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ELRCDismissedNakuru Employment and Labour Relations Court Appeal (number not stated in the judgment extract)· [2025] KEELRC 1883 (KLR)

United Millers Limited v Mugo (Appeal E078 of 2024) [2025] KEELRC 1883 (KLR)

Employment and Labour Relations Court
27 June 2025
JRJames Rika
434 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 scaling down operations must still consult employees and apply selection criteria before declaring redundancies, or face compensation.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Nakuru (Rika J) dismissed the Appellant's appeal against a Trial Court decision awarding the Respondent, a former Machine Attendant declared redundant, the equivalent of 6 months' salary as compensation for unfair termination. The appeal was linked to United Millers Limited v Daniel Shiraku Okusimba, Nakuru E&LRC Appeal No. E076 of 2024, involving the same employer and substantially identical facts. The Appellant contended that it closed its Nakuru Refinery operations, where the Respondent worked, and therefore was not required to apply the selection criteria under Section 40(1)(c) of the Employment Act. The parties agreed the appeal be determined on the Record of Appeal and written submissions. The Court adopted as its own decision the reasoning in Appeal No. E076 of 2024, holding that the Trial Court did not err in its evaluation of evidence or its application of Section 40(1)(c). No evidence established that the plant was shut down; scaling down of operations beginning August 2021 suggested a skeleton workforce remained, and operations were not shown to have ceased when redundancy notices issued in October 2021. The redundancy was carried out unilaterally, through abrupt notices and internal memos, without the consultation the law requires. The appeal was accordingly declined and costs awarded to the Respondent. Judgment dated, signed and released electronically at Nakuru on 27th June 2025.

Key legal issues

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01

Whether closure of the workplace exempts an employer from the selection criteria under Section 40(1)(c) of the Employment Act

Holding

The Appellant did not establish that its plant was shut down altogether; scaledown implies continued operations, so selection criteria and consultation remained mandatory

Reasoning

The Court relied on its decision in the companion Appeal No. E076 of 2024 and adopted it wholesale. It found the Trial Court correctly applied Section 40(1)(c); the Appellant led no evidence of actual plant closure. Scaling down of operations from August 2021 suggested a skeleton manpower remained, and operations were not shown to have closed when redundancy notices issued in October 2021. The process was unilateral, violating the redundancy consultation principle.

p. 2

Legal principles established

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  • Where an employer scales down operations rather than closing them altogether, the selection criteria and consultation requirements under Section 40(1)(c) of the Employment Act still apply
  • An employer is obliged to consult employees throughout the redundancy process and may not simply communicate unilateral decisions

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 Claim) - subordinate court not named in the judgment
null
Jurisdiction invoked
Appeal against the decision of the Trial Court in an employment claim (statutory appellate jurisdiction of the Employment and Labour Relations Court; provision not 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 Mugo (Appeal E078 of 2024) [2025] KEELRC 1883 (KLR)", Case Analysis (2025). Nakuru Employment and Labour Relations Court Appeal (number not stated in the judgment extract). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1883/eng@2025-06-27

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