Mueni & 5 others v Ponders Limited (Appeal E063 of 2023) [2025] KEELRC 525 (KLR)
The bottom line
#Kenya's Employment Court confirmed employers cannot dodge redundancy rules by calling a job loss 'termination' — six employees won Kshs 1.62 million.
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 trial court erred by finding that Appellants' termination of employment was not unfair and unlawful
- 2.Whether the Appellants were entitled to reliefs sought at the trial court
Key legal issues
#Whether the appellants' termination by one month's notice for 'change of some of its operations and organizational structure' was lawful under the contract or unfair under the Employment Act.
The reason fell within the statutory definition of redundancy; the respondent could not rely on the contract's notice clause to defeat the Employment Act, and the termination was unfair both substantively and procedurally.
Sections 41 and 43 impose statutory duties to give valid reasons and hear the employee, which override contractual terms. The stated reason amounted to redundancy under section 2. The respondent proved no operational changes, did not rebut allegations of replacement, gave no redundancy notice, no selection criteria, no severance or leave payment, and never notified the labour officer as required by section 40. The trial court erred in holding the contract justified termination.
Whether the appellants were entitled to the reliefs claimed.
Yes: six months' salary compensation each for unfair termination, accrued leave, and severance pay under section 40(g).
Having found unfair termination, the court awarded compensation under section 49, considering 4-6 years of service and the nature of termination. Accrued leave is a continuing injury and the claim was filed within 12 months of the August 2021 termination; the employer, custodian of records under section 74, adduced no evidence leave was taken or paid. Severance pay under section 40(g) was payable and no evidence showed payment.
Legal principles established
#- A contractual notice clause cannot override the statutory obligation to give valid reasons for termination and hear the employee before termination (sections 41 and 43, Employment Act).
- The Employment Act's minimum terms depart from the traditional 'termination at will' doctrine; contractual terms must conform to the Act's irreducible minimum.
- Termination letters must be judged by their substance and effect, not their heading: termination for change of operations and organizational structure amounts to redundancy under section 2 of the Employment Act.
- Section 40's redundancy procedure (notice to labour officer, selection criteria, severance pay, leave cash-out) is mandatory; failure to follow it renders the termination unfair.
- Accrued untaken leave is a continuing injury under section 90 of the Employment Act, claimable within 12 months of cessation.
Court orders
#- 1.Order of the trial court dismissing the appellants' claim for unfair termination set aside and judgment entered in favour of the appellants as prayed in their statement of claim
- 2.Judgment entered against the respondent as follows: Eunice Mbithe Mueni Kshs 250,000/=; Tina Mbithi Kshs 255,000/=; Juliana Nyokabi Muchiri Kshs 289,000/=; Mwende Mulwa Kshs 249,000/=; Victoria Mbithe Mutisya Kshs 289,000/=; Bonface Mutua Matheka Kshs 289,000/= (Total Kshs 1,621,000/=)
- 3.The appellants to have costs of the suit in the trial court and of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court (Honourable M.W Murage)
- null
- Jurisdiction invoked
- First appellate jurisdiction of the Employment and Labour Relations Court over the subordinate court judgment (Employment Act, cap 226; sections 2, 28, 35, 40, 41, 43, 45, 49, 74, 90)
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.
In conclusion the Court sets aside the order of the trial court dismissing the appellant's claim for unfair termination and substituting therefore with an order entering judgment against the respondent in favour of the appellants and as prayed in their statement of claim
The appellants will have costs of the suit in the trial court and this Appeal.
This is a statutory obligation which cannot be overridden by any contractual obligation.
The Appellants were given notice of termination but not redundancy notice. This, in the Court's was done to avoid complying with the requirements of the Act on redundancy.
the Respondent could not just terminate the services of the Appellants at will without giving valid reasons for termination
Issues in the judgment
#Garbled/typographical text in the framing of the second issue for determination
Section 40(1)(d) of the Employment Act is reproduced in the judgment with garbled text merging the provision with the Act's title
The judgment's opening paragraph is internally inconsistent, referring first to a single 'Appellant' and then to 'Appellants'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mueni & 5 others v Ponders Limited (Appeal E063 of 2023) [2025] KEELRC 525 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 8th May, 2024 (ELRC Appeal, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/525/eng@2025-02-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.