Kiamokama Tea Factory Company Ltd v Bikundo (Appeal E061 of 2023) [2025] KEELRC 1757 (KLR)
The bottom line
#A Kenyan court ruled the tea factory's redundancy was unfair because it skipped key legal steps, though the worker's compensation was reduced.
What this practically means
#Executive summary
#Key legal issues
#Service of redundancy notice on the trade union
Service was not proven; the union did not acknowledge receipt of the notice nor take part in the process, rendering the notice ineffectual
Although the notice was dated 1st September 2022 and the disengagement occurred on 31st October 2022, satisfying the one-month period, the appellant bore the burden of proving service on the union under Section 40(1)(a). RWI conceded on cross-examination that there was no acknowledgement from the union, so service was not proven on a balance of probabilities.
Validity of the reason for redundancy
The appellant failed to prove that its wage bill was unsustainable; it produced no workforce data or financial statements, and subsequently advertised and hired other persons
The reason cited was staff rationalization on account of an unsustainable wage bill, but no financial statements or workforce records were availed. RWI admitted new employees were hired after the redundancy, and his written statement was silent on the nine positions said to be affected, undermining the claimed justification.
Selection criteria
The appellant did not demonstrate the criteria it applied; the issue was a legal imperative requiring no pleading
Section 40(1)(c) requires a criteria considering seniority, skill, ability and reliability. The appellant's argument that the trial court addressed an unpleaded issue failed because compliance with the statutory selection criteria is a matter of law. The trial court did not err in considering it.
Consultations
No consultations took place between the appellant and the claimant or the trade union
Courts have held consultation to be an integral part of the redundancy process. The appellant provided no evidence of any meeting with the claimant or union on the process or available options, and a lawful redundancy is proved by records of meetings and decisions made.
Quantum of compensation under Section 49(1)(c)
The award of 6 months' salary was reduced to 4 months' gross salary (Kshs.302,320) because the trial magistrate did not apply the Section 49(4) factors
The trial court's discretion was exercised without reference to the relevant circumstances in Section 49(4), justifying interference per the East Africa Underwriters principles. Considering the employee's roughly 10 years and 5 months of service, absence of misconduct, non-contribution to the termination and receipt of terminal benefits, 4 months' salary was fair.
Legal principles established
#- Section 40(1) of the Employment Act is couched in mandatory terms and prescribes the substantive and procedural processes to be complied with by an employer undertaking a redundancy
- A redundancy is a process, not an event, and requires consultation with the union, labour officer and the employee
- The requirement of a selection criteria is a matter of law and need not be pleaded
- Where the employer fails to prove compliance with Section 40(1), the purported redundancy becomes an unfair and unlawful termination
- An appellate court may interfere with a trial court's exercise of discretion where it failed to take into account relevant statutory factors
Court orders
#- 1.The award of Kshs.453,480 as compensation is set aside and substituted with Kshs.302,320.00
- 2.Other awards of the trial court are affirmed
- 3.Parties shall bear own costs of this appeal
- On appeal from
- Chief Magistrate's Court (Kisii)
- Kisii CMCERLC No. 1 of 2023
- Jurisdiction invoked
- First appellate jurisdiction over the subordinate court's judgment (Employment and Labour Relations Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kiamokama Tea Factory Company Ltd v Bikundo (Appeal E061 of 2023) [2025] KEELRC 1757 (KLR)", Case Analysis (2025). Kisumu ELRC Appeal (oldest appeal in the Kisumu ELRC Registry; appeal against Kisii CMCERLC No. 1 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1757/eng@2025-06-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.