Karani v ISL Kenya Limited (Employment and Labour Relations Appeal 005 of 2020) [2025] KEELRC 1639 (KLR)
The bottom line
#Kenya's Employment Court confirmed that skipping the mandatory redundancy procedure makes a termination unlawful, even if the employee signed a 'full and final settlement' payment.
What this practically means
#Executive summary
#Key legal issues
#Date of employment
The Appellant failed to adduce sufficient evidence on the date of employment, and the issue was not material to the outcome since leave was granted for the two years worked.
The Appellant claimed employment from February 2015 while the Respondent said July 2015. The court found the evidence insufficient and held that a finding either way would not materially affect the outcome, as leave had been awarded for two years of service and no prejudice arose from the trial court's indecision.
Whether the termination was an unlawful and unfair redundancy
The termination was a redundancy effected without compliance with section 40 of the Employment Act and was therefore un-procedural and unlawful.
The Respondent pleaded and evidenced redundancy following closure of business. Section 40 sets out mandatory conditions precedent: one month's notice to the labour officer and to the employee, criteria for selection, payment of leave days, notice pay and severance. The notice to the labour officer was issued the same day the Claimant was denied access to the workplace; the Claimant was never notified a month in advance and was not paid terminal dues at the time of redundancy. The payment of Kshs.10,000 did not conform to section 40(1).
Whether the Kshs.10,000 full and final settlement payment estopped the Appellant from claiming further dues
No estoppel arises because sections 3(6), 26(1) and 40(1) of the Employment Act are mandatory minimum terms that cannot be waived by agreement.
The Respondent argued the Appellant accepted Kshs.10,000 in full and final settlement by mutual agreement and was estopped. The court held that statutory minimum conditions cannot be relinquished by agreement, such agreements being null and void, so the discharge voucher could not shield an un-procedural redundancy.
Legal principles established
#- Compliance with section 40 of the Employment Act before declaring an employee redundant is mandatory
- Statutory minimum terms of employment cannot be contracted out of; an agreement to pay less than the statutory minimum is null and void
- A discharge voucher or full-and-final-settlement payment does not estop an employee from claiming statutory benefits where the redundancy was un-procedural
- An employer cannot rely on its own failure to comply with the law to deny employees their statutory benefits
Court orders
#- 1.Declaration that the termination of the Appellant's employment was unfair
- 2.Award of one month's salary in lieu of notice of Kshs. 12,584
- 3.Upholding the award of unpaid/untaken leave for the duration of service of Kshs. 17,617.60
- 4.Award of compensation of 4 months' salary at Kshs. 58,080 under section 49(4) of the Employment Act
- 5.Total award of Kshs. 88,281.60
- 6.Refusal of house allowance claim (daily rate inclusive of house allowance)
- 7.Refusal of service/gratuity pay (NSSF contributions paid)
- 8.Respondent to bear the Appellant's costs of the appeal; costs award in the lower court upheld
- 9.The lower court decision reviewed to the extent set out in the judgment
- On appeal from
- Chief Magistrates' Court at Mavoko
- ELRC No. 22 of 2019
- Jurisdiction invoked
- Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the Chief Magistrates' Court (Employment and Labour Relations Court Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Karani v ISL Kenya Limited (Employment and Labour Relations Appeal 005 of 2020) [2025] KEELRC 1639 (KLR)", Case Analysis (2025). ELRC Appeal from Mavoko CMCC (ELRC) No. 22 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1639/eng@2025-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.