Mwarangu v Cathmed Limited (Cause E003 of 2024) [2025] KEELRC 2681 (KLR)
The bottom line
#Kenya's Employment Court ruled that a redundancy is unlawful unless every step in section 40 of the Employment Act is followed and genuinely justified.
What this practically means
#Executive summary
#Key legal issues
#Burden of proof in unfair termination claims
The employee must first prove prima facie unfair termination, after which the evidential burden shifts to the employer
Section 47(5) places a distinct legal burden on the employee to demonstrate that an unlawful termination occurred. Once discharged, the evidential burden shifts to the employer to prove reasons for termination under section 43, procedural compliance under section 41, and validity and fairness of the reasons under section 45. The Respondent's inconsistent position that termination was both at the Claimant's initiative and on account of redundancy was legally untenable and prevented it from discharging its burden.
Procedural fairness of redundancy under section 40
The termination was procedurally unfair - the 15th April 2024 letter was a termination letter, not the consultative notice contemplated by section 40(1)(b), and the Labour Officer's notice was served late
The notice under section 40(1)(b) must give rise to consultation. The letter of 15th April 2024 was a termination letter that curtailed consultations; it was issued the same day the Claimant requested 72 hours to respond. The notice to the Labour Officer was served on 8th May 2024, making the notice period shorter than the 30 days required. Late service cannot be excused on the basis of absence of prejudice.
Substantive justification for redundancy
No genuine operational reason justified the redundancy
The Claimant tendered evidence, unrebutted, that the Respondent continued trading and receiving orders after the purported termination, indicating the redundancy was camouflaged. The Respondent produced no documents proving loss of promotion contracts for two products or financial statements showing financial difficulty. Mere assertions cannot discharge the employer's legal burden of proving substantive justification.
Consultation before redundancy
Consultation is a legal requirement and none occurred
Consultation between employer and affected employee is a statutory requirement in Kenya. The meeting of 15th April 2024 was a strategy meeting; when the Claimant requested 72 hours to provide input in writing, the Respondent issued the termination notice the same day without receiving his views. The letter stymied the consultations that section 40 requires.
Compensation under section 49(1)(c)
Claimant awarded four months' gross salary (KShs. 1,400,000) as compensatory relief
The Court considered the circumstances which could constitute unfair labour practice, the Respondent's failure to adhere to procedural and substantive fairness, the longevity of the Claimant's service, and that he did not contribute to the termination. Compensation is discretionary and exercised case-by-case; four months' gross salary was deemed appropriate rather than the 12 months claimed.
Legal principles established
#- All paragraphs of section 40 of the Employment Act are conjunctive and must all be satisfied for lawful redundancy termination
- A termination letter curtailing consultation does not satisfy the notice requirement under section 40(1)(b)
- Redundancy requires a genuine operational reason; continued business operations negate redundancy
- Statutory timelines cannot be disregarded on the basis that no prejudice was suffered
Court orders
#- 1.A declaration that the termination of the Claimant's employment was both procedurally and substantively unfair
- 2.Compensation pursuant to section 49[1][c] of the Employment Act, KShs. 1,400,000
- 3.Salary for April 2024, KShs. 350,000
- 4.Costs of the suit
- 5.Interest on the sum awarded in [b] and [c] above at court rates from the date of this Judgment till full payment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 40, 41, 43, 45, 47(5), 49(1)(c))
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwarangu v Cathmed Limited (Cause E003 of 2024) [2025] KEELRC 2681 (KLR)", Case Analysis (2025). Statement Claim dated 21st May, 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2681/eng@2025-09-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.