed the reason for termination by redundancy was genuine as existing and was a fair reason as relating the respondent’s operational requirements per sections 43 and 45 of the Employment Act, respectively.
selection criteria based on seniority and suitability per section 40 of the Act was thereby unnecessary as mute and moribund.
The Court finds that the redundancy was fair in procedure and substance.
In conclusion the suit is hereby dismissed with orders each party to bear own costs of the suit.
Issues in the judgment
#The claimant's earlier suit ELRC Cause No. 815 of 2015 and the respondent's appeal (Civil Appeal No. 7 of 2016) are referenced but full case numbers/citations of this cause are not stated in the judgment text
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.
- Export Consolidated Services Kenya Limited v Gitau (Appeal E162 of 2025) [2025] KEELRC 3689 (KLR)[2025] KEELRC 3689 (KLR)18 Dec 2025followed
Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers Union (KUDHEIHA) v Aga-Khan University Hospital Nairobi (Cause 51 of 2018) [2025] KEELRC 468 (KLR)", Case Analysis (2025). ELRC Cause (amended claim dated 22.01.2018); related ELRC Cause No. 815 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/468/eng@2025-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.