Wazir v Redstar International Limited (Cause E477 of 2023) [2024] KEELRC 1971 (KLR)
The bottom line
#A Kenyan employer's redundancy was ruled unfair because it paid notice money instead of giving the required one-month redundancy notice, costing it over Kshs 731,000.
What this practically means
#Executive summary
#Key legal issues
#Substantive justification of the redundancy
The Respondent failed to prove a valid and fair reason for the redundancy
The letter of termination cited rationalisation of expenses due to lack of new orders. The court held that the employer was at liberty to reorganise its enterprise but was duty-bound to prove, to the requisite standard, that the redundancy was genuine and justified under Section 45(2)(b)(ii) of the Employment Act. No evidence in any form was adduced, so the reason was not proved valid and fair.
Procedural fairness under Section 40(1) of the Employment Act
The Respondent failed to give the mandatory one-month notice of intention to declare redundancy, failed to notify the labour officer, and did not hold pre-redundancy consultations
What was issued was a letter of termination, not a notice of intention to declare redundancy. Payment of one month's salary in lieu of notice is a separate requirement under Section 40(1)(f) and cannot cure the absence of notice under 40(1)(b). No notice was proved to the labour office, and no consultations consistent with ILO Convention No. 158 were held. Leave taken after termination was unpaid, breaching 40(1)(e).
Selection criteria under Section 40(1)(c)
Not applicable as there was only one Showroom Manager
The requirement to have regard to seniority, skill, ability and reliability applies where there are several employees in the affected class. The record showed no other employees serving as Showroom Managers, so no selection criterion was needed.
Entitlement to reliefs
One month's notice pay, three months' compensatory damages and unpaid leave days awarded; holiday pay claim declined
Given the finding of unfair termination, the court awarded notice pay and compensatory damages equivalent to three months' gross salary, factoring in the short length of employment and circumstances of the termination. Nine leave days were awarded as there was no evidence of payment for leave taken post-termination. The holiday pay claim failed for want of evidence.
Legal principles established
#- Termination of employment through redundancy must be both substantially justified and procedurally fair
- Payment of one month's salary in lieu of notice does not replace the mandatory one-month notice of intended redundancy under Section 40(1)(b) of the Employment Act
- The notice under Section 40(1)(b) is a notice of intention to declare redundancy, issued before the redundancy itself
- An employer bears the burden of proving a valid and fair reason for redundancy-based termination, failing which the termination is unfair under Section 45(2)(b)(ii)
Court orders
#- 1.A declaration that the Claimant was unfairly terminated from employment
- 2.One month's salary in lieu of notice of Kshs 170,000.00
- 3.Compensatory damages of Kshs 510,000.00 (equivalent to three months' gross salary)
- 4.Kshs 51,000.00 for unpaid leave
- 5.Interest on the total award of Kshs 731,000.00 at court rates from the date of Judgment until payment in full
- 6.The Claimant shall have the costs of the Claim
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; Memorandum of Claim under the ELRC procedure)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Wazir v Redstar International Limited (Cause E477 of 2023) [2024] KEELRC 1971 (KLR)", Case Analysis (2024). Statement of Claim dated 14th June 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1971/eng@2024-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.