Longhorn Publishers Kenya also known as Longhorn Kenya Limited v Njuguna (Civil Appeal E413 of 2020) [2023] KECA 316 (KLR)
The bottom line
#Kenya's Court of Appeal ruled Longhorn Publishers lawfully made an employee redundant, wiping out a Kshs. 4.4 million compensation award.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the declaration of redundancy in the position held by the respondent was justified.
- 2.Whether the appellant complied with procedural requirements under the Act.
- 3.Whether the compensation of 9 months was excessive.
Key legal issues
#Whether the redundancy of the respondent's position was justified
The Court found the redundancy justified: the new position of Chief Human Resource and Administration Officer had significantly different roles, the company faced declining earnings, and the fact that later restructuring created new positions did not invalidate the redundancy declared at the time.
Comparing the 25 key responsibilities of the new position with the respondent's former duties, the Court found only four overlapped and the roles were significantly different. Reporting lines to the Managing Director did not establish interchangeability. Financial statements showed a sharp decline in 2012, supporting the operational-requirements justification. Hiring 23 new staff months later was irrelevant since redundancy must be judged at the time of the decision. The respondent failed to discharge her burden of proving unfair termination.
Compliance with the procedural requirements of Section 40 of the Employment Act
The appellant complied with Section 40's requirements, offering severance pay of Kshs. 1,300,775.90 plus accrued dues, compliance acknowledged by the Superior Court.
The Court noted that following the declaration of redundancy the appellant met the Section 40 conditions, including notice and severance pay at the statutory rate. The respondent did not dispute receipt of the severance pay. Procedural compliance, combined with the valid and fair reason, made the termination lawful.
Whether the nine months' compensation award was excessive
The award of nine months' salary was unexplained and unjustifiable and fell with the judgment.
Since the Court found the redundancy justified and procedurally compliant, there was no basis for compensation under Section 49 of the Employment Act. The award could not stand independently of the finding of unfair termination, so the entire judgment of the ELRC was set aside.
Legal principles established
#- An employer may lawfully declare redundancy where there is a valid and fair reason based on the employer's operational requirements and where termination is procedurally fair; redundancy must be assessed on the circumstances prevailing at the time of the declaration, not on subsequent restructuring.
- Termination on account of redundancy is fair or justified where four components exist: a reason for termination; the reason being valid; termination being based on operational requirements of the employer; and procedural fairness.
- In a redundancy dispute the burden is on the employee to prove the termination was unfair, while the employer shoulders the burden of showing the redundancy was justified.
- Where an employer genuinely believed a redundancy situation existed, the court will not substitute its own view of the business decision; the court has no supervisory role over the employer's commercial judgment.
Court orders
#- 1.The appeal is allowed.
- 2.The judgment of the Employment and Labour Relations Court is set aside.
- 3.No order as to costs.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court
- Not stated in the judgment
- Jurisdiction invoked
- Section 17 of the Employment and Labour Relations Court Act as read with Article 164(3) of the Constitution (first appeal)
Relief refused
#The respondent's award of nine months' salary compensation (Kshs. 4,401,595/=) from the ELRC
The Court found the redundancy was justified and the award was unexplained and unjustifiable.
Costs
We make no order as to costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We accordingly allow this appeal and set aside the Judgment of the Employment and Labour Relations Court.
We make no order as to costs.
The burden is placed on an employee to prove that the termination was unfair while the employer shoulders the burden of showing that the declaration of redundancy was justified.
As long as the employer genuinely believed that there was a redundancy situation, any termination was justified and it was not for the court to substitute its business decision of what was reasonable. The Court has no supervisory role.
redundancy in this case must be investigated based on the circumstances prevailing at the time in which the decision was made and not subsequent months and the conditions following.
Issues in the judgment
#The compensation award is rendered inconsistently: 'the remedy of compensation of salary for 9 months being 9,377,955= 4,401,595/=' appears garbled, while elsewhere the award is stated as Kshs. 4,401,595/= and respondent's counsel asserted a typographical error making it Kshs. 3,401,595/=.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Longhorn Publishers Kenya also known as Longhorn Kenya Limited v Njuguna (Civil Appeal E413 of 2020) [2023] KECA 316 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/316/eng@2023-03-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.