National Oil Corporation of Kenya v Cheruiyot & 37 others (Civil Appeal 283 of 2020) [2025] KECA 148 (KLR)
The bottom line
#Kenya's Court of Appeal ruled National Oil's 2000 redundancies were lawful, and struck out 12-months-per-year compensation awards as unavailable in law.
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 learned judge erred in law and in fact by holding that the redundancy process was unprocedural and unfair.
- 2.Whether the learned judge erred by awarding compensation for unlawful termination when the applicable law did not provide for such remedy.
Key legal issues
#Whether the redundancy process was unprocedural and unfair for want of notice and failure to follow Section 16A of the repealed Employment Act
The appellant substantially complied with Section 16A; requisite notices were issued (internal memo dated 25th October 2000, union notice dated 7th July 2000, meetings minutes) and the declaration of redundancy was procedural and lawful.
The Court re-evaluated the record as a first appeal and found several notices: a 25th October 2000 internal memo, a 19th October 2000 letter to unionisable staff following a 7th July 2000 union notice, and minutes of meetings with the Kenya Petroleum Workers Union. Relying on Kenya Airways, it held general notice to employees or their union suffices to elicit consultation. On selection criteria, the Court found nothing showed the oldest employees were targeted, and although seniority, skill, ability and reliability were not strictly applied, the appellant had sought guidance from the parent ministry, so the failure did not render the redundancy illegal.
Whether the award of 12 months' salary for each year worked as compensation for unfair redundancy was available in law
The award was not among the remedies contemplated by Section 16A(d), (e) and (f) of the repealed Employment Act, nor by Section 15 of the then Trade Disputes Act, and was alien to law; it could not stand.
The Court confirmed the trial judge had indeed awarded compensation for unfair redundancy at 12 months' salary for each year worked. Section 16A(d), (e) and (f) provided only for payment of leave in cash, one month's notice or wages in lieu, and severance pay at not less than 15 days' pay per completed year of service. Even if the redundancy had been unlawful, Section 15 of the Trade Disputes Act did not contemplate such compensation. The award was therefore set aside with all consequential orders.
Legal principles established
#- An employer who gives general notice of an intended redundancy to the affected employees or their union, and consults, substantially complies with the notice requirements for redundancy; the notice at the initial stage need not name the affected employees.
- The 'last-in-first-out' principle in redundancy selection is not mandatory; an employer may use any of the statutory criteria, though the criteria used must not be opaque.
- Compensation of 12 months' salary for each year worked was not a remedy contemplated under the repealed Employment Act's redundancy provisions and such an award is alien to law.
Court orders
#- 1.Appeal allowed
- 2.All the consequential orders issued by Wasilwa, J on 20th December 2018 set aside in their entirety
- 3.Each party shall bear his/its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court at Nairobi
- ELRC Cause No. 493 of 2016
- Jurisdiction invoked
- First appeal to the Court of Appeal under rule 31 of the rules of this Court
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.
Accordingly, we find merit in the appellant’s appeal and set aside all the consequential orders issued by Wasilwa, J on 20th December 2018 in its entirety.
In light of the chequered litigation history in this matter, the order that commends itself to us as regards costs is that each party shall bear his/its own costs.
We fully agree with the position taken by Maraga JA (as he then was) and hold and find that the respondents were issued with the requisite notices before they were declared redundant.
the award made by the learned judge namely: compensation for the unfair redundancy at 12 months’ salary for each year worked was not one of the remedies contemplated by the Act for an employee declared redundant and the same is therefore alien to law and cannot be allowed to stand.
This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and re-analyse the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "National Oil Corporation of Kenya v Cheruiyot & 37 others (Civil Appeal 283 of 2020) [2025] KECA 148 (KLR)", Case Analysis (2025). Nairobi Civil Appeal (ELRC Appeal from Nairobi ELRC Cause No. 493 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/148/eng@2025-02-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.