Muchemi v Nanyuki Cottage Hospital

c) General damages for infringement and violation of constitutional rights; d) Aggravated damages; e) Costs of the suit; f) Interest at court rates from the date of filing the suit until payment in full. 3. In response to the Claim, the Respondent asserts that the termination of the Claimant’s employment on account of redundancy was lawful, procedurally fair, and in compliance with the provisions of Section 40 of the Employment Act. Consequently, the Respondent has urged the Court to dismiss the Claim with costs. 4. The matter proceeded for hearing on 7 th May 2026, during which both parties adduced oral evidence in support of their respective cases. Claimant’s Case 5. The Claimant testified in support of her case as CW1. At the outset, she adopted her Amended Witness Statement to constitute her evidence in chief. She further produced the documents contained in her List and Bundle of Documents as exhibits, save for the letter dated 2nd February 2026 from Outspan Hospital. 6. The Claimant testified that she was not issued with the requisite redundancy notice as prescribed by law and that no notice was served upon the Labour Officer. 2

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7. She further stated that, although the Respondent asserted that the hospital was undergoing restructuring, she was the only employee who was declared redundant. To this end, she viewed the redundancy exercise as discriminatory. 8. The Claimant further contended that the Respondent terminated her employment despite being aware that she had been diagnosed with breast cancer in July 2024 and was undergoing treatment. 9. According to the Claimant, her employment with the Respondent was her primary source of livelihood. She maintained that the decision to declare her redundant was motivated by her cancer diagnosis and therefore amounted to discrimination. 10.The Claimant further testified that she had secured employment with the Respondent on merit following a rigorous recruitment process, having resigned from her previous employment to take up the position. Respondent’s Case 11.The Respondent called Judy Ndahi (RW1), its Head of Human Resources, to testify on its behalf. Equally, RW1 adopted her Witness Statement to constitute her evidence in chief and further produced the Respondent's List and Bundle of Documents as exhibits before the Court. 12.RW1 testified that the Claimant was paid all her terminal dues and accorded the requisite notice period before the termination of her employment. She further stated 3

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that the Respondent's management met with the Claimant, explained the reasons for the redundancy, and afforded her an opportunity to seek clarification and raise any questions. According to RW1, the Claimant confirmed that she was satisfied with the explanations provided. 13.It was RW1's view that the Claimant's suit was brought in bad faith and was merely an afterthought. 14.RW1 further testified that the Respondent was compelled to undertake a restructuring exercise due to the prevailing adverse economic conditions, increased competition from newly established hospitals within the town, and challenges in the processing of claims by the Social Health Authority (SHA), all of which adversely affected its revenue. According to RW1, these circumstances necessitated the abolition of the Claimant's position, with her duties being redistributed among other departmental heads as a cost-saving measure aimed at ensuring the Respondent remained afloat. According to RW1, these reasons were explained to the Claimant. 15.RW1 further testified that the Claimant was issued with a redundancy notice dated 4th June 2025, followed by a final notice dated 6 th August 2025 confirming the termination of her employment, thereby demonstrating compliance with the statutory notice requirements. 4

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16.RW1 further testified that the Labour Officer was duly notified of the intended redundancy in accordance with the law. She added that the Claimant did not challenge the redundancy notice at any time before the termination of her employment. Submissions 17.On the Claimant’s part, it was submitted that the notice to the Labour Officer was issued on the same date that she was declared redundant. That further, the Respondent issued a notice on 6th August, 2025 and terminated her employment on 7th August, 2025, representing a period of only one day. On this score, the Claimant posited that the Respondent’s failure to comply with the mandatory statutory prerequisite under Section 40 of the Employment Act renders the entire redundancy exercise fundamentally flawed, illegal, and void ab initio. 18.In support of the Claimant’s arguments, reliance was placed on the cases of Karani v ISL Kenya Ltd (Employment & Labour Relations Appeal 005 of 2020) (2025) eKLR and Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLR 19.Referencing the case of Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, it was contended that the Respondent failed to engage in any meaningful, good-faith consultation with the Claimant. 20.It was further submitted by the Claimant that the redundancy was not dictated by 5

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genuine operational requirements but was a targeted, discriminatory action masked as an economic necessity. The Claimant further submitted that she had been diagnosed with cancer and, in her view, the Respondent chose to discriminate against her based on her poor health. The Claimant placed reliance on the case of Rose Wangui Mambo & 2 Others vs Limuru County Club & 15 Others [2014] eKLR to support her assertion. 21.On the other hand, the Respondent submitted that the redundancy affecting the Claimant was genuine and arose from legitimate operational requirements of the Hospital. In the same vein, the Respondent submitted that the redundancy was not a disciplinary measure directed at the Claimant but a management decision made in response to its operational and financial requirements. 22.It was the Respondent’s contention that the Claimant did not place before this Honourable Court any evidence demonstrating that the restructuring was fictitious or that the position previously held by her continued to exist after the redundancy. 23.Citing the case of Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR, and Thomas De La Rue (K) Ltd v David Opondo Omutelema [2013] eKLR, the Respondent posited that an employer is entitled to abolish a position occupied by a single employee where genuine operational requirements so demand. 6

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24.The Respondent maintained that the evidence before this Court demonstrates that the Claimant's position became superfluous following its restructuring and that the redundancy was occasioned by genuine operational requirements. 25.With regards to the procedure applied in terminating the Claimant’s employment, the Respondent submitted that the Labour Officer was duly notified of the intended redundancy in compliance with Section 40(1) of the Employment Act. That upon completion of the redundancy process, the Claimant was issued with the final Redundancy Letter dated 6th August 2025 confirming the termination of her employment on account of redundancy. It was further submitted that the Claimant was paid all her statutory and contractual entitlements, including salary for days worked, accrued leave, one month's salary in lieu of notice and severance pay. 26.As to the claim for discrimination, the Respondent submitted that the Claimant was required to demonstrate, by credible evidence, that she was treated differently from employees and that such treatment informed the Respondent's decision to declare her position redundant. 27.In this regard, the Respondent submitted that apart from her own assertions, the Claimant did not produce any documentary or oral evidence demonstrating that it targeted her because of her illness. That further, no evidence was tendered showing that employees in similar circumstances were treated differently or that another 7

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person was employed to replace the Claimant after the redundancy. 28.To support its position, the Respondent placed reliance on the cases of Gichuru v Package Insurance Brokers Ltd [2019] eKLR and Symon Wairobi Gatuma v Kenya Breweries Ltd & 3 Others [2024] KESC 52 (KLR). Analysis and Determination 29.Having considered the pleadings, the evidence on record, and the parties' respective submissions, the Court has distilled the following issues for determination: a) Whether the termination of the Claimant's employment on account of redundancy was substantively justified; b) Whether the Respondent complied with the procedural requirements governing redundancy in terminating the Claimant’s employment; and c) Whether the Claimant is entitled to the reliefs sought. Substantive justification for the termination on redundancy? 30.It is common ground that the Claimant's employment was terminated on account of redundancy. The central issue in dispute is whether that redundancy was substantively justified and procedurally fair. 31.The Claimant contends that the redundancy was a mere pretext, maintaining that she was the only employee whose employment was terminated. The Respondent, 8

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on the other hand, holds that it was compelled to restructure its operations due to adverse economic conditions, increased competition from newly established hospitals within the town, and challenges in the processing of claims by SHA, all of which adversely affected its revenue. 32.From the Respondent's case, it is evident that it has attributed the decision to terminate the Claimant's employment to its operational requirements, thereby bringing the redundancy within the ambit of Section 45(2)(b)(ii) of the Employment Act. 33.Accordingly, the burden rested upon the Respondent to demonstrate that the reason for the Claimant's termination was valid, fair, and related to its operational requirements. 34.In the redundancy notice dated 6th August 2025, the Respondent stated that, following an organisational restructuring, the Claimant's position of Nursing InCharge (Matron) within the Nursing Department had been identified as redundant. 35.Having indicated as much, it was incumbent upon the Respondent to adduce evidence demonstrating that it had in fact undertaken a restructuring exercise and that the restructuring had genuinely resulted in the abolition of the Claimant's position. Such evidence would ordinarily include, among other things, the organisational structure before and after the restructuring to illustrate that the 9

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position had been genuinely rendered redundant and was non-existent in its revised structure. Nonetheless, no such evidence was adduced by the Respondent. 36.This Court concurs with, and is bound by, the decision of the Court of Appeal in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR that while there may be underlying causes leading to a true redundancy situation, such as reorganization, the employer must nevertheless show that the termination is attributable to the redundancy and that the services of the employee have been rendered superfluous or that the redundancy has resulted in the abolition of office, job or loss of employment. 37.In further elucidating the meaning of the term “redundancy,” the Court of Appeal in the Kenya Airways (supra) observed as follows: “There are two broad aspects of this definition…The second aspect is that the loss of employment in redundancy has to be at no fault of the employee and the termination of employment arises “where the services of an employee are superfluous” through “the practices commonly known as abolition of office, job or occupation and loss of employment.” In this case, what I understand as required to be determined in this aspect of the definition of redundancy is whether the appellant abolished the offices, jobs or occupations of the affected employees resulting in their services being superfluous hence their loss of employment. Corollary to that is the justification for that abolition, if the appellant indeed abolished their 10

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offices. Determination of these two aspects will, determine the first issue of whether or not the redundancy in this case was necessary.” Underlined for emphasis 38.Applying the foregoing precedent to the present case, the Court finds that the Respondent failed to demonstrate that the Claimant's position had genuinely become redundant and that it had been abolished from its organisational structure. 39.While the Employment Act recognises an employer's prerogative to reorganise its operations, any termination arising from such reorganisation must be founded on a genuine and credible redundancy. Redundancy cannot be invoked as a convenient vehicle for terminating an employee's services. An employer must therefore establish, through cogent evidence, that the redundancy was justified. 40.As stated herein, the Respondent's assertion that it had undertaken a restructuring exercise was not supported by the evidence on record. Further, it is notable that there was no evidence that any other employees were affected by the alleged restructuring or declared redundant. This evidentiary gap lends credence to the Claimant's contention that she was the only employee affected by the alleged redundancy. 11

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41.Consequently, the Court is not persuaded that the Respondent undertook a genuine restructuring exercise or that, in the course of such an exercise, the Claimant's position as Nursing In-Charge (Matron) was abolished, thereby rendering her redundant. 42.All in all, the Court finds that the Respondent failed to establish, on a balance of probabilities, that there was substantive justification for terminating the Claimant's employment on account of redundancy. Procedural fairness? 43.As regards procedural fairness, Section 40(1) of the Employment Act prescribes the following mandatory requirements with which an employer must comply before terminating an employee's employment on account of redundancy: a) where the employee is a member of a trade union, the employer notifies the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy; b) where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer; 12

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c) the employer has, in the selection of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy; d) where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy; the employer has not placed the employee at a disadvantage for being or not being a member of the trade union; e) the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash; f) the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice; and g) the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days’ pay for each completed year of service. 44.The Claimant maintained that she was not issued with any redundancy notice prior to the termination of her employment. To refute this assertion, the Respondent exhibited a letter dated 4th June 2025 addressed to the Claimant, indicating that her position had been identified as redundant with effect from 1 st July 2025. The Claimant denied ever receiving the letter, stating that she only became aware of it upon being served with the Respondent's Response to the instant Claim. 13

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45.In her testimony, RW1 stated that the letter had been hand-delivered to the Claimant. It is notable that the letter dated 4th June 2025 bears no acknowledgment of receipt by the Claimant, nor did the Respondent produce any documentary evidence, such as a delivery record, to confirm that it was indeed served upon her. 46.Even assuming that the letter was served upon the Claimant, it is evident that it did not satisfy the requirements of Section 40(1)(a) and (b) of the Employment Act. This is for the reason that the statutory notice contemplated under those provisions is one communicating the employer's intention to declare an employee redundant, as opposed to a notice conveying a concluded decision. 47.In this case, the letter dated 4th June 2025 was couched in final terms, informing the Claimant that her position had already been declared redundant. It further set out the redundancy benefits payable to her. Accordingly, the letter did not constitute a notice of intention to declare redundancy within the meaning of Section 40(1)(a) and (b) of the Employment Act. Instead, it communicated a decision that had already been made. 48.The rationale for the statutory notice under Section 40(1)(a) and (b) is to afford the employer and the employee or the union, as the case may be, an opportunity to engage in meaningful consultations with a view to exploring alternatives to redundancy and, where possible, mitigating or avoiding its consequences. 14

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49.On this point, I am guided by the decision of the Court of Appeal in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others (supra), where Maraga JA (as he then was) had this to say: “My understanding of this provision is that when an employer contemplates redundancy, he should first give a general notice of that intention to the employees likely to be affected or their union. It is that notice that will elicit consultation between the parties, ….” 50.Similarly, in the case of The German School Society & another vs Ohany & another [2023] KECA 894 (KLR), the Court of Appeal held that a notice to the employee/trade union/labour officer opens up the door for a consultative process with the key stakeholders. 51.Given the final nature of the notice issued by the Respondent in this case, there was no opportunity for meaningful consultations, as the decision to terminate the Claimant’s employment had already been made. 52.Accordingly, the Court is unable to agree with the Respondent's contention that it complied with the statutory notice requirement under Section 40(1)(a) and (b) of the Employment Act by issuing the letter dated 4th June 2025. To that extent, the Respondent fell short of the legal threshold. 15

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53.On the issue of consultations, RW1 testified that the Respondent's management met with the Claimant and explained the reasons for the redundancy. The Claimant, however, maintained that the only meeting she had with the Respondent took place on 5th August 2025, when she was issued with the letter terminating her employment. 54.It is worth pointing out that the Respondent's assertion that consultations took place was not supported by any documentary evidence. Given the importance of preredundancy consultations, one would reasonably have expected the Respondent to produce minutes or any other record of the meeting. Such evidence would have been critical in demonstrating whether the consultations were conducted in the spirit of Article 13 of the International Labour Organisation (ILO) Convention No. 158 and Recommendation No. 166. 55.As was held in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others (supra), consultations are intended to enable the parties to discuss and, where possible, negotiate alternatives to the intended redundancy or, where redundancy is unavoidable, to agree on the most appropriate manner of implementing it. 56.In that regard, minutes of the alleged meeting would have demonstrated whether the parties explored viable alternatives aimed at preserving the employment 16

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relationship, such as redeploying the Claimant to another suitable position or considering other cost-saving measures, including a reduction in remuneration. 57.In the absence of evidence demonstrating that the Respondent undertook preredundancy consultations as envisaged under Article 13 of ILO Convention No. 158, the Court is not persuaded that the Respondent complied with this procedural requirement and therefore finds it to have been at fault in that respect. 58.The Court is, however, satisfied that the selection criteria contemplated under Section 40(1)(c) of the Employment Act was inapplicable in the present case, the Claimant having admitted during cross-examination that she was the sole holder of the position of Nursing In-Charge. 59.Another key pre-redundancy requirement is under Section 40(1)(e), (f), and (g) of the Employment Act, which requires an employer to pay the affected employee all accrued leave, payment in lieu of notice where applicable, and severance pay calculated at a rate of not less than 15 days’ pay for each completed year of service. 60.In this regard, the letter dated 6th August 2025 informed the Claimant that she would receive payment in lieu of notice and severance pay. Further, the computation of her terminal dues shows that she was paid salary up to 6 th August 2025, accrued leave, payment in lieu of notice, and severance pay. During crossexamination, the Claimant acknowledged having received the amounts so computed. 17

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61.The Court is therefore satisfied that the Respondent complied with its obligations under Section 40(1)(e), (f), and (g) of the Employment Act by paying the Claimant the statutory redundancy benefits due to her. 62.In the final analysis, the Court finds that the Respondent failed to substantially comply with the procedural requirements prescribed under Section 40(1) of the Employment Act, having neither issued a notice of intention to declare redundancy nor undertaken the requisite consultations. 63.Consequently, the termination of the Claimant's employment on account of redundancy was procedurally unfair and, therefore, unlawful. Reliefs? 64.In light of the foregoing findings that the Respondent failed to establish that the Claimant's termination on account of redundancy was substantively justified and procedurally fair, the Court awards the Claimant compensation under Section 49(1) (c) of the Employment Act equivalent to five (5) months of her last gross monthly salary. In assessing the quantum of compensation, the Court has taken into account the duration of the employment relationship and the circumstances surrounding the termination. 65.The Claimant's prayer for general and aggravated damages founded on the alleged violation of her constitutional rights is declined. In so finding, the Court is guided 18

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by the decision in NEC Corporation v Samuel Gitau Njenga [2018] eKLR, where the Court held as follows: “the court does not think, however, that violation of every conceivable contractual, statutory, or constitutional right warrants a separate award of damages.” This reasoning equally applies to the Claimant’s claim for general and aggravated damages. Orders 66.Consequently, the Claimant's claim succeeds, and judgment is entered in her favour as follows: a) The Claimant is awarded compensatory damages in the sum of Kshs 1,199,997.40, equivalent to five (5) months of her last gross salary. b) The amount in (a) shall accrue interest at the prevailing court rates from the date of judgment until full payment is made. c) The Respondent shall bear the costs of this suit. DATED, SIGNED and DELIVERED at NYERI this 31st day of July 2026. ……………………………… STELLA RUTTO JUDGE 19

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In the presence of: For the Claimant Mr. Wanyama For the Respondent Ms. Jepkosgey instructed by Mr. Abwuor Court Assistant Ndati ORDER In view of the declaration of measures restricting court operations due to the COVID19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21 st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open court. In permitting this course, this court had been guided by Article 159(2)(d) of the Constitution which requires the court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this court the duty of the court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes. STELLA RUTTO JUDGE 20

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