Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others

The audited and unaudited accounts, corroborated by the neutral Economic Planning Division witness, showed a downward trend in profits and an unsustainable wage bill. The test is whether the employer genuinely believed there was a redundancy situation; the reasonableness of the decision is judged by the circumstances prevailing when it was made, and it is lawful even in apparently successful enterprises to reduce staff as a cost-saving measure. Unanimously, all three judges held the Industrial Court's contrary finding was against the weight of evidence.

Maraga JA reasoned that the notices under section 40(1)(a) and (b) are not merely informational but exist to enable parties to avert or minimise terminations and mitigate hardship, and that with hardly two days before negotiations commenced no meaningful consultation was possible, quite apart from the injunction that halted the process. Murgor JA found the notice valid and the Union responsible for the breakdown of consultations, but both joined in the result that the selection process was procedurally flawed. The divergence on notice and consultation is recorded in the separate judgments.

The employer produced no score sheets or assessment results showing how the affected employees were scored against retained employees; it relied on past warning letters, and the injunction had suspended the assessment exercise so that the timing of the selection was doubtful. The Industrial Court erred in treating LIFO as the sole mandatory criterion, but the employer's inability to demonstrate systematic application of its stated criteria rendered the terminations procedurally unfair.

Kenya Airways is a private limited company listed on the Nairobi, Uganda and Tanzania stock exchanges in which the Government holds only 29.8%, so it is not a parastatal; the Board and management have the sole mandate to manage the company and balance stakeholders' interests. The Industrial Court's reliance on the right to work and the requirement to consult the Government and the former Prime Minister was erroneous, as those principles govern public bodies discharging public duties.

Reinstatement would defeat the objective of a justified redundancy and is subject to section 49(4) of the Employment Act, including practicability and the common law bar on specific performance of service contracts except in very exceptional circumstances. The Industrial Court ordered it on unproven factors such as bad faith and in violation of the parties' right to be heard on the question. Taking into account the limited air transport job market and the payments already made under the CBA, the majority fixed compensation at six months' gross salary.

Relying on the Supreme Court's definition of 'a matter of law' in Peter Munya v Dickson Mwenda Kithinji, Maraga JA held that interpretation and application of constitutional and statutory provisions, and conclusions based on no evidence or perversely unsupported conclusions, are matters of law. Justification of redundancy, procedural propriety and the trial judge's interpretation of the relevant provisions were therefore properly before the Court.