Oguda v Home Afrika Limited (Employment and Labour Relations Cause E476 of 2021) [2023] KEELRC 3275 (KLR)
The bottom line
#A Kenyan court ruled an employer's redundancy unlawful because it skipped mandatory notice steps, awarding the employee five months' salary plus costs.
What this practically means
#Executive summary
#Key legal issues
#Exhaustion of internal dispute resolution mechanisms
The Claimant was not bound to exhaust the Respondent's internal appeal process; the termination letter did not make it mandatory and no HR Manual was produced to prove such an obligation.
The termination letter merely invited the Claimant to appeal if he wished; it did not oblige him to do so. The Respondent did not tender its Human Resource Manual in evidence, so the court could not assume an obligation to exhaust. Clause 19.1 of the appointment letter recognised the parties' right to submit disputes to the court, and this dispute fell within that clause.
Lawfulness of the redundancy
The redundancy was irregular and unlawful because the statutory procedure under section 40 of the Employment Act was not followed.
There was no one-month notice of intended redundancy to the Claimant, no notice to the local labour office, and no evidence of a transparent selection process, despite several employees being affected. The only notice was the immediate termination letter of February 8, 2021, which was not a redundancy notice contemplated by section 40(1)(a) and (b).
Reliefs: compensation and notice pay
The Claimant, having lost employment through an irregular process, was awarded four months' salary as compensation under section 49 plus one month's salary in lieu of notice under clause 12 of his contract.
The court considered the approximately four years of service, that the Claimant's conduct did not contribute to the termination, and the grave effects of the Covid-19 pandemic on employers, concluding four months' gross salary was adequate. Notice pay was awarded under clause 12 of the contract. Payments made post-exit were held to be part settlement of acknowledged indebtedness, not severance or notice pay.
Legal principles established
#- Failure by an employer to follow the redundancy procedure prescribed under section 40 of the Employment Act renders the entire redundancy process invalid.
- An employer invoking internal dispute resolution/exhaustion must tender evidence (e.g. the HR Manual) establishing an obligation to exhaust before the court may find a claim premature.
- A contract of service cannot be varied without the employee's involvement.
Court orders
#- 1.Declared that the redundancy declaration in respect of the Claimant's position was irregular and unlawful
- 2.Declared that the Claimant's contract of service was unlawfully terminated
- 3.Awarded the Claimant compensation for unfair termination equivalent to four months' salary: Ksh. 474,344.00 x 4 = Ksh. 1,897,376.00
- 4.Awarded the Claimant salary in lieu of notice equivalent to one month's salary, Ksh. 474,344.00
- 5.Awarded interest on the above amounts at court rates from the date of judgment
- 6.Award made subject to applicable statutory deductions
- 7.Awarded the Claimant costs of the case
- 8.Any other relief not granted deemed declined
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court over employment disputes; parties' letter of appointment recognised the court's jurisdiction (clause 19.1)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Oguda v Home Afrika Limited (Employment and Labour Relations Cause E476 of 2021) [2023] KEELRC 3275 (KLR)", Case Analysis (2023). not stated in the judgment provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3275/eng@2023-12-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.