Fursys Kenya Limited v Oyare (Appeal E046 of 2021) [2023] KEELRC 2846 (KLR)
The bottom line
#An employer who skips the mandatory 30-day redundancy notice risks paying a full year's salary in compensation, even if the redundancy itself was genuine.
What this practically means
#Executive summary
#Key legal issues
#Compliance with Section 40(1)(b) of the Employment Act - notice of intended redundancy
The Appellant did not issue the requisite 30 days' notice of intended redundancy to the Respondent and the Labour Office; the letter of 7th August 2019 was an immediate termination notice and the letter of 22nd August 2019 was a post-termination notification, so the termination was unfair
The Court re-evaluated the two letters. The termination letter took effect immediately rather than giving 30 days' notice, and its purpose was to terminate, not to notify of an intention to declare redundancy. The letter to the Labour Office merely forwarded the termination letter after the fact. Section 40(1)(b) contemplates advance written notice to both the employee and the labour officer to open consultations, which never occurred. The trial Magistrate therefore did not err.
Whether the Cargill Kenya Limited decision assisted the Appellant
The Court distinguished Cargill Kenya Limited v Mwaka, holding that the point in that case was whether an employer must issue two notices (notice of intention and a subsequent termination notice); Section 40 contemplates only a notice of intended redundancy, which the Appellant never gave
The Court found the Appellant had misapprehended Cargill. The Court of Appeal there addressed whether Section 40 requires two successive notices and held only a notice of intended redundancy is contemplated. That is precisely what the Appellant failed to issue, so the authority did not advance its case and was effectively distinguished.
Whether the findings of redundancy and unfair termination are contradictory
They are not contradictory; the trial Magistrate's statement referred to procedural fairness in the redundancy process, and Section 45(2) on procedural and substantive fairness applies to redundancy terminations
Relying on Kenya Airways Ltd v Aviation & Allied Workers Union, the Court held redundancy is a legitimate ground for termination if there is a valid and fair reason and a fair procedure. The trial court's twin findings addressed substantive validity (redundancy) and procedural fairness (unfair termination), which coexist. Section 45(2) applies to redundancy terminations.
Whether the award of 12 months' gross salary compensation under Section 49(1)(c) was excessive
The trial court gave reasons for the award and considered the Section 49(4) factors; no sufficient basis was shown to interfere with the exercise of discretion per Mbogo v Shah, so the award stands
Compensation under Section 49(1)(c) is discretionary and must consider the Section 49(4) factors. The Court was satisfied the Magistrate's judgment showed awareness of and consideration of those factors. Applying the Mbogo v Shah parameters, the Appellant did not demonstrate misdirection, reliance on wrong matters, or failure to consider relevant matters, so the maximum award could not be disturbed.
Legal principles established
#- Where an employee is not a member of a trade union, the employer must give not less than thirty days' written notice of intended redundancy to the employee personally and to the labour officer; a termination letter with immediate effect and a post-termination letter to the labour office do not satisfy Section 40(1)(b)
- A letter to the labour office notifying it of an already-effected termination is not a notice of intended redundancy under Section 40(1)(b)
- The requirement for consultation is implied in Section 40 of the Employment Act as the rationale for the notices in Section 40(1)(a) and (b)
- Findings that an employee was declared redundant and yet unfairly terminated are not contradictory; redundancy is a legitimate ground for termination provided the reason is valid and the procedure fair
Court orders
#- 1.The Appeal is dismissed
- 2.Costs of the appeal awarded to the Respondent
- On appeal from
- Chief Magistrates Court (Employment and Labour Relations)
- CMEL Cause No. 1413 of 2019
- Jurisdiction invoked
- First appellate jurisdiction over the magistrates' court (ELRC appeal against judgment of Senior Resident Magistrate in CMEL Cause)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Fursys Kenya Limited v Oyare (Appeal E046 of 2021) [2023] KEELRC 2846 (KLR)", Case Analysis (2023). ELRC Appeal filed 29th April 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2846/eng@2023-10-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.