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ELRCPartially AllowedNot stated in the judgment

Odhiambo v Prinias Enterprises Ltd t/a Prinias Hotel (Cause E031 of 2024) [2025] KEELRC 1774 (KLR)

Employment and Labour Relations Court
19 June 2025
2,597 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~10 min to read original · ~4 min brief

The bottom line

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A Kisumu court ruled a Covid-19 redundancy claim in 2023 was fake and awarded the employee over Kshs 4.3 million, plus costs and interest.

What this practically means

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Executive summary

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The Claimant, employed on 31st July 2018 at a monthly salary of Kshs. 100,000/-, was terminated on 30th September 2023 on account of redundancy. He sued seeking declarations of unfair termination and violation of Article 41 rights, invalidation of a post-termination settlement agreement, refunds of illegally deducted rent arrears and unpaid salaries, leave pay, severance, gratuity, notice pay, compensation and costs. The Respondent defended the termination as a Covid-19-driven redundancy effected with statutory compliance, and pleaded rent arrears of Kshs. 915,000/- offset against the redundancy package under the settlement agreement of 12th February 2024. Evidence showed the salary was unilaterally reduced from May 2020 for some 45 months despite a promise of only two months, and the Respondent's witness conceded the business had recovered, the hotel remained operational, and no tenancy agreement existed for the rent claim. The court held that Covid-19 ceased to be a pandemic in May 2023, making an October 2023 Covid-based termination disingenuous; the redundancy notice came a day before exit, statutory conditions in section 40(1) of the Employment Act were unmet, and the post-termination lease agreement and rent demand were illegal and unconscionable. The claim succeeded in full substance: the court awarded 12 months' salary (Kshs. 1,200,000/-), refund of Kshs. 930,000/-, refund of Kshs. 1,240,000/- in unpaid salaries, Kshs. 211,666.66 for untaken leave, Kshs. 250,000/- severance, Kshs. 500,000/- damages for Article 41 violations, plus costs and interest.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Claimant's termination was unfair and unlawful
  2. 2.Whether the Claimant was subjected to unfair labour practices
  3. 3.Whether the Claimant is entitled to other reliefs

Key legal issues

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01

Whether the redundancy was justified and procedurally compliant

Holding

The termination was grossly unfair and exceedingly unlawful; the redundancy was not justified as Covid-19 had subsided, notice was given only a day before exit, and statutory conditions under section 40(1) were not met

Reasoning

The court reasoned that Covid-19 ceased to be a pandemic in May 2023 per WHO, so terminating in October 2023 on that account was disingenuous. The redundancy notice came only a day before exit, dues were not paid in cash, and the employee was coerced into an illegal lease agreement. Section 40(1)(a)-(g) conditions were therefore not satisfied.

p. 6
02

Whether the demand for rent arrears of Kshs. 930,000/- and the settlement agreement of 12th February 2024 were lawful

Holding

The demand for alleged rent arrears was illegal and reversed; the post-termination lease/settlement agreement was unconscionable

Reasoning

The Respondent's own witness acknowledged there was no tenancy agreement supporting the rent arrears claim, and the demand was first raised after termination. The Claimant was coerced into signing the agreement under threat of receiving nothing. The deduction of Kshs. 930,000/- was accordingly illegal and ordered refunded.

p. 5
03

Whether the Claimant's constitutional rights under Article 41 were violated and whether the salary reduction constituted an unfair labour practice

Holding

The court awarded Kshs. 500,000/- as damages for violation of the Claimant's Article 41 rights, finding the unilateral salary reduction and unfair termination violated those rights

Reasoning

The salary was unilaterally reduced from May 2020 far beyond the promised two months, continuing for 45 months without consultation or written notification as required by section 10(5) of the Employment Act. Together with the unlawful termination, this amounted to a violation of the Claimant's fair labour relations rights under Article 41, attracting damages.

p. 6

Legal principles established

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  • Termination of an employee in October 2023 on account of Covid-19 is disingenuous, as the pandemic had ended by May 2023
  • Employers must strictly comply with the conditions in section 40(1) of the Employment Act, including personal written notice to non-union employees and the Labour Officer, before terminating on account of redundancy
  • Coercing an employee into signing an illegal 'lease' agreement after termination and demanding fictitious rent arrears is unconscionable and illegal

Court orders

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  1. 1.Kshs. 1,200,000/- in 12 months' salary as compensation for unlawful and unfair termination of employment
  2. 2.Refund of Kshs. 930,000/- which was illegally deducted
  3. 3.A refund of Kshs. 1,240,000/- in unpaid salaries
  4. 4.Kshs. 211,666.66 for leave not taken
  5. 5.Kshs. 250,000/- as severance pay
  6. 6.Kshs. 500,000/- as damages for violation of Article 41 rights
  7. 7.Costs of the suit to the Claimant
  8. 8.Interest at court rates on the sums in (i) to (vi) from the date of judgment till payment in full

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour disputes (Article 41 of the Constitution and the Employment Act invoked)

Relief refused

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Salary in lieu of notice (Kshs. 100,000/-)

Not included among the reliefs awarded in the disposition

Gratuity of Kshs. 250,000/-

Not included among the reliefs awarded in the disposition

Declaration that the settlement agreement dated 12th February 2024 is invalid and unenforceable

The court instead reversed the illegal rent deduction; no separate declaration of invalidity was granted

Damages for unfair labour practices as a separate head

Not separately awarded; the court awarded damages for violation of Article 41 rights instead

Costs

Costs of the suit awarded to the Claimant

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The Court finds that the termination of the Claimant was grossly unfair and exceedingly unlawful and awards the Claimant the following reliefs
p. 6Finding on unfair termination
In May 2023, Covid 19 was no longer considered a pandemic and WHO indicated as much. Termination of an employee in October 2023 on account of covid 19 is disingenuous.
p. 5Justification for redundancy
It was unconscionable for the Claimant to be subjected to an illegal contract after termination.
Post-termination settlement agreement
The demand for alleged rent arrears of Kshs. 930,000/- was illegal and reversed.
p. 5Rent arrears claim
Kshs. 1,200,000/- in 12 months’ salary as compensation for unlawful and unfair termination of employment;
p. 1Final orders - compensation
Interest at court rates on the sums in (i), (ii), (iii), (iv), (v) and (vi) above from the date of judgment till payment in full.
p. 6Final orders - interest

Issues in the judgment

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minor

The judgment's case number and neutral citation are not stated in the text provided

minor

The Respondent is recorded as asserting the Claimant was informed of redundancy 'through the letter dated 30th September 2020', which appears to be a typographical error for 2023 given the termination date of 30th September 2023

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, "Odhiambo v Prinias Enterprises Ltd t/a Prinias Hotel (Cause E031 of 2024) [2025] KEELRC 1774 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1774/eng@2025-06-19

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