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ELRCPartially AllowedNot stated in judgment· [2023] KEELRC 3305 (KLR)

Akumu v Bidcoro Africa Limited (Employment and Labour Relations Cause 298 of 2019) [2023] KEELRC 3305 (KLR)

Employment and Labour Relations Court
20 December 2023
1,677 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court awarded an employee nearly KShs 2 million because his employer skipped the mandatory one-month notice steps for redundancy under section 40 of the Employment Act.

What this practically means

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Executive summary

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The claimant, employed on 25th January 2018 as Purchasing and Supplying Manager on a two-year fixed term contract at a gross monthly salary of Kshs. 420,000/=, was confirmed after probation by letter dated 23rd July 2018. On 15th October 2018 he received a letter terminating his employment on grounds of redundancy, the respondent citing economic circumstances requiring review of its operational structure and manpower requirements. The claimant sued for reinstatement or, in the alternative, compensation for unlawful termination, contending the mandatory procedure under section 40 of the Employment Act was not followed. The respondent admitted the employment particulars and asserted a valid reason and due process. The court framed three issues: valid reason, fair procedure, and entitlement to reliefs. It found the respondent had a valid reason to reduce staff but gave no reasons for targeting the claimant. Procedurally, the claimant was personally notified of termination on the very day it took effect, contrary to section 40(1)(b); termination was implemented before expiry of the one-month notice given to the Ministry of Labour; and notice pay was short-paid. The court held the termination unlawful and unfair, noting the claimant's legitimate expectation to serve the full two-year fixed term. Guided by cited authorities, the court awarded four months' salary (Kshs. 1,680,000/=) as compensation and Kshs. 280,000/= as the balance of notice pay, totaling Kshs. 1,960,000/=, with interest at court rates from the date of judgment and costs of the suit to the claimant. Judgment was delivered at Nairobi on 20th December 2023 by Mathews N. Nduma, Judge.

Key legal issues

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01

Validity of reason for redundancy

Holding

The respondent had a valid reason to reduce its employees but gave no reasons why it targeted the claimant in particular.

Reasoning

RW1 testified that the company's performance was reviewed and found wanting, prompting a redundancy. The court accepted the economic rationale as valid but noted the respondent provided no reasons for selecting the claimant, a matter requiring discussion during the notice period under section 40(1)(c). The failure was procedural rather than going to the validity of the redundancy itself.

p. 4
02

Fairness of procedure under section 40 Employment Act

Holding

The procedure was unfair: no one month's personal written notice, notice to the Ministry expired before termination, and notice pay was short-paid.

Reasoning

The claimant was personally notified of termination on 15th October 2018, the same day he received the termination letter, breaching section 40(1)(b). The Ministry of Labour notice given on 1st October 2018 would expire on 30th October 2018, yet termination was implemented earlier. Notice pay of Kshs. 154,000/= fell short of one month's gross salary of Kshs. 420,000/= without explanation.

p. 3
03

Remedies for unlawful and unfair redundancy termination

Holding

Compensation of four months' gross salary (Kshs. 1,680,000/=) plus the balance of one month's salary in lieu of notice (Kshs. 280,000/=).

Reasoning

The claimant served nine months of a two-year fixed term contract and had a legitimate expectation to serve the full term. He lost his job and income without notice and was not adequately compensated. Having regard to cited authorities and circumstances, the court awarded four months' salary and topped up the deficient notice pay.

p. 4

Legal principles established

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  • An employer must notify an employee not in a trade union personally in writing of intended redundancy not less than one month before the termination date, as required by section 40(1)(b) of the Employment Act.
  • Termination on grounds of redundancy implemented before expiry of the one-month notice period given to the Ministry of Labour is unlawful and unprocedural.

Court orders

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  1. 1.Kshs. 1,680,000/= in compensation for unlawful and unfair termination
  2. 2.Kshs. 280,000/= in lieu of notice
  3. 3.Total amount Kshs. 1,960,000/=
  4. 4.Interest at court rates from date of judgment till payment in full
  5. 5.Costs of the suit to the claimant
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "Akumu v Bidcoro Africa Limited (Employment and Labour Relations Cause 298 of 2019) [2023] KEELRC 3305 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3305/eng@2023-12-20

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