Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers v Game on Solutions (K) Limited (Cause E081 of 2021) [2024] KEELRC 2790 (KLR)
The bottom line
#Kenya's Employment Court ruled that an employer cannot use redundancy to skip the mandatory procedure or avoid paying workers their terminal dues.
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 grievants' employment on account of redundancy complied with the mandatory conditions in Section 40 of the Employment Act
- 2.Whether the failure to pay terminal dues rendered the terminations wrongful and unfair
- 3.What remedies (compensation, notice pay, severance pay, leave pay) and costs are due to the grievants
Key legal issues
#Compliance with Section 40 redundancy procedure
The redundancy was procedurally flawed: notice took effect on the same day and no notice was issued to the labour officer
Section 40 requires not less than one month's notice of the reasons for and extent of the redundancy to the employee, the trade union and the labour officer, payment of leave dues and severance at 15 days per full year. Here the notice was issued on the day employment terminated and there was no notice to the labour officer, breaching the mandatory conditions.
Unfair termination for failure to pay terminal dues
Failure to pay terminal dues despite the redundancy notice rendered the termination unfair and entitled the grievants to compensation
Although financial difficulties justify redundancy, the employer must still pay terminal dues. The respondent offered payments in its notice but filed no work records to confirm payment and did not attend hearing. Failure to pay amounts to unfair termination, justifying compensation of 6 months' pay per grievant.
Evidentiary burden where employer fails to file work records
The employer's failure to file work records required under Sections 10(6) and (7) of the Employment Act meant its denials could not stand
The employer was obliged to keep and produce work records; having filed a response of mere denials, did not attend hearing and called no evidence, the court drew adverse inferences and found the claimant's account on payment of dues uncontroverted.
Legal principles established
#- The conditions in Section 40 of the Employment Act for termination on account of redundancy are mandatory, including one month's notice to the employee, the trade union and the labour officer, and payment of leave and severance pay
- An employer must justify the reasons leading to redundancy; in the absence of justification and due process, termination is unfair and compensation is due
- Even where termination on operational grounds is justified, affected employees must be paid their terminal dues; failure to pay amounts to unfair termination
- Service pay and severance pay are foundationally different payments; severance pay under Section 40 is what is due on redundancy
Court orders
#- 1.A declaration that there was wrongful and unfair termination of employment
- 2.Compensation to each grievant at 6 months of the gross wage
- 3.Severance pay at 15 days for each full year worked
- 4.One-month notice pay to each grievant
- 5.Leave pay as set out in the Memorandum of Claim
- 6.Costs assessed at Ksh. 100,000 all-inclusive
- 7.The claimant to tabulate the dues and submit for adoption on 18 December 2024 for the 24 listed grievants
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original employment and labour relations jurisdiction of the Employment and Labour Relations Court (dispute referred under the Labour Relations Act; claims under Articles 41 and 47 of the Constitution and the Employment Act)
Relief refused
#Notice pay beyond one month (claims of two or three months based on a collective agreement)
The CBA relied on was not filed; only the legal minimum of one month's notice under Section 40(1)(f) was awarded
Compensation at 12 months' salary as claimed
The court awarded 6 months' pay instead of the 12 months claimed for each grievant
Costs
Costs allowed and assessed at Ksh. 100,000 all-inclusive
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.
However, Section 40 of the Employment Act gives the conditions that the employer must address. These conditions are mandatory;
A redundancy should not be used to deny the employees their lawful terminal dues. Such conduct is tantamount to unfair termination of employment
the employer must justify the reasons leading to redundancy. In the absence of such a matter, termination of employment is unfair.
Accordingly, the claim is hereby allowed against the respondent in the following terms; a. There was wrongful and unfair termination of employment;
The grievants are awarded compensation at 6 months of the gross wage each;
f. Costs assessed at ksh.100,000 all-inclusive;
Issues in the judgment
#The list of grievants in the memorandum of claim names 24 persons, but the concluding order lists 'Hesborn Ndumbu' (elsewhere 'Hesbon Ndumbu') and ends with 'Esther Wangare' (listed as Shilah Wairimu in the claim; 'Alen Jimson Mwamuzi' vs 'Alan Jimson Mwamuzi Tole'; 'Riziki Katana Kalachu' vs 'Riziki Katana Kilachu') - spelling inconsistencies and a name ('Esther Wangare') not matching the pleaded list
Internal inconsistency: the memorandum asserts all grievants were terminated on 8 May 2019 with durations of 5+ years, yet some grievants are recorded as employed in 2017 with service of under 2 years (e.g. Eunice Akoko, employed 5 September 2017)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Domestic, Hotels, Educational Institutions and Hospital Workers v Game on Solutions (K) Limited (Cause E081 of 2021) [2024] KEELRC 2790 (KLR)", Case Analysis (2024). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2790/eng@2024-11-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.