Karimi v Tradco Services Limited (Cause E096 of 2023) [2025] KEELRC 980 (KLR)
The bottom line
#A Kenyan employer's 'redundancy' targeting one employee without proper notices was ruled unfair, costing it over Ksh.2 million plus costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination by way of redundancy complied with Section 40 of the Employment Act
No. The redundancy notice to the claimant and the labour officer was not filed or served; the procedure under Section 40 was not followed, resulting in unfair termination.
The subject notice leading to termination on account of redundancy was never filed in court. Sections 41 and 40(1) of the Employment Act are mandatory and require notices indicating the reasons and extent of redundancy to both the employee and the labour officer at least a month before termination. The claimant remained at work until 15 March 2023 with no clarity on her last working date, and terminal dues were only paid after third-party intervention. Following Court of Appeal authority, failure to issue the required notices rendered the termination procedurally unfair.
Whether a redundancy can target a single employee
No. Redundancy cannot affect a single employee; targeting one employee under the guise of restructuring is a sham and amounts to unfair labour practice.
Relying on Keen Kleeners, Agnes Ongadi, Jane I Khalachi and the German School Society cases, the court held that redundancy cannot affect a single employee. The respondent never outlined the extent of the redundancy. Wambugu admitted the project manager position in Nairobi was available, yet the claimant was not returned to it because the respondent did not wish to pay relocation costs. Declaring a redundancy to avoid relocation costs, under the guise of third-party directions, amounted to unfair labour practices and the redundancy was a cover-up.
Effect of expiry of the fixed-term contract without renewal
Upon lapse of the one-year contract without renewal or communication, the claimant's continued employment on the same position and salary became protected employment under the Employment Act.
Parties may lawfully enter fixed-term contracts, and the one-year contract of 26 July 2021 was valid. However, upon its expiry on 1 August 2022 there was no renewal or communication, yet the claimant remained in the same position at the same salary. Without a written contract governing the continuing engagement, the claimant fell under the protection of Sections 35, 41, 43 and 45 read with Section 40 of the Employment Act, so any termination had to follow statutory procedure.
The deduction of Ksh.78,082 for alleged unworked days
The deduction was unfair; allegations touching on absence from work fall under Section 41 and required notice and a hearing before deduction.
A redundancy relates purely to the position no longer being available, not to the employee's conduct or attendance. If the deduction rested on alleged non-attendance, Section 41 required that the claimant be notified and given an opportunity to respond before any deduction. Deducting the sum and withholding terminal dues further affirmed unfair labour practices, so the full Ksh.78,082 was found due and payable.
Assessment of compensation for unfair termination
Compensation of 10 months' gross salary (Ksh.1,450,000) awarded under Sections 45 and 49 of the Employment Act.
Under Section 45(5), the court considered the lapse in due process, the unfair labour practices, the refusal to return the claimant to her original place of employment, and the failure to pay terminal dues until third-party intervention. The cumulative impact of the relocation and denial of the right to earn a living could not be quantified in monetary terms, and the maximum of 12 months was held available; 10 months was found justified in the circumstances.
Legal principles established
#- Termination of employment under Sections 41, 44 or 40 of the Employment Act requires prior notice, and Sections 41 and 40(1) are couched in mandatory terms
- Redundancy notices must indicate the extent and reasons for the redundancy and must issue to both the employee and the labour officer
- Redundancy cannot affect a single employee
- Where a fixed-term contract lapses and the employee continues in the same position and salary without renewal, the employment becomes protected under the Employment Act
Court orders
#- 1.A declaration that there were unfair labour practices and unfair termination of the claimant's employment by the respondent
- 2.10 months' compensation Ksh.1,450,000
- 3.Notice pay Ksh.145,000
- 4.Salary for February and 15 days in March 2023 Ksh.217,500
- 5.Leave pay Ksh.290,000
- 6.Unfair deduction Ksh.78,082
- 7.The dues shall be paid less Ksh.331,025 already received
- 8.The claimant is awarded the costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 28, 35, 40, 41, 43, 45, 49) - first-instance claim
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Karimi v Tradco Services Limited (Cause E096 of 2023) [2025] KEELRC 980 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/980/eng@2025-03-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.