Banking Insurance and Finance Union (Kenya) v Inoi Farmers Co-operative Society Limited (Cause E041 of 2024) [2025] KEELRC 2257 (KLR)

The court held that justification for redundancy is the existence of a redundancy situation, which is best judged by the employer with managerial prerogative and business experience. The respondent contended the wage bill based on the Wages (General) Order rather than the Wages (Agricultural Industry) Order was unsustainable. Although the CBA was properly checked by the Ministry of Labour and registered, the court cannot force an employer to retain employees it cannot afford to pay, and noted contentions of collusion in CBA negotiations.

Section 40(1)(a) requires that where employees are union members, notice of the reasons for and extent of the intended redundancy be given to the union and the labour officer at least one month before termination. Relying on De La Rue and Kenya Airways, the court emphasised that the notices are not merely informational but are meant to trigger consultation to avert or minimise terminations. The legal burden of serving proper notices lay on the respondent, which it failed to discharge.

Since the notices were suspended by consent and the employees were still working and being paid, the court declared the intended terminations unlawful and null and void. It prohibited the unlawful redundancy but stressed that the employer retains the right to declare redundancies in future if the correct procedure is followed, as the court or a trade union cannot run the business of employers.

The court noted the respondent is represented by an advocate presumed to know the law and cannot be muzzled from undertaking redundancies, but must follow the law and international labour standards. It cannot choose a trade union for its employees as that would violate Article 41(2)(c) of the Constitution, and the law provides a procedure for revoking recognition agreements. A registered CBA can be amended by a subsequent collective agreement to avert redundancies.