Osumba v Living Walls Africa Limited & another (Cause E395 of 2023) [2025] KEELRC 1004 (KLR)
The bottom line
#A Kenyan court awarded an employee over Kshs 600,000 after her employer's 'redundancy' failed to follow basic legal procedures.
What this practically means
#Executive summary
#Key legal issues
#Who was the Claimant's employer?
The Claimant was an employee of the 2nd Respondent, not the 1st Respondent
Applying the Four-fold, Economic Reality and Multi-factor tests, the Court found the 2nd Respondent issued the contract, controlled salary and employment, sent the Claimant on furlough leave, and terminated her employment. Email correspondence used the 2nd Respondent's domain. The P9 form bearing the 1st Respondent's name, with no payslips or work directives supporting it, was insufficient to establish an employment relationship with the 1st Respondent.
Was the termination substantively fair?
Termination on grounds of redundancy was substantively unfair
The reason given was that the 2nd Respondent did not require an Assistant Technical Officer of her calibre. Having not entered appearance or filed a response, the 2nd Respondent adduced no evidence to justify the redundancy, and therefore failed to discharge its evidential burden under Section 45(2)(a) & (b)(ii) of the Employment Act.
Was the termination procedurally fair?
Termination was procedurally unfair for non-compliance with Section 40(1) of the Employment Act
The letter of 31st May 2022 notified the Claimant of redundancy effective the same day, whereas Section 40(1)(b) requires at least one month's written notice to the employee and the labour officer. There was also no evidence that the Ministry of Labour was notified or that statutory dues were paid. The selection-criteria requirement under Section 40(1)(c) was not applicable as no other employees in the Claimant's category were shown to exist.
Salary reduction during furlough leave
The unilateral 50% salary reduction was unlawful as the Claimant did not consent
There was no evidence the Claimant consented to the reduction of her salary when sent on furlough leave. A unilateral variation of the contract of service is prohibited by Section 10(5) of the Employment Act, entitling the Claimant to the withheld salary.
Entitlement to the reliefs sought
Claimant awarded compensatory damages, notice pay, severance, service pay, leave pay and withheld salary against the 2nd Respondent
The Court awarded five months' gross salary as compensation considering the length of employment and circumstances of termination, plus notice pay, severance for one completed year, unutilised leave days, and the withheld May 2022 and furlough salary. Service pay succeeded as uncontroverted since the 2nd Respondent did not participate. Costs and interest followed the award.
Legal principles established
#- The identity of the employer may be established beyond the statutory definitions using the Four-fold, Economic Reality and Multi-factor tests
- Redundancy must be both substantively justified and procedurally fair, with compliance with Section 40(1) of the Employment Act
- An employer bears the evidential burden of proving a valid and fair reason for termination
Court orders
#- 1.Judgment entered in favour of the Claimant against the 2nd Respondent only
- 2.Compensatory damages of Kshs 381,665.00 being five months' gross salary
- 3.One month's salary in lieu of notice of Kshs 76,333.00
- 4.Severance pay of Kshs 38,166.50 for one complete year of service
- 5.Service pay of Kshs 38,166.50
- 6.Unpaid leave days of Kshs 41,625.00
- 7.Withheld salary during furlough leave and May 2022 of Kshs 43,692.00
- 8.Interest at court rates on (a) from date of judgment; on (b)-(f) from date of filing suit, until payment in full
- 9.Claimant awarded costs of the Claim
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Osumba v Living Walls Africa Limited & another (Cause E395 of 2023) [2025] KEELRC 1004 (KLR)", Case Analysis (2025). Statement of Claim dated 8th May 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1004/eng@2025-03-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.