Ayieko & 3 others v Samaritan Purse (Employment and Labour Relations Cause 312 of 2017) [2023] KEELRC 1411 (KLR) (9 June 2023) (Judgment)

Key Facts

Issues

• The court considered whether the respondent lawfully deducted outstanding loans from the claimants' final severance payments, as the claimants argued this left them with insufficient compensation.
• The claimants argued that redundancy notices were invalid because they were issued by an HR manager working illegally in Kenya under the Kenya Citizenship and Immigration Act, rendering the notices null and void.
• The claimants contended the respondent failed to notify the Eldoret Labour Officer of the redundancy reasons and extent, as required by Section 40(1)(b) of the Employment Act.
• The court examined if the respondent conducted meaningful, good-faith consultations with employees prior to declaring redundancy, as the claimants argued they were not provided sufficient information or time to respond.
• The claimants alleged that the redundancy process was procedurally unlawful and unfair under Section 40 of the Employment Act, 2007, citing insufficient consultation, lack of valid justification, and failure to notify the Labour Officer.
• The court assessed whether the selection of employees for redundancy adhered to Section 40(1)(c) requirements, as claimants alleged extraneous factors were used and some recalled employees were junior to them.

Holdings

• The court dismissed the claim for unfair termination, determining that the claimants did not satisfactorily contest the procedural aspects of redundancy.
• The court found that the respondent followed the law in declaring the claimants redundant, as the redundancy was justified by the enforcement of South Sudanese regulations impacting operations.
• The court ordered the claimants to bear the costs of the suit, as their claims were found to be without legal basis.

Remedies

Legal Principles

• The court established that the respondent (employer) had the burden to demonstrate both substantive justification for the redundancy and substantial compliance with Section 40 of the Employment Act 2007. This principle was central to the court's evaluation of whether the redundancy process was lawful and fair.
• The court applied judicial review principles to determine that redundancy decisions are a matter of employer's commercial judgment, emphasizing that courts cannot interfere with such decisions unless they are procedurally unlawful. This aligns with the holding in Aoraki Corporation Limited v Collin Keith McGavin and Kenya Airways Corporation Limited v Tobias Oganya Auma, where courts recognized employers' discretion in restructuring while requiring compliance with statutory procedures.

Precedent Name

• Kenya Airways Corporation Limited v Tobias Oganya Auma & others
• Aoraki Corporation Limited v Collin Keith McGavin

Cited Statute

Judge Name

Passage Text

• Redundancy is a special situation. The employees have done no wrong. It is simply that in the circumstances the employer faces, their jobs have disappeared and they are considered surplus to the needs of the business. It is for the employer as a matter of commercial judgment to decide on the strategy to be adopted in the restructuring exercise and what position or positions should be dispensed with in the implementation of that strategy.
• The court has no jurisdiction to prevent an employer from restructuring or adopting modern technology so long as it observes all relevant regulations. The decision to declare redundancy has to be that of the employer.
• The court finds the claim without merit and hereby dismisses the same with costs.