Wambugu v CMC Motors Group Limited & another (Cause 149 of 2020) [2025] KEELRC 2092 (KLR)
The bottom line
#Kenya's Employment Court ruled CMC Motors' redundancy was a sham because the company re-advertised the same job, awarding the ex-employee over Kshs 5.6 million.
What this practically means
#Executive summary
#Key legal issues
#Whether the redundancy complied with Section 40 of the Employment Act, 2007
The redundancy was procedurally and substantively flawed and therefore unlawful; the subsequent recruitment of a similar role undermined its bona fides and no fair selection criterion was shown.
Though the Respondents produced audited financial statements showing heavy losses, the advertisement for an Assistant Manager Credit shortly after dismissal suggested the position was not genuinely redundant. The Respondents also failed to demonstrate a fair selection criterion as required by Section 40(1)(c). The redundancy did not target positions but individuals, rendering it unlawful and the termination wrongful, unfair and unlawful.
Entitlement to unpaid commissions of Kshs. 27,879,792
The Claimant demonstrated involvement in securing a significant leasing deal and the Respondents did not disprove his entitlement to commission at 0.5%; amount to be verified and computed by the Commissioner for Labour.
Although the Claimant's job description did not include direct sales, internal memos suggested non-sales staff could earn commissions for leads. His involvement in securing the leasing deal was demonstrated and the Respondents failed to disprove entitlement. The court awarded commission at the agreed 0.5% rate subject to verification and computation of the actual amount.
Respondents' counterclaim for Kshs. 900,000 diverted from a client
The counterclaim succeeds; the Claimant, who filed no defence to it, must repay Kshs. 900,000.
The Claimant did not file a defence to the counterclaim. The Respondents' evidence showed that Kshs. 900,000 from a client, Seo & Sons Ltd, was diverted and that post-dated cheques issued by the Claimant were dishonoured and returned unpaid. The Claimant did not rebut the allegation, so the court found the counterclaim proved and ordered repayment.
Legal principles established
#- Redundancy does not exist where the business's need for the employee's services remains unchanged
- Redundancy must target positions, not individuals, and a fair selection criterion must be demonstrated
- Complimentary benefits attached to employment lapse upon termination
Court orders
#- 1.A declaration that the termination of the employment of the claimant by the Respondent was wrongful, unfair and unlawful
- 2.Twelve months' salary as compensation for unlawful termination: Kshs. 4,214,028.00
- 3.Severance pay: Kshs. 1,404,676.00 (total of claim Kshs. 5,618,704.00)
- 4.The Claimant shall pay the Respondent Kshs. 900,000.00 on the Counter Claim
- 5.The Commissioner for Labour, with liaison of the parties, to verify and compute the Claimant's unpaid commissions and report back to court within 120 days
- 6.The Commissioner of Labour to analyze and compute the repair costs owing by the Claimant, recoverable from terminal dues
- 7.Costs of the claim borne by the Respondent; costs of the Counter Claim borne by the Claimant
- 8.Mention on 26th November 2025 for a report on computation
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wambugu v CMC Motors Group Limited & another (Cause 149 of 2020) [2025] KEELRC 2092 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2092/eng@2025-06-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.