Automated Summary
Key Facts
Three employees (George Njihia, Bernard Njoroge, Peter Macharia) employed as drivers by Kenya Road Hauliers Limited for 20, 5, and 7 years respectively were terminated in December 2022. The employer claimed redundancy due to economic hardships but failed to provide statutory notices to the union and labor office, and no evidence of proper consultation was submitted. The court found the termination process non-compliant with Section 40(1) of the Employment Act, deeming it unfair and unlawful. The claimants were awarded 8, 5, and 6 months' salary in compensation respectively.
Issues
- Whether the Claimants are entitled to the reliefs sought
- When the Claimants were employed by the Respondent
- Whether termination of the Claimants' employment on account of redundancy was unfair
Holdings
- The Claimants are not entitled to two months' salary in lieu of notice as they were already paid one month's salary and no evidence of a Collective Bargaining Agreement supported the claim.
- The Claimants were awarded compensation equivalent to 8 months' salary for the 1st Claimant, 5 months' salary for the 2nd Claimant, and 6 months' salary for the 3rd Claimant under Section 49(1)(c) of the Employment Act.
- The court declared that the termination of the Claimants' employment on account of redundancy was unfair and unlawful.
- Severance pay was rejected as the termination was deemed unlawful under Section 45 of the Employment Act, 2007.
- The prayer for accrued annual leave days was declined due to lack of evidence provided by the Claimants regarding outstanding leave balances.
- The court ordered 50% of the costs of the suit to be borne by the Respondent.
Remedies
- The court ordered the respondent to pay 50% of the costs incurred by the claimants in pursuing this legal action.
- The court declared that the termination of the claimants' employment on account of redundancy was unfair and unlawful.
- The claimants were awarded compensation equivalent to 8 months' salary (1st Claimant), 5 months' salary (2nd Claimant), and 6 months' salary (3rd Claimant) for the unfair termination of their employment.
Monetary Damages
816240.00
Legal Principles
The court held that termination via redundancy must comply with Section 40(1) of the Employment Act, 2007, requiring notice to the union and labour officer (if unionized) at least one month prior. It emphasized that failure to provide adequate notice and evidence of consultations rendered the redundancy process unlawful, citing precedents like Kenya Airways Ltd v Aviation & Allied Workers Union Kenya (2014) eKLR and Cargill Kenya Ltd V Mwaka & others (2021) eKLR. The decision underscored that procedural compliance, including documenting reasons for redundancy and ensuring equitable treatment, is essential to avoid unfair termination.
Precedent Name
- African Nazarene University V David Motevu & 103 others
- Phillemon Oseni Kidavi v Brinks Security Ltd
- Thomas De La Rue (K) Ltd v David Opondo Omutelema
- Meshack Kii Ikulume v Prime Fuels Kenya Ltd
- Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 others
- Freight In Time Ltd V Rosebell Wambui Munene
- Gerrishom Mukhutsi Obayo v DSV Air and Sea Ltd
- Cargill Kenya Ltd V Caroline Mwaka & others
- James Ngunia Kinyua V Oserian Development Co. Ltd
Cited Statute
- Employment Act, 2007
- Evidence Act
Judge Name
Dr. Jacob K. Gakeri
Passage Text
- 71. In this case, since the Claimants were members of the union, the Respondent was obligated to send the notice to the union and the local labour officer only according to Section 40(1)(a) of the Employment Act, 2007.
- 107. In the circumstances, the court is satisfied that the Claimants should be compensated as follows; 1st Claimant 8 months salary Kshs.343,680/, 2nd Claimant 5 months salary Kshs.214,800/, 3rd Claimant 6 months salary Kshs.257,760/.
- 82. Having found that the Respondent's redundancy process did not meet the threshold prescribed by Section 40(1) of the Employment Act, 2007, the purported redundancy transitioned to an unfair termination of the Claimant's employment which entitles them to the reliefs provided for by the Employment Act, 2007.