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MagistratePartially AllowedCause No E218 of 2022· [2025] KEMC 51 (KLR)

Odaga v Mijengo Investments Limited (Cause E218 of 2022) [2025] KEMC 51 (KLR)

Employment and Labour Relations Court (as delivered by a Senior Principal Magistrate at Nakuru)
11 March 2025
3,426 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nakuru court ruled that terminating an employee as redundant the same day, without a month's notice, was unfair and ordered the employer to pay over KES 602,000.

What this practically means

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Executive summary

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The Claimant, employed as a General Worker from February 2016 until 7th July 2022 at a monthly salary of Kshs 8,000, sued her former employer alleging that her termination on account of redundancy on 7th July 2022 was unlawful and unfair, and claiming underpayments, overtime, public holiday pay, unpaid leave, notice pay, severance pay and 12 months' compensation. The Respondent admitted the employment but contended it complied with section 40 of the Employment Act, having notified the Nakuru County Labour Office and consulted employees, and that the Claimant accepted a lumpsum of about Kshs 20,928 in full settlement. The court found no dispute that a redundancy occurred and framed the issues as whether the redundancy complied with the law and whether terminal dues were paid. Relying on section 40 and the Thomas De La Rue and Obayo authorities, the court held that the Respondent failed to prove the requisite one month's notice to the Claimant and the Labour Officer; the termination letter issued and took effect on the same day, amounting to 'jumping the gun'. No valid separation agreement was exhibited, and since the Respondent produced no employment records, the burden shifted to it under sections 10(6), (7) and 74, leaving the Claimant's claims uncontroverted. Continuous infringements were held not time-barred. The court declared the redundancy unlawful and unfair and awarded a net KES 602,172.98 (after deducting a cheque of Kshs 19,384), covering underpayments, 3 months' compensation, notice pay, overtime, public holidays, unpaid leave and severance, with costs and interest, plus a 30-day stay of execution granted unopposed at delivery.

Key legal issues

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01

Compliance with section 40 redundancy procedure

Holding

The redundancy was unfair because the Respondent produced no evidence of the requisite one month's notice to the Claimant and the Labour Officer; the letter issued terminated employment with immediate effect rather than notifying an intention to declare redundancy.

Reasoning

Section 40(1)(a) and (b) require at least one month's notice to the employee and the Labour Officer. The Respondent only produced a letter titled 'Termination of Employment' issued on the day of termination. Following Thomas De La Rue and Obayo, the one-month notification period applies equally to non-unionised employees. No evidence of a valid separation agreement existed. The failure was fatal and rendered the termination unfair.

p. 6
02

Termination by mutual consent

Holding

No valid separation agreement was proved; the cheque and signature did not amount to mutual consent extinguishing statutory claims.

Reasoning

The Respondent argued the parties agreed to terminate by mutual consent, which would cure procedural non-compliance. The court found no evidence of a mutual agreement to terminate other than the redundancy termination letter, and the exhibited cheque related to a different employee.

p. 6
03

Burden of proof on employment records

Holding

Since the Respondent failed to produce prescribed records, the Claimant's uncontroverted averments on leave, underpayments, overtime and public holidays were proved.

Reasoning

Sections 10(6), (7) and 74 of the Employment Act shift the evidential burden to the employer where prescribed records are not produced. The Respondent gave only blanket denials without proof, so the Claimant's claims stood uncontroverted and were awarded as pleaded.

p. 6
04

Limitation of overtime, holiday and underpayment claims

Holding

The claims were not time-barred as the infringements were continuous in nature.

Reasoning

The Respondent argued limitation of time against the underpayment, overtime and public holiday claims. The court held the infringements were continuous, so the claims were not time-barred.

p. 7

Legal principles established

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  • For a redundancy to be valid, both the employee (or union) and the Labour Officer must be notified at least one month before the redundancy takes effect; failure to prove such notification renders the termination unfair.
  • Where an employer fails to produce prescribed employment records, the burden of proving or disproving an allegation by the employee shifts to the employer.
  • Claims for continuous infringements (overtime, public holidays, underpayments) are not time-barred.

Court orders

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  1. 1.Declaration that the decision to terminate the Claimant's services on 07/07/2022 on account of redundancy was unlawful and unfair
  2. 2.Judgment entered for the Claimant against the Respondent in the total sum of KES 621,556.98, less Kshs 19,384, i.e. net award of KSHS 602,172.98
  3. 3.The Respondent shall pay the Claimant's costs of this suit
  4. 4.The decretal sum shall attract interest at court rates from date of judgment until payment in full
  5. 5.30 days stay of execution granted (at delivery, unopposed)

Authorities

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Legislation

  • Employment Act, 2007section 40 (40(1)(a)-(g))
  • Employment Act, 2007section 45
  • Employment Act, 2007section 49(c)
  • Employment Act, 2007section 10(6) and (7)
  • Employment Act, 2007section 74

Cases cited (3)

  • Gerrishom Mukhusti Obayo Vrs DSV Air and Sea Limited
    (2018) eKLR
  • Thomas De La Rue (k) Ltd Vrs David Opundo Omutelema
    (2013) eKLR
  • William Barasa Obutiti Vrs Mumias Sugar Company Limited
    (2006) eKLR
Jurisdiction invoked
Employment Act, 2007 (sections 40, 45, 49, 10, 74) - first-instance employment claim

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, "Odaga v Mijengo Investments Limited (Cause E218 of 2022) [2025] KEMC 51 (KLR)", Case Analysis (2025). Cause No E218 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/51/eng@2025-03-11

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.