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ELRCPartially AllowedNot stated in the judgment text provided· [2025] KEELRC 1372 (KLR)

Gachuhi v Track and Trace Limited (Employment and Labour Relations Cause 415 of 2021) [2025] KEELRC 1372 (KLR)

Employment and Labour Relations Court
9 May 2025
6,332 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~25 min to read original · ~4 min brief

The bottom line

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An employer won on the reason for redundancy but lost because it skipped the mandatory notice steps under Kenyan employment law.

What this practically means

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Executive summary

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The claimant, formerly employed as Relationship Manager and later Regional Sales Manager, was terminated on account of redundancy with effect from 4th December 2020 following a company restructuring. She claimed breach of Article 41 rights, twelve months' salary as damages, unpaid final dues of Kshs. 606,337, commission of Kshs. 1,329,000 for a Kenya Power speed governors tender, costs and interest. The respondent maintained that the claimant was notified of the restructuring by emails of 5th October and 3rd December 2020, that her performance was off-track per her own self-appraisals, that the labour office was notified, and that terminal dues of Kshs. 799,583 before statutory deductions were agreed, of which Kshs. 400,000 was paid after filing suit. The court held that the redundancy was substantively justified on a balance of probability, given the claimant's own self-appraisals showing off-track performance and the company's COVID-19 losses, but that the termination was procedurally unfair: no one month's notice of intended redundancy was given, and the notice to the labour office was issued on 19th December 2020, after the termination, contrary to section 40(1) of the Employment Act. The court entered judgment for the claimant for Kshs. 130,000 as compensation for lack of procedural fairness (notice payment), and Kshs. 166,204 as outstanding terminal dues (after acknowledging Kshs. 400,000 paid and statutory deductions of Kshs. 233,379), with interest and costs of the suit. The commission claim of Kshs. 1,329,000 was declined for lack of evidence after the claimant withdrew the notification of award of the Kenya Power tender. A 30-day stay of execution was granted.

Key legal issues

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01

Whether termination on account of redundancy was procedurally fair

Holding

Not procedurally fair - no one month's notice of the intended redundancy was given; the notice to the labour office issued after termination

Reasoning

The only communication about restructuring was the email of 3rd December 2020, with termination taking effect on 4th December 2020 and the letter issued on 17th December 2020. Section 40(1)(a)/(b) required notice of not less than one month to the employee and the labour officer. The notice to the labour office was dated 19th December 2020, after termination. There was also no disclosure of selection criteria or consultation as required by the Kenya Airways principles.

p. 7
02

Whether the redundancy was substantively justified

Holding

Justified - the respondent proved on a balance of probability that the department and the claimant's performance were off-track and the business decision was genuine

Reasoning

The claimant's own self-appraisals of 6th November 2020 and 1st December 2020 showed team and individual performance off-track/red. RW testified the company suffered COVID-19 losses and scrapped off loss-making units. Although the 92% self-rating was not countersigned, the court accepted that the redundancy reason was valid under section 45(2)(b)(ii) as based on operational requirements.

p. 11
03

Whether the claimant was entitled to commission of Kshs. 1,329,000 for the Kenya Power tender

Holding

Declined for lack of evidence after the claimant withdrew the notification of award of tender

Reasoning

Section 107 of the Evidence Act places the burden on the person asserting a fact. The claimant filed a supplementary list containing the notification of award of tender but withdrew it at the hearing. Without that document she had no proof that the tender was issued or that commission remained unpaid. The employer denied the claim and pointed to payslips showing commissions were paid when due.

p. 13
04

Whether the claimant was entitled to balance of terminal dues

Holding

Allowed in part - Kshs. 166,204 outstanding after acknowledged payment of Kshs. 400,000 and statutory deductions of Kshs. 233,379

Reasoning

It was not disputed that Kshs. 400,000 was paid post-filing. Statutory deductions of PAYE, NHIF and NSSF totalled Kshs. 233,379. The court computed the outstanding amount as Kshs. 166,204 and allowed it with interest at court rates from the date of filing suit.

p. 12

Legal principles established

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  • For a redundancy termination to be lawful it must be both substantively justified and procedurally fair under section 40 of the Employment Act
  • Notice to the labour officer of an intended redundancy must issue not less than one month before the date of termination; notice given after termination does not comply with section 40(1)
  • The employer bears the burden of proving the reason for termination under section 43, and fairness requires both substantive and procedural fairness under sections 45 and 41

Court orders

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  1. 1.Compensation for lack of procedural fairness of notice payment of Kshs. 130,000 payable with interest from date of judgment
  2. 2.Outstanding terminal dues of Kshs. 166,204 payable with interest at court rates from date of filing suit
  3. 3.Costs of the suit to the claimant
  4. 4.Stay of execution of 30 days granted

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41; Article 10
  • Employment ActSections 2, 40(1)(a)-(g), 41, 43(1), 43(2), 45(1), 45(2)
  • Evidence ActSections 107, 108, 109

Cases cited (4)

  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Mwita v Fep Holdings Limited (Employment and Labour Relations Cause 79 of 2020)
    [2023] KEELRC 2044 (KLR) (24 August 2023)
  • Jane Wairimu Machira v Mugo Waweru and Associates
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Article 41 of the Constitution (fair labour practices)

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, "Gachuhi v Track and Trace Limited (Employment and Labour Relations Cause 415 of 2021) [2025] KEELRC 1372 (KLR)", Case Analysis (2025). Not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1372/eng@2025-05-09

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