Were v Laborex Kenya Limited (Employment and Labour Relations Cause E6460 of 2020) [2025] KEELRC 2621 (KLR)
The bottom line
#Kenya's Employment Court ruled that a signed settlement agreement cannot shield an employer from a redundancy done without consulting the employee, awarding six months' salary.
What this practically means
#Executive summary
#Key legal issues
#Effect of the discharge agreement/signed final dues voucher
The discharge agreement does not extinguish the Claimant's claim where the redundancy process breached Section 40 of the Employment Act; the court may intervene notwithstanding the agreement
The Respondent argued, relying on Guha v Shah and Coastal Bottlers v Kimathi Mithika, that the Claimant accepted Kshs. 453,484.61 in full and final settlement and was estopped. The court acknowledged the discharge agreement dated 3rd July 2019 but held that a termination on account of redundancy effected without due process is a breach of rights which the court can correct on its own discretion, notwithstanding the agreement.
Existence of an employer-employee relationship and jurisdiction
The Respondent was the employer; its contention that it did not employ the Claimant and that the court lacked jurisdiction failed
The Respondent argued that Merck controlled the Claimant's interviews, job description, targets and tools, so no employment relationship existed with the Respondent and the court lacked jurisdiction under Section 12 of the ELR Act. The court examined the contract of employment and found it was issued by the Respondent, and the termination notice was likewise issued by the Respondent, so the contention was not merited.
Procedural fairness of the redundancy under Section 40 of the Employment Act
The termination was unfair and unjustified: consultations never took place and the process was suspect because the Claimant cleared from employment and his access was disabled before the purported termination date
The court found the Claimant had cleared from employment on 25th June 2019 and was discharged on 3rd July 2019, before the alleged termination notice, with his CP, mail and internet access disabled and medical card deactivated. The Respondent averred it paid full terminal dues including June salary, yet no salary was paid for July despite the notice running to 31st July. This implied effective termination on 25th June 2019, before any consultation, contrary to the Kenya Airways requirement of genuine prior consultation.
Remedies for unfair redundancy
Compensation of six months' salary awarded, taking into account the abrupt nature of the termination and the suffering after termination
The Respondent urged that the normal remedy for a genuine redundancy even where procedure was unfair is compensation under Section 49 of the Employment Act, and that the maximum 12 months is reserved for exceptional circumstances, the Claimant having served barely a year. The court, exercising discretion, awarded six months' salary at Kshs. 205,725/- per month, less statutory deductions, and costs with interest.
Legal principles established
#- Consultation with employees is an imperative requirement before termination on account of redundancy under Section 40 of the Employment Act
- A discharge agreement does not bar a claim where the termination on account of redundancy was effected without following due process; the court may correct the breach notwithstanding the agreement
- Where the contract of employment and the termination notice are issued by the employer, the employer cannot contend that no employment relationship existed
- Where an employee is cleared and paid out before the purported termination date and salary for the notice period is unpaid, the consultation envisaged by Section 40 never took place
Court orders
#- 1.A finding that the Claimant's termination on account of redundancy was unfair and unjustified for failure to follow due process under Section 40 of the Employment Act
- 2.Compensation of six months' salary amounting to Kshs. 1,234,350/- less statutory deductions (6 x 205,725/-)
- 3.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment
- Jurisdiction invoked
- Section 12 of the Employment & Labour Relations Act (employer-employee relationship established by the contract of employment issued by the Respondent)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Were v Laborex Kenya Limited (Employment and Labour Relations Cause E6460 of 2020) [2025] KEELRC 2621 (KLR)", Case Analysis (2025). Not stated in judgment (Memorandum of Claim dated 3rd November 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2621/eng@2025-09-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.