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Court of AppealPartially AllowedCourt of Appeal Appeal from ELRC Cause No E490 of 2020 (memorandum of appeal dated 7th February 2022)

London Distillers (K) Limited v Kenya Union of Commercial Food & Allied Workers (Civil Appeal E051 of 2022) [2025] KECA 216 (KLR)

Court of Appeal of Kenya
7 February 2025
7,394 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal confirmed that even a valid reason like Covid-19 cannot excuse employers from following strict redundancy notice procedures.

What this practically means

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Executive summary

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This was a first appeal by London Distillers (K) Limited against a judgment of the Employment and Labour Relations Court at Nairobi (M. Onyango, J.) of 19th January 2022, which found that the redundancy of ten employees and retirement of five employees in August 2020 were unfair for breach of section 40 of the Employment Act and the parties' CBA, and awarded terminal dues including ten months' salary compensation. The Court of Appeal first held that the Recognition Agreement and CBA remained valid and binding: the appellant's assertion that the CBA had been constructively vitiated was unproven, and the pending process before the National Labour Board was incomplete. The court then found that the notices of 12th and 28th August 2020 were invalid: notice was not served on the union or the labour officer in charge of the areas where the affected employees worked, the individual employees received only an effective three-day quit notice instead of the statutory one month, and the retirees did not receive the 45 days' written notice required by CBA Clause 22(e). The court disagreed with the trial judge only on the validity of the reason, holding that the covid-19 pandemic and its effect on operations was a valid reason, but that implementation was procedurally irregular and opaque. On quantum, the court found ten months' compensation unsupported and excessive given the pandemic context, and substituted four months for both categories of employees. Severance pay was held payable under CBA clauses 6(c) and 23(d), the claim having been pleaded. The ground on failure to compute individual decretal sums was moot, the trial judge having entered a tabulation judgment on 12th April 2024. The appeal succeeded in part: the ten-month compensation was set aside and replaced with four months, the rest of the trial court's orders were confirmed, and the appellant was ordered to meet half the costs of appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Kenya Union of Commercial Food & Allied Workers and the Collective Bargaining Agreements were valid and binding
  2. 2.Whether the notices dated 12th August 2020 and 28th August 2020 issued by the appellant were valid as against the 5 grievants retired and the 10 grievants declared redundant
  3. 3.Whether the appellant had a valid reason to terminate the grievants
  4. 4.Whether the learned judge erred in law and fact in failing to compute the actual decretal sum payable to each individual grievant
  5. 5.Whether the award of the equivalent of 10 months' salary and 45 days in lieu of notice were payable to the 5 grievants that were retired
  6. 6.Whether the grievants declared redundant were entitled to severance pay and to compensation equivalent to 10 months' salary, and whether the said relief was prayed for or pleaded

Key legal issues

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01

Validity and binding effect of the Recognition Agreement and CBA

Holding

The CBA was valid and binding; the pending but incomplete process before the National Labour Board did not vitiate it

Reasoning

The appellant bore the burden of proving that the CBA had been vitiated by the respondent's neglect or violation but adduced no evidence. The only evidence was that review was pending before the National Labour Board, a process incomplete when the claim was filed. Since the CBA was signed and registered, it remained binding on the appellant including as to notice obligations.

p. 9
02

Compliance of the redundancy notices with section 40 of the Employment Act

Holding

The notices of 12th August 2020 and 28th August 2020 were invalid for failure to serve the union and the correct labour office and for giving only a 3-day quit notice instead of one month

Reasoning

Section 40(1)(a) requires notification of the union and the labour officer in charge of the area where the employees are employed. Service on the Nairobi labour office for employees based in Kisumu, Eldoret, Nanyuki and Nakuru did not meet that requirement. The letter of 28th August gave effectively 3 days' notice, contrary to the statutory one-month requirement and the CBA.

p. 10
03

Validity of the retirement notices under Clause 22 of the CBA

Holding

The retirement notices were invalid because the employer did not give the 45 days' written notice required by CBA Clause 22(e) where the employer initiates retirement

Reasoning

Clause 22(e) of the CBA requires 45 days' written notice for retirement initiated by the employer. The grievants received only a general factory-gate notice and a 3-day individual notice. The appellant also did not show that those retired had attained the retirement age of 60 years prescribed by the CBA.

p. 10
04

Whether the appellant had a valid reason for the terminations

Holding

The covid-19 pandemic and its effect on operations was a valid reason, unlike the trial judge's finding, but implementation was procedurally irregular and opaque

Reasoning

The court took judicial notice that the pandemic affected the whole economy and downsized operations, so the reason was valid and genuine. However, validity of reason does not cure procedural failure: the required notices and notice periods were ignored, the union's request for a meeting was rebuffed, and no selection criteria under section 40(1)(c) were demonstrated.

p. 12
05

Quantum of compensation for both the retired and the redundant employees

Holding

The award of 10 months' salary as compensation was excessive; four months was substituted

Reasoning

The trial judge did not show any basis for choosing 10 months' compensation. Given that the underlying reason was the covid-19 pandemic which affected the entire economy including the appellant, 10 months was on the higher side. The appellate court considered four months sufficient for both categories of employees.

p. 13
06

Entitlement to severance (service) pay for the declared redundant employees

Holding

Severance pay was payable under CBA clauses 6(c) and 23(d); the claim was pleaded and the appellant could not renege on the negotiated CBA

Reasoning

Prayer B(i) of the claim sought notice and severance (service) pay per the CBA where redundancies were upheld. Clause 23(d) of the CBA entitles a redundant employee to service pay as provided under clause 6(c), which prescribed 30, 50 or 60 days' pay depending on years of service. A court cannot rewrite the contract; the CBA was signed and binding.

p. 15
07

Failure to compute the decretal sum per individual grievant

Holding

That ground of appeal was moot because the trial judge delivered a subsequent judgment on 12th April 2024 tabulating the amounts due to each grievant

Reasoning

Following directions, the learned Judge entered judgment on the tabulation on 12th April 2024, awarding each grievant amounts set out in attached tables, resolving the only points of disagreement on severance and notice pay. Nothing remained for this Court to determine on that ground.

p. 13

Legal principles established

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  • Where an employee is a member of a trade union, notice of intended redundancy must be served on the union and on the labour officer in charge of the area where the employee is employed, not less than a month before the intended termination; a general notice posted on a factory gate does not comply
  • A valid reason for termination based on operational requirements does not excuse non-compliance with the prescribed procedure; procedural irregularity renders the terminations unfair
  • A registered CBA remains valid and binding until any process for its termination or review is complete, and a CBA cannot be vitiated constructively
  • A court cannot rewrite a contract between parties; they are bound by its terms unless coercion, fraud or undue influence are pleaded or proved

Court orders

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  1. 1.The award of compensation equivalent to 10 months' salary for the employees rendered redundant and those retired is set aside and, in substitution thereof, compensation equivalent to four months is ordered
  2. 2.The rest of the orders by the learned trial Judge are confirmed and upheld
  3. 3.The appellant will meet half the costs of appeal of the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
Employment and Labour Relations Court at Nairobi
ELRC Cause No E490 of 2020
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (first appeal from the Employment and Labour Relations Court)

Relief refused

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Substitution of trial court awards with dismissal of the respondent's claim

The appeal succeeded only in part; the trial court's orders were otherwise confirmed

p. 15

Costs

The appellant will meet half the costs of appeal of the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

That the award of Compensation equivalent to 10 months’ salary for the employees rendered redundant and those retired be and is hereby set aside and in substitution thereof, compensation equivalent to four months is ordered.
p. 15Final orders - reduction of compensation to four months
The rest of the orders by the learned trial Judge are confirmed and up held.
p. 15Final orders - confirmation of trial court orders
The appellant will meet half the costs of appeal of the respondent.
p. 15Costs of appeal
The reasons for the terminations though valid, the appellant went about efiecting them in a manner that demonstrated significant procedural irregularity.
p. 12Valid reason vs fair procedure
That service did not meet the requirement of section 40 (1)(a), service having not been efiected upon the labour oficer in charge of the area where the afiected employees were employed, and was invalid.
p. 10Service of redundancy notice under section 40(1)(a)
A court of law cannot rewrite a contract between parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue infiuence are pleaded or proved.
p. 15Binding nature of a negotiated CBA

Issues in the judgment

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minor

The judgment attributes a quotation from Kenya Airways Limited to 'Githinji, JA' while noting the decision was by a differently constituted court; the attribution relies on the text as reproduced and could not be independently verified within this judgment

minor

Clause 22 of the CBA is quoted inconsistently within the judgment: the retirement entitlement sub-clauses are labelled (d), (e), (f) and (g) in one passage, while the trial court's orders and the appellant's challenge refer to notice of 45 days as per Clause 22(f) and 70 days service pay per Clause 22(d)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "London Distillers (K) Limited v Kenya Union of Commercial Food & Allied Workers (Civil Appeal E051 of 2022) [2025] KECA 216 (KLR)", Case Analysis (2025). Court of Appeal Appeal from ELRC Cause No E490 of 2020 (memorandum of appeal dated 7th February 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/216/eng@2025-02-07

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.