Shadrack Otuoma Khamla & 7 others v Aniket Enterprises Limited [2018] KEELRC 1993 (KLR)
The bottom line
#A Kenyan court ruled these redundancies unfair because the employer never notified the Labour Officer in advance and couldn't prove its reasons in court.
What this practically means
#Executive summary
#Key legal issues
#Substantive fairness of redundancy terminations
Terminations on account of redundancy were substantively unfair because the Respondent failed to prove the operational reasons in accordance with sections 43 and 45(2)(b)(ii) of the Employment Act.
The termination letters cited market/economic effects causing drastic reduction of work, which would have constituted valid reasons if proved under sections 43 and 45(2)(b)(ii). The Respondent did not attend Court to discharge the employer's burden under sections 43, 45 and 47. The Court therefore concluded the redundancy terminations were substantively unfair.
Procedural fairness of redundancy terminations
Terminations were procedurally tainted because there was no evidence that the Labour Officer was notified in advance as required by section 40(1)(b).
Notices were allegedly issued to and acknowledged by the Claimants, and union records were filed, but there was no evidence the Labour Officer was notified in advance. Relying on Thomas De La Rue (K) Ltd v David Opondo Omutelema, notification to the labour officer is required in both union and non-union situations. The Labour Office was involved only after the decision to terminate.
Remedies - notice pay and compensation
Claimants entitled to balance of one month's notice pay under section 40(1)(f) and compensation equivalent of 2 months' gross wages each, considering service pay already paid and service of 2 to 7 years.
Section 40(1)(f) obliges the employer to pay one month's wages in lieu of notice; only 10 days were paid, so the balance is due. Considering service pay already made and service ranging from 2 to 7 years, 2 months' gross wages as compensation was found appropriate and fair for each Claimant.
Legal principles established
#- An employer who fails to discharge the burden imposed by sections 43, 45 and 47 of the Employment Act cannot establish valid and fair reasons for termination; unproved redundancy terminations are substantively unfair.
- Redundancy requires notice to the local Labour Officer in advance in terms of section 40(1)(b) of the Employment Act; involvement of the Labour Officer only after the decision to terminate renders the termination procedurally unfair.
- In redundancy an employer must pay the equivalent of one month's wages in lieu of notice under section 40(1)(f); payment of a lesser period (e.g. 10 days) entitles the employee to the balance.
Court orders
#- 1.A declaration that the termination of the Claimants' contracts on account of redundancy was unfair
- 2.Awards to the 1st, 5th, 6th, 7th and 8th Claimants of Kshs 10,000/- notice pay and Kshs 20,000/- compensation each (Kshs 30,000/- total each)
- 3.Award to the 4th Claimant of Kshs 9,500/- notice pay and Kshs 19,000/- compensation (Kshs 28,500/- total)
- 4.The Respondent to deduct the portion of 10 days' notice already paid to the Claimants from the awards
- 5.Claims of the 2nd and 3rd Claimants dismissed for failure to produce pay/terminal records
- 6.Claims for leave balance, overtime/off duties, house allowance and underpayment of salaries declined
- 7.Claimants denied costs for late filing of submissions
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 40, 43, 45 and 47 applied)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shadrack Otuoma Khamla & 7 others v Aniket Enterprises Limited [2018] KEELRC 1993 (KLR)", Case Analysis (2018). not stated in extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1993/eng@2018-05-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.