Nzwili v Zheng Hong Limited (Appeal E105 of 2024) [2025] KEELRC 2451 (KLR)
The bottom line
#Kenya's Employment Court ruled that a mass termination blamed on a KRA shutdown was actually a redundancy, making it unfair and entitling the worker to notice, severance and compensation.
What this practically means
#Executive summary
#Key legal issues
#Whether the reason for termination was valid and the termination lawful
The stated reason (KRA shutdown of the respondent's operations) was not substantiated; the termination amounted to redundancy, requiring compliance with section 40 of the Employment Act
The reason given for termination was that KRA had shut down the respondent's operations, but no reasons for the shutdown were provided. KRA only shuts down businesses for breach of tax law, in which case the respondent brought it upon itself. Since more than 100 employees were terminated, the separation was not disciplinary but a redundancy, and the section 40 procedure had to be followed.
Whether the procedure for redundancy was followed
No evidence was adduced of compliance with section 40; the termination was therefore unfair under section 45
Section 40 of the Employment Act prescribes the procedure for redundancy, including notice and severance. The court found no evidence that this procedure was followed. Consequently, the termination was substantively and procedurally unfair, and the appellant was entitled to notice pay, severance pay and compensation.
Principles for a first appellate court reviewing a trial court's judgment
The court is entitled to re-evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses
Relying on Gitobu Imanyara & 2 others v Attorney General, the court restated that an appeal is by way of retrial: the appellate court must reconsider the evidence, evaluate it itself and draw its own conclusions, bearing in mind that it did not see or hear the witnesses.
Legal principles established
#- Where termination of employment arises from closure of operations by KRA rather than employee fault, it amounts to redundancy and section 40 of the Employment Act must be followed
- Termination effected without following the redundancy procedure in section 40 is unfair under section 45 of the Employment Act
Court orders
#- 1.One month's notice in lieu of pay of Kshs. 19,000/-
- 2.Severance pay at 15 days' salary for each complete year of service (4 years) of Kshs. 38,000
- 3.Four months' salary as compensation for unfair termination of Kshs. 76,000/- (total Kshs. 133,000)
- 4.Costs of the appeal awarded to the appellant
- 5.Claims for public holidays pay and leave refused
- On appeal from
- Milimani Chief Magistrate's Court
- not_stated
- Jurisdiction invoked
- First appeal from the trial magistrate's court (Employment and Labour Relations Court, Appeals Division)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nzwili v Zheng Hong Limited (Appeal E105 of 2024) [2025] KEELRC 2451 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 12th March, 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2451/eng@2025-09-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.