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ELRCPartially AllowedNot stated in judgment (Memorandum of Claim dated 3rd November 2020)· [2025] KEELRC 2621 (KLR)

Were v Laborex Kenya Limited (Employment and Labour Relations Cause E6460 of 2020) [2025] KEELRC 2621 (KLR)

Employment and Labour Relations Court of Kenya
29 September 2025
6,805 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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The Claimant, a medical representative engaged to promote Merck Serono products, sued the Respondent (the entity that issued his employment contract and termination notice) challenging his June 2019 termination on account of redundancy. He sought a declaration that the redundancy notice constituted unlawful and unfair termination, damages, and up to twelve months' compensation under the Employment Act. The Respondent resisted on three fronts: that the Claimant signed a discharge agreement upon receiving Kshs. 453,484.61 in full and final settlement and was estopped; that no employer-employee relationship existed with it, Merck being the true employer, so the court lacked jurisdiction; and that the redundancy was substantively justified and procedurally fair, with consultations held and statutory notices issued. The court rejected the jurisdictional objection, finding the contract of employment and the termination notice were both issued by the Respondent. Although acknowledging the discharge agreement, the court held that a termination on account of redundancy effected without due process breaches the Claimant's rights which the court may correct on its own discretion, notwithstanding any agreement. Relying on the Kenya Airways case on the imperative of consultation before redundancy, the court found the process suspect: the Claimant had cleared from employment on 25th June 2019, his access credentials were disabled, and he received no July salary despite the notice running to 31st July, implying effective termination before any consultation. The termination was found unfair and unjustified. The court awarded six months' salary (Kshs. 1,234,350/- less statutory deductions), with costs and interest from the date of judgment. The claim thus succeeded partially: compensation was awarded but not the maximum twelve months sought.

Key legal issues

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01

Effect of the discharge agreement/signed final dues voucher

Holding

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

Reasoning

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.

p. 12
02

Existence of an employer-employee relationship and jurisdiction

Holding

The Respondent was the employer; its contention that it did not employ the Claimant and that the court lacked jurisdiction failed

Reasoning

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.

p. 12
03

Procedural fairness of the redundancy under Section 40 of the Employment Act

Holding

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

Reasoning

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.

p. 12
04

Remedies for unfair redundancy

Holding

Compensation of six months' salary awarded, taking into account the abrupt nature of the termination and the suffering after termination

Reasoning

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.

p. 13

Legal principles established

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  • 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

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  1. 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. 2.Compensation of six months' salary amounting to Kshs. 1,234,350/- less statutory deductions (6 x 205,725/-)
  3. 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

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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, "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.