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ELRCPartially AllowedNot stated in judgment (Statement of Claim dated 13th January 2022)· [2025] KEELRC 1712 (KLR)

Mutuse v Proto Energy Limited (Cause E021 of 2022) [2025] KEELRC 1712 (KLR)

Employment and Labour Relations Court
12 June 2025
9,343 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~37 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that an employer who skips the required notice steps in a redundancy has unfairly terminated the employee and must pay compensation.

What this practically means

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Executive summary

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The claimant, a Site Engineer/Manager employed by Proto Energy Limited in March 2017, sued for unfair termination after his employment ended by a letter dated 30th September 2021 citing redundancy arising from proposed changes in the company structure. He sought declarations of unfair termination and constitutional infringement, 12 months' salary as compensation, unpaid study-leave salary and pension, untaken leave, and general damages of Kshs 5,000,000. The respondent maintained the redundancy was genuine, driven by COVID-19 business downturn, and compliant with section 40 of the Employment Act, attributing contradictory dates in the termination letter to clerical errors. The court found the redundancy procedurally flawed: the notice to the County Labour Officer was never concurrently given to the claimant as required by section 40(1)(b); no consultation occurred; the termination letter backdated effect to 19th September 2021; and the unresolved disciplinary process over the Nakuru plant showed the redundancy was a pretext. Only one position was notified as redundant, contradicting the respondent's witness. Applying Kenya Airways v Aviation & Allied Workers Union, the termination was held unfair under section 45. Compensation of six months' gross salary (Kshs 1,200,000) was awarded under section 49. The study-leave salary claim of Kshs 2,400,000 succeeded as a continuing wrong within limitation. Discrimination and constitutional claims failed for want of evidence; the leave and pension claims were dismissed, the latter as double payment. Interest, costs to the claimant, and a 30-day stay were granted.

Key legal issues

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01

Whether the termination on account of redundancy was procedurally fair under section 40 of the Employment Act

Holding

Unfair: the respondent notified only the labour officer without concurrent written notice to the claimant, did not consult him, and the redundancy letter took effect from a date before it was issued

Reasoning

The court found the notice to the County Labour Officer dated 16th August 2021 was never copied to or shared with the claimant, contrary to section 40(1)(b) which requires concurrent personal written notice. The claimant first learned of the redundancy on receipt of the termination letter dated 30th September 2021 backdated to 19th September 2021. The court rejected the respondent's 'clerical error' explanation. No consultative meetings were evidenced, and the selection criteria targeting only the claimant's position were not justified.

p. 11
02

Whether the redundancy was substantively justified or a disguised disciplinary termination

Holding

The redundancy was a pretext to dismiss the claimant following unresolved disciplinary proceedings over the Nakuru plant

Reasoning

The disciplinary outcome was never communicated despite follow-ups, yet the claimant was terminated shortly after. Although RW1 testified several staff were affected, only one position was notified to the labour office as declared redundant, rendering her testimony untrue. The respondent was declared an essential service provider operating during COVID-19, undermining the business-downturn justification, and the court found no conclusive proof that the alleged foreign workers taking over duties justified the redundancy.

p. 12
03

Whether the constitutional and discrimination claims were established

Holding

Dismissed for lack of evidence of discrimination

Reasoning

The claimant alleged his duties were taken over by foreign nationals earning more, but produced no evidence of their nationalities or remuneration, and discrimination on a prohibited ground was not demonstrated. The infractions were sufficiently addressable under the Employment Act, and compensation for unfair termination had already been awarded, so no separate constitutional damages were warranted.

p. 15
04

Whether the claim for unpaid salary during study leave was time-barred under section 90 of the Employment Act

Holding

Not time-barred: it was a continuing wrong giving rise to a fresh cause of action monthly; limitation ran from termination on 30th September 2021, and the claim filed in January 2022 was within time

Reasoning

Applying the continuing-wrong principles from M.R. Gupta v Union of India as adopted by the Court of Appeal in The German School Society & another v Ohany, the court held that a fresh cause of action arose each month the agreed study-leave salary was not paid. The study leave was approved as paid leave, which was undisputed, and the respondent offered no defence for non-payment. The claim for Kshs 2,400,000 was allowed.

p. 16
05

Quantum of compensation for unfair termination under section 49 of the Employment Act

Holding

Six months' gross salary, Kshs 1,200,000, awarded taking into account four years of service, innocence of contribution, employability and receipt of severance

Reasoning

Guided by section 49(4) factors: the claimant served four years (one on study leave), was innocent of any contribution since the position was declared redundant, was a qualified professional engineer likely to secure comparable employment, and had already been paid severance. Twelve months' salary as sought was considered excessive in these circumstances.

p. 14

Legal principles established

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  • Where an employee is not a member of a trade union, the notification to the labour officer must be concurrent with notice to the employee personally in writing; notification of the labour officer alone does not satisfy section 40(1)(b) of the Employment Act
  • Failure to comply with the mandatory conditions in section 40 of the Employment Act renders a termination on account of redundancy unfair within the meaning of section 45
  • A claim for unpaid salary during employment is a continuing wrong giving rise to a fresh cause of action each month while the employee remains in service, so limitation under section 90 of the Employment Act runs from cessation of employment
  • A claim for annual leave is a special damage claim that must be pleaded and proved with specificity

Court orders

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  1. 1.Judgment entered for the claimant against the respondent
  2. 2.Compensation for unfair termination equivalent of 6 months' gross salary Kshs 1,200,000/=
  3. 3.Unpaid salary during study leave Kshs 2,400,000
  4. 4.Interest at court rates from the date of judgment
  5. 5.Costs of the suit to the claimant
  6. 6.Stay of 30 days granted
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (sections 40, 43, 45, 49, 89/90) over unfair termination claim

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mutuse v Proto Energy Limited (Cause E021 of 2022) [2025] KEELRC 1712 (KLR)", Case Analysis (2025). Not stated in judgment (Statement of Claim dated 13th January 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1712/eng@2025-06-12

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