Gechiko & 21 others v Kapil Bakery Limited & another (Employment and Labour Relations Cause 175 of 2017) [2025] KEELRC 1294 (KLR)
The bottom line
#Kenyan court rules a bakery's redundancy was legal in reason but flawed in process, awarding 22 workers unpaid notice, severance and leave dues.
What this practically means
#Executive summary
#Key legal issues
#Compliance with section 40(1) of the Employment Act on redundancy procedure
The redundancy was lawful in reason but non-compliant with section 40(1): employees were not notified personally in writing, notice in lieu was not paid, and leave dues were not paid
The employer notified only the County Labour Officer of the intended closure; there was no personal written notification to each employee as required by section 40(1)(b), no payment of one month's notice under section 40(1)(f), and no evidence of payment of leave dues. The tabulation by the Respondents consisted only of severance pay and gratuity with no clarity or breakdown, and the labour officer's approval was not evidence of compliance before the court.
Entitlement to severance pay and other terminal dues
Each Claimant awarded severance at 15 days' pay per completed year, one month's salary in lieu of notice, one month's salary in lieu of the s.40(1)(b) notification, and pro-rata leave, less amounts already received
The court recalculated terminal dues using the salaries used by the Respondents, including pay in lieu of notice under sections 40(1)(b) and 40(1)(f) and pro-rata leave as confirmed by the County Labour Officer, while excluding overtime tabulations unsupported by evidence and deducting payments already received by each Claimant.
Overtime, rest day and public holiday pay
A nominal award of Kshs. 31,500 per Claimant for one year, covering unpaid rest days and public holidays at double rate
The Respondents paid a flat Kshs. 500 per day for overtime without distinguishing between normal working days (1.5 times rate) and rest days or public holidays (double rate). The Respondents made no comment on the overtime prayer. The court awarded an extra Kshs. 500 for one rest day per week plus 11 public holidays, totaling Kshs. 31,500, limited to one year.
Compensation for unfair termination
Declined because the redundancy was for a valid reason (closure of business)
Although the procedure under section 40(1) was not fully complied with, the reason for the redundancy - closure of business due to a harsh business environment - was valid and was not contested by the Claimants. Procedural lapses attracted the specific monetary remedies under section 40 rather than compensation for unfair termination.
Legal principles established
#- An employer bears the burden of demonstrating compliance with section 40(1) of the Employment Act by producing employment records before the court; a labour officer's word is not evidence of payment or compliance.
- Where an employee is not a member of a trade union, the employer must notify the employee personally in writing and the labour officer; a general notification does not satisfy section 40(1)(b).
- Overtime for work in excess of normal hours is payable at one and one-half times the normal hourly rate, and at twice the normal hourly rate for rest days and public holidays.
Court orders
#- 1.Award to each Claimant of the tabulated terminal dues set out in paragraph 48, comprising one month's salary in lieu of notice under section 40(1)(f), one month's salary in lieu of notification of redundancy under section 40(1)(b), severance pay at 15 days' pay per completed year of service, and pro-rata leave, less payments already received
- 2.Award of Kshs. 31,500 to each Claimant on account of overtime (one rest day per week and 11 public holidays at double rate) for one year
- 3.Declaration that the redundancy did not comply with section 40(1) of the Employment Act as regards notice and terminal dues
- 4.Respondents to pay the Claimants' costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and Employment Act (redundancy and terminal dues claims under section 40)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gechiko & 21 others v Kapil Bakery Limited & another (Employment and Labour Relations Cause 175 of 2017) [2025] KEELRC 1294 (KLR)", Case Analysis (2025). Memorandum of Claim dated 25th May, 2017 (Eldoret). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1294/eng@2025-05-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.