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ELRCPartially AllowedELRC Cause (Memorandum of Claim filed 16 June 2023)· [2025] KEELRC 1241 (KLR)

Wanja v North Coast Medical Hospital (Employment and Labour Relations Cause E003 of 2023) [2025] KEELRC 1241 (KLR)

Employment and Labour Relations Court
30 April 2025
OKOcharo Kebira
3,081 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~12 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled the redundancy was a sham and awarded a Marketing Manager six months' salary, severance, notice pay and costs.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as Marketing Manager from 2 March 2020 at a monthly salary of KShs. 102,813, had her employment terminated by letter dated 31 January 2023 on the ground of redundancy, effective 1 February 2023. She sued, contending the termination was an unfair dismissal disguised as redundancy, contrary to section 40 of the Employment Act. The Respondent maintained that it restructured and dissolved its Marketing Department following a performance improvement plan, and notified the Labour Office before terminating, computing final dues and preparing a certificate of service. The court framed three issues: whether there was a genuine redundancy situation; whether the termination was fair; and the reliefs payable. It held that an employer must do more than assert restructuring, producing evidence of the conception, rationale, deliberations, decision and implementation of the restructuring. The Respondent's pleadings and evidence were overly general and ambiguous, with no document showing the Marketing Department was restructured. The Claimant had been accused of poor performance yet terminated under the pretext of redundancy; the court found the asserted redundancy a mere pretence. Procedurally, no redundancy notice was issued or served, no consultation took place, and the 31 January 2023 letter resembled a termination notice, contrary to section 40 and the consultation requirement implied therein. The court declared the termination substantively and procedurally unfair and awarded six months' gross salary (KShs. 616,878) under section 49(1)(c), together with severance pay of KShs. 177,945.58, one month's notice pay of KShs. 102,813 and KShs. 15,355.85 for untaken leave on admission. It ordered a certificate of service within 30 days, plus costs and interest.

Key legal issues

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01

Whether there was a genuine redundancy situation

Holding

There was no authentic redundancy; the asserted redundancy was a mere pretence disguising an unfair termination on grounds of alleged poor performance

Reasoning

The court held that an employer must provide reasonable details of a restructuring, especially when disputed. The Respondent's pleadings and evidence were overly general and ambiguous, with no document showing the Marketing Department was restructured, no reference to other departmental staff, and no evidence of consultations. The Claimant was accused of inadequate performance yet terminated under the pretext of redundancy, leading the court to find the redundancy a pretence.

p. 5
02

Whether the termination was procedurally fair under section 40 of the Employment Act

Holding

The termination was procedurally unfair: no redundancy notice was issued or served, and no consultation preceded the termination

Reasoning

Section 40 prescribes mandatory steps including notification of the employee and the Labour Officer at least one month before termination, and payment of notice and severance. The court found the letter of 31 January 2023 resembled a termination letter rather than a redundancy notice, gave barely 24 hours' notice, and that consultation, which the law implies, never took place. The minutes of 15 December 2022 concerned performance evaluation, not redundancy.

p. 6
03

Whether the Claimant was entitled to compensation and the quantum payable

Holding

The Claimant was awarded six months' gross salary as compensation under section 49(1)(c), plus severance, notice pay and leave pay admitted by the Respondent

Reasoning

Compensation under section 49(1)(c) is discretionary, with twelve months as the maximum. Considering that the grounds for termination were obscured, that the Claimant did not contribute to the termination, the length of service, and the Respondent's failure to meet statutory requirements of substantive and procedural fairness, the court awarded six months' gross salary. Judgment on admission was entered for severance pay, notice pay and untaken leave.

p. 7

Legal principles established

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  • Redundancy is a no-fault termination and the Employment Act places particular obligations on employers to ensure affected employees are treated fairly
  • An employer must do more than merely assert restructuring; it must lead evidence of the conception, rationale, deliberations, decision and implementation of the restructuring
  • Consultation with the employee prior to declaring redundancy is implied by section 40(1)(a) and (b) of the Employment Act and is also required by Article 47 of the Constitution
  • The employer bears the onus of demonstrating that a legitimate redundancy situation existed

Court orders

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  1. 1.A declaration that the termination of her employment was procedurally and substantively unfair.
  2. 2.Compensation for unfair termination pursuant to the provisions of section 49[1][c] of the Employment Act, six [6] months' gross salary, KShs. 616,878.
  3. 3.Severance pay, KShs. 177,945.58.
  4. 4.One month's salary in lieu of notice, KShs. 102,813.
  5. 5.Compensation for earned but unutilised leave days……. KShs. 15,355.85
  6. 6.A certificate of service is to be issued to the Claimant within 30 days of this judgment.
  7. 7.Costs of the suit
  8. 8.Interest on the awarded sums above, at court rates from the date of this judgment till full payment.
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (first-instance employment cause)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Wanja v North Coast Medical Hospital (Employment and Labour Relations Cause E003 of 2023) [2025] KEELRC 1241 (KLR)", Case Analysis (2025). ELRC Cause (Memorandum of Claim filed 16 June 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1241/eng@2025-04-30

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