Anne Njambi Ngugi v Mediamax Network Limited [2020] KEELRC 1801 (KLR)
The bottom line
#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 termination of the Claimant's employment on account of redundancy was procedurally fair under section 40 of the Employment Act
- 2.Whether the Respondent proved valid operational reasons for the redundancy (substantive fairness under sections 43 and 45(2)(b)(ii))
- 3.Whether the termination discriminated against the Claimant on the basis of pregnancy
- 4.Whether the Claimant was underpaid
- 5.What remedies, if any, the Claimant is entitled to (general damages, severance pay, service pay, compensation, certificate of service)
Key legal issues
#Procedural fairness of the redundancy under section 40 of the Employment Act
The Respondent substantially complied with section 40: it issued a general notice, a specific notice to the Claimant copied to the Provincial Labour Officer, and the Claimant waived the 30 days' notice and was paid in lieu.
The Claimant was not a union member, so the union-notification conditions did not apply. The Court of Appeal in Thomas De La Rue was applied for the purposive reading that the same one-month notice period applies to non-union employees. The specific notice was copied to the Labour Officer, and although the effective dates in the notice were vague, the Claimant waived the notice period and was paid in lieu, amounting to substantial compliance.
Substantive fairness - proof of valid operational reasons
The Respondent failed to discharge the burden of proving valid operational reasons for the redundancy; the termination was substantively unfair.
Sections 43 and 45(2)(b)(ii) place the burden on the employer to prove the reasons for termination. The grounds advanced (restructuring, organisational efficiency, market challenges, economic downturn) were general statements unsupported by evidence such as industry trends or financial statements, and no studies establishing business-model inefficiency were disclosed. No alternatives such as pay cuts or redeployment were discussed with the Claimant before the dismissal.
Remedies for unfair termination
Compensation of Kshs 500,000/- awarded; general damages, service pay and severance pay refused; certificate of service to be collected by the Claimant.
Compensation is discretionary under section 49(4). Although not explicitly pleaded, it flows logically from a finding of unfair termination. The Respondent had paid salary in lieu of notice beyond what the contract provided, which informed the modest award. Service pay was barred by section 35(5) & (6) because the Claimant was eligible for a pension scheme and contributed to the NSSF. General damages lacked evidential and legal foundation.
Legal principles established
#- An employer bears the burden of proving valid operational reasons for a redundancy; general assertions of market challenges or economic downturn without evidential material do not discharge that burden.
- Where genuine redundancy reasons exist, discussions with employees should include alternatives such as pay cuts and other roles before dismissal.
- Compensation under section 49 may be awarded even where not explicitly pleaded, as a remedy that logically flows from a finding of unfair termination.
- Severance pay under section 40(1)(g) is payable on a pro-rata basis even to employees who have not completed a year of service.
Court orders
#- 1.Declaration that the Respondent did not prove the existence of valid operational reasons to terminate the Claimant's contract and that the termination was unfair
- 2.Award of compensation of Kshs 500,000/- to the Claimant
- 3.Claimant to collect her certificate of service from the Respondent if not already collected
- 4.Each party to bear own costs
- 5.Claimant denied the 8-month severance pay
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment cause)
Relief refused
#General damages for financial, professional and career embarrassment
No evidential or legal foundation laid; no disclosure of the species of tort or contractual obligation
Severance pay of Kshs 6,000,000/- (12 months' salary)
Court awarded compensation instead and denied the 8-month severance pay despite finding entitlement to pro-rata severance
Service pay of Kshs 125,000/-
Claimant was eligible to join a pension scheme and was contributing to the NSSF, disqualifying service pay under section 35(5) & (6)
Costs of the action
Each party directed to bear own costs
Costs
Each party to bear own 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.
In the circumstances, the Court finds that the Respondent did not discharge to the required standard, the burden of proving the existence of valid operational reasons to declare the Claimant’s position redundant.
where there are genuine and valid redundancy reasons, discussions with the employees should include possibilities of pay cuts and other roles before the ultimate decision to dismiss is taken.
That was a misapprehension of the law, and the Claimant was entitled to severance pay on a pro-rata basis for the 8 months served.
There was even no disclosure as to what species of tort and/or contractual obligation this claim relates to. Relief is declined.
The Court finds and declares that the Respondent did not prove the existence of valid operational reasons to terminate the Claimant’s contract and therefore the decision was unfair.
Each party to bear own costs.
Issues in the judgment
#Internal inconsistency on severance pay: the Court held the Claimant was entitled to pro-rata severance for 8 months served, yet in the final orders denied her that severance while still awarding compensation
The compensation award in the numbered orders is stated as 'Compensation' with the figure 'Kshs 500,000/-' appearing after the costs order, creating formatting ambiguity
Case number of the Cause is not stated in the judgment text provided
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Anne Njambi Ngugi v Mediamax Network Limited [2020] KEELRC 1801 (KLR)", Case Analysis (2020). Cause not stated in judgment (ELRC Claim instituted 17 March 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1801/eng@2020-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.