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ELRCPartially AllowedNot stated in the judgment

Ogila v Dawa Life Sciences Limited (Cause E598 of 2022) [2025] KEELRC 1144 (KLR)

Employment and Labour Relations Court
9 April 2025
6,433 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded Kshs. 3.87 million to a manager whose redundancy was validly reasoned but procedurally flawed and whose pay was discriminatorily low.

What this practically means

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Executive summary

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The Claimant, employed as a Production Development Manager from 1st December 2015 and later serving as Production Manager, was terminated on account of redundancy with effect from 27th January 2022. He claimed unfair termination, discrimination in remuneration vis-a-vis his predecessor and colleagues, compensation for unremunerated acting duties, underpayment, and unpaid leave. The Respondent defended the redundancy as a legitimate restructuring response to financial losses, denied discrimination, and relied on the contractual acceptance of salary terms. The Court framed three issues: unfairness of termination, breach of equality and non-discrimination, and entitlement to reliefs. It found the redundancy substantively justified because the Production Manager position fell off the new organizational structure and no replacement was proved, but procedurally unfair: the notice to the County Labour Office fell short of the 30-day requirement under Section 40(1) of the Employment Act, did not disclose the extent of the redundancy, and no pre-redundancy consultations were held despite the Respondent's commitment. Statutory terminal dues were properly paid. On discrimination, the salary differential with the Senior Production Manager predecessor was not discriminatory as the positions were distinct, but the Respondent failed to justify the Claimant being the lowest-paid senior manager, breaching Article 27(5) of the Constitution and Sections 5(2), 5(3) and 5(7) of the Employment Act. The Court awarded Kshs. 1,400,000.00 as compensatory damages (four months' salary), Kshs. 477,166.00 for 40.9 unlawfully denied leave days, and Kshs. 2,000,000.00 for discrimination, with interest and costs to the Claimant. Claims for 12 months' compensation, underpayment, and acting allowances were not granted.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Claimant's termination from employment was unfair and unlawful
  2. 2.Whether the Respondent breached the Claimant's right to equality and freedom from discrimination
  3. 3.Whether the Claimant is entitled to the reliefs sought

Key legal issues

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01

Substantive justification of the redundancy

Holding

The Respondent proved a valid and fair reason: the position of Production Manager fell off the new organizational structure and the assertion of replacement was unsubstantiated.

Reasoning

The Respondent exhibited the post-restructuring organizational structure, which the Claimant also exhibited, showing the Production Manager position no longer existed. Fourteen positions, including senior ones, were declared redundant. The Claimant's assertion that a replacement with similar skills was recruited was not supported by evidence. The Court therefore found substantive justification on a balance of probabilities.

p. 7
02

Procedural fairness of the redundancy under Section 40(1)

Holding

The notice to the County Labour Office fell short of the 30-day period and did not disclose the extent of the redundancies; there were also no pre-redundancy consultations, rendering the termination procedurally unfair despite valid reasons.

Reasoning

The notice to the Labour Office was issued on 28th December 2021 and received on 5th January 2022, short of the prescribed 30 days, and merely referred to 'certain positions' without specifying the number or category of affected employees. Although the Respondent promised consultations, no evidence showed they were held as required under the ILO Convention No. 158 framework. Statutory payments under Section 40(1)(e), (f) and (g) were, however, properly made.

p. 9
03

Discrimination in remuneration

Holding

The claim of discrimination based on comparison with the predecessor failed, but the Claimant proved unjustified differential treatment as the lowest-paid senior manager, in breach of Article 27(5) of the Constitution and Sections 5(2) and 5(3) of the Employment Act.

Reasoning

The predecessor's pay slip showed he was a Senior Production Manager, a distinct position, so the salary differential alone was not discrimination. However, an internal email dated 18th September 2020 acknowledged the Claimant was the lowest-paid senior manager in all teams. The Respondent advanced no valid justification, and under Section 5(7) the burden lay on it. Acceptance of the contract did not displace the statutory duty to eliminate discrimination.

p. 11
04

Accrued and reduced leave days

Holding

The Claimant was entitled to 24.9 leave days arbitrarily forfeited under the internal leave memo and 16 extra leave days (4 per year for 4 years) unlawfully reduced without consultation, awarded in the sum of Kshs. 477,166.00.

Reasoning

The internal memo of 14th September 2020 limiting carry-forward of leave to 7 days conflicted with Section 28(4) of the Employment Act, under which leave must be taken within eighteen months. The memo of 3rd April 2017 reducing leave from 25 to 21 days was made without consultation as required by Section 10(5). Both deductions were therefore unlawful.

p. 12
05

Selection criteria under Section 40(1)(c)

Holding

The selection criteria requirement applies only where a redundancy affects a class of employees; it was inapplicable as the Claimant was the sole occupant of the position.

Reasoning

The Claimant did not suggest that other employees served in the position of Production Manager. The Court read Section 40(1)(c) as applying where redundancy affects a number of employees in a particular class or category, and therefore held the requirement inapplicable in this case.

p. 9

Legal principles established

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  • Termination by redundancy must be both substantively justified and procedurally fair, including strict compliance with Section 40(1) of the Employment Act.
  • The notice to the labour office under Section 40(1) must state the extent of the intended redundancy, including the number of positions and category of employees affected.
  • An employer bears the statutory burden under Section 5(7) of the Employment Act to justify differential treatment of an employee; unexplained less favourable treatment amounts to discrimination.
  • Acceptance of contractual terms by an employee does not absolve an employer of its statutory duty to eliminate discrimination in employment policy or practice.
  • Forfeiture of accrued leave days is subject to Section 28(4) of the Employment Act; leave must be taken within eighteen months of the leave-earning period.
  • Variation of contractual entitlements (such as leave days) requires consultation with the employee and written notice under Section 10(5) of the Employment Act.

Court orders

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  1. 1.A declaration that the termination of the Claimant from employment was unfair and unlawful
  2. 2.The Claimant is awarded Kshs. 1,400,000.00 as compensatory damages for unfair termination being equivalent to four (4) months of his last salary
  3. 3.The Claimant is awarded unpaid leave (40.9 days) in the sum of Kshs. 477,166.00
  4. 4.The Claimant is awarded the sum of Kshs 2,000,000.00 being compensation for breach of his right to equality and freedom from discrimination guaranteed under Article 27(5) of the Constitution and Section 5(3) of the Employment Act
  5. 5.Interest on the total award of Kshs. 3,877,166.00 at court rates from the date of Judgment until payment in full
  6. 6.The Claimant shall have the costs of the suit

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court under Article 162(2) of the Constitution and the Employment Act, 2007 (not expressly cited in the judgment)

Relief refused

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Compensation for unlawful termination equivalent to 12 months' salary as Production Manager (Kshs. 6,117,948.00)

Termination was substantively justified; only four months' compensatory damages awarded for procedural unfairness

p. 11

Declaration of race/nationality discrimination and underpayment claim (Kshs. 10,935,621.00)

The predecessor was a Senior Production Manager whose position was distinct; the differential treatment found was not on the ground of race or nationality

p. 10

Compensation for acting as Production Manager from February 2016 to December 2017 (Kshs. 7,244,049.34)

Not awarded; the Respondent asserted the Claimant was under probation and later accepted the Production Manager position on the same terms by letter dated 2nd January 2018, and no award was made under this head in the final orders

General damages for discrimination, unfair labour practice, distress, frustration and witch hunt

Not granted as a separate head; discrimination compensated by a specific award of Kshs. 2,000,000.00

Costs

The Claimant shall have the costs of the suit.

Quotable passages

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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 the final analysis, the Claim is allowed and Judgment is entered in favour of the Claimant against the Respondent in the following manner: -
p. 12Disposition
The Claimant is awarded Kshs. 1,400,000.00 as compensatory damages for unfair termination being equivalent to four (4) months of his last salary.
p. 13Compensatory damages for procedural unfairness
The Claimant is awarded the sum of Kshs 2,000,000.00 being compensation for breach of his right to equality and freedom from discrimination
p. 13Discrimination compensation
The total award is Kshs. 3,877,166.00.
p. 13Total award
It is now settled that any termination of employment under redundancy ought to be both substantially justified and procedurally fair.
p. 7Redundancy standard
the issuance of the notice to the labour office is not just a routine requirement.
p. 8Section 40 notice to labour office
Therefore, in as much as the Claimant may have accepted contractual terms that were less favourable compared to his counterparts, there was a statutory duty on the part of the Respondent to ensure fairness across the board
p. 10Statutory duty against discrimination
Therefore, forfeiture of leave days does not arise subject to the same being taken within the 18 months period prescribed under Section 28(4) of the Employment Act.
p. 12Leave forfeiture

Issues in the judgment

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minor

The final orders state compensatory damages of Kshs. 1,400,000.00, whereas the Reliefs section had assessed compensatory damages at four months of the last salary computed against a salary figure that does not reconcile clearly with the stated last salary of Kshs. 350,000/= (4 months would be Kshs. 1,400,000 only at Kshs. 350,000 per month, which is consistent, but the Respondent had denied the Kshs. 350,000 figure).

minor

Internal arithmetic inconsistency in the judgment: the ordered unpaid leave is 40.9 days while the analysis found the Claimant entitled to 24.9 days plus 16 days (totaling 40.9), but the claim as pleaded computed 48.9 days; also the judgment twice refers to a contract 'dated 7th December 2021' when the employment commenced on 1st December 2015 and the contract signature is elsewhere stated as 24th October 2015.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ogila v Dawa Life Sciences Limited (Cause E598 of 2022) [2025] KEELRC 1144 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1144/eng@2025-04-09

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.