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ELRCDismissedNakuru E&LRC Appeal (number not stated in judgment)· [2025] KEELRC 1882 (KLR)

United Millers Limited v Otieno (Appeal E077 of 2024) [2025] KEELRC 1882 (KLR)

Employment and Labour Relations Court
27 June 2025
JRJames Rika
431 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer claiming total closure must still prove the shutdown and consult employees on redundancy selection criteria, or pay compensation.

What this practically means

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Executive summary

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This was an Employment and Labour Relations Court appeal at Nakuru by United Millers Limited against a Trial Court decision awarding the Respondent, a former Machine Attendant made redundant, the equivalent of six months' salary as compensation for unfair termination. The judgment bears the same factual and legal background as Nakuru E&LRC Appeal Number E076 of 2024 (United Millers Limited v. Daniel Shiraku Okusimba). The Appellant contended that it had closed down its operations at the Nakuru Refinery where the Respondent worked, and therefore was not required to apply the selection-criteria requirement in Section 40(1)(c) of the Employment Act. The parties agreed the appeal be determined on the record and written submissions. The Court adopted as its own decision its ruling in Appeal No. E076 of 2024, in which it held that the Trial Court had not erred in its evaluation of evidence and application of Section 40(1)(c). There was no evidence establishing that the Appellant's plant was shut down; the scaling down of operations from August 2021 suggested a skeleton manpower remained, and operations were not shown to have closed altogether when redundancy notices issued in October 2021. The redundancy process was carried out without consultation, through unilateral notices and internal memos. The appeal was declined and costs awarded to the Respondent. Judgment dated, signed and released electronically at Nakuru on 27th June 2025 by James Rika, Judge.

Key legal issues

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01

Application of Section 40(1)(c) of the Employment Act where an employer claims total closure

Holding

The Trial Court correctly found the selection-criteria requirement unsatisfied; the Appellant failed to prove the plant was shut down, and scaling down suggested a skeleton manpower remained, so consultation and selection criteria applied

Reasoning

The Court adopted its reasoning in the companion Appeal No. E076 of 2024. Scaling down of operations began in August 2021, implying continued operations with a skeleton manpower; operations were not shown to have closed down entirely by the time redundancy notices issued in October 2021. The employer only issued unilateral notices and internal memos without consulting employees, breaching the principle of redundancy consultation. The appeal was therefore declined and the Trial Court's award affirmed.

p. 2

Legal principles established

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  • Where an employer merely scales down operations rather than closing them altogether, it remains bound by Section 40(1)(c) of the Employment Act to consult employees on selection criteria for redundancy

Court orders

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  1. 1.The Appeal is declined on the same grounds given by the Court in Appeal No. E076 of 2024
  2. 2.Costs to the Respondent
On appeal from
Trial Court (Employment and Labour Relations Court, first instance)
not stated
Jurisdiction invoked
Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the Trial Court (statutory basis not expressly stated in the judgment)

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, "United Millers Limited v Otieno (Appeal E077 of 2024) [2025] KEELRC 1882 (KLR)", Case Analysis (2025). Nakuru E&LRC Appeal (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1882/eng@2025-06-27

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