Oyugi v Surechill Africa Limited (Cause E528 of 2023) [2025] KEELRC 789 (KLR)
The bottom line
#A Kenyan court awarded an employee six months' salary because his employer announced redundancies before consulting staff, making the process unfair despite genuine business reasons.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the redundancy under Section 40(1) of the Employment Act
The redundancy was procedurally unfair: the CEO pre-determined the affected employees and positions at a meeting before consultation, no selection criteria were addressed, and notices were issued in quick succession to retroactively legitimise the decision.
The court examined whether the Respondent adhered to the seven steps in Section 40(1). The CEO announced the intention to declare redundancies complete with names and positions before discussions, showing the decision was predetermined. The Respondent never addressed the selection criteria, so the court concluded it never had regard to seniority in time, skill, ability and reliability. The rapid succession of notices on 5th, 6th and 11th May 2022 showed the employer tried to work the process backwards.
Substantive justification of the redundancy
The Respondent proved a valid and fair reason: poor business performance and restructuring confirmed a redundancy situation, admitted by the Claimant himself.
The Respondent showed it had sold only ten refrigerators out of a target of 1,200 between October 2021 and May 2022 and restructured its business strategy. The Claimant admitted there were economic challenges imposing financial constraints, which confirmed a genuine redundancy situation justifying the decision to declare redundancies. Substantive justification therefore stood, and only procedure failed.
Quantum of compensation for unfair termination
Six months' salary (Kshs. 2,100,000) awarded as sufficient compensation under Section 49(4) of the Employment Act, considering the employer's mitigation efforts.
In applying the Section 49(4) factors, the court took into account that the Claimant admitted economic challenges, that the uncontroverted evidence showed the Respondent offered a Mutual Separation Agreement of Ksh.1,408,035 and an alternative role of Business Development Officer, and that medical cover continued for one year after termination. These mitigated the award to six months' salary rather than the twelve months sought.
Legal principles established
#- An employer must comply with all the conditions in Section 40(1) of the Employment Act, including objective selection criteria, before terminating on account of redundancy.
- Last in First Out (LIFO) is a mandatory requirement under Kenyan redundancy law and parties cannot contract out of it.
- A redundancy is substantively justified where there is a valid and fair reason based on operational requirements of the employer, but the employer must show the termination is attributable to the redundancy.
- Announcing the affected employees and positions before consultation amounts to predetermination and violates the procedural fairness required by Section 40.
Court orders
#- 1.A declaration that the Claimant was unfairly terminated from the service of the Respondent
- 2.An order that the Respondent pays the Claimant 6 months salary as compensation for the unfair termination at Kshs. 2,100,000/-
- 3.The Respondent shall bear the costs of the suit
- Jurisdiction invoked
- Employment Act, 2007 (Sections 35, 40, 43(2), 49(4)); Article 41 of the Constitution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Oyugi v Surechill Africa Limited (Cause E528 of 2023) [2025] KEELRC 789 (KLR)", Case Analysis (2025). Statement of Claim dated 4th July, 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/789/eng@2025-03-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.