Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedKisumu ELRC Appeal (oldest appeal in the Kisumu ELRC Registry; appeal against Kisii CMCERLC No. 1 of 2023)· [2025] KEELRC 1757 (KLR)

Kiamokama Tea Factory Company Ltd v Bikundo (Appeal E061 of 2023) [2025] KEELRC 1757 (KLR)

Employment and Labour Relations Court
18 June 2025
3,714 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

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

#
This was a first appeal to the Employment and Labour Relations Court at Kisumu against the judgment of Hon. S. N. Abuya CM delivered on 25th October 2023 in Kisii CMCERLC No. 1 of 2023, in which the trial magistrate found that the appellant employer had not complied with Section 40 of the Employment Act in declaring the respondent redundant and awarded six months' salary as compensation. The appellant raised seven grounds, compressed into four: service of the redundancy notice on the union, selection criteria, fairness of the termination, and the award. The court, reiterating its first-appellate duty to re-evaluate the evidence, found that although the one-month notice period was met, the appellant failed to prove service of the notice upon the trade union, which neither acknowledged receipt nor participated in the process. The appellant also failed to prove that its wage bill was unsustainable, producing no workforce data or financial statements, and even hired new employees after the redundancy. No selection criteria were demonstrated, and no consultations took place. The court held that the selection criteria requirement is a matter of law needing no pleading. The finding of unfair and unlawful termination was therefore affirmed. On quantum, the court found the trial magistrate had not applied the Section 49(4) factors, justifying interference, and substituted the award of Kshs.453,480 with four months' gross salary, Kshs.302,320. Other awards of the trial court were affirmed and each party was ordered to bear its own costs of the appeal. The appeal was declared partially successful.

Key legal issues

#
01

Service of redundancy notice on the trade union

Holding

Service was not proven; the union did not acknowledge receipt of the notice nor take part in the process, rendering the notice ineffectual

Reasoning

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.

p. 5
02

Validity of the reason for redundancy

Holding

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

Reasoning

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.

p. 5
03

Selection criteria

Holding

The appellant did not demonstrate the criteria it applied; the issue was a legal imperative requiring no pleading

Reasoning

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.

p. 5
04

Consultations

Holding

No consultations took place between the appellant and the claimant or the trade union

Reasoning

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.

p. 6
05

Quantum of compensation under Section 49(1)(c)

Holding

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

Reasoning

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.

p. 7

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. 1.The award of Kshs.453,480 as compensation is set aside and substituted with Kshs.302,320.00
  2. 2.Other awards of the trial court are affirmed
  3. 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.