Nzwili v Zheng Hong Limited (Appeal E105 of 2024) [2025] KEELRC 2451 (KLR)
The bottom line
#Kenya's Employment Court ruled that a mass termination blamed on a KRA shutdown was actually a redundancy, making it unfair and entitling the worker to notice, severance and compensation.
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 trial court erred in finding that the respondent had valid reasons for terminating the appellant's employment
- 2.Whether the termination, being a redundancy, complied with section 40 of the Employment Act
- 3.Whether the appellant was entitled to the reliefs sought, including 12 months' salary as compensation, public holidays pay and leave
Key legal issues
#Whether the reason for termination was valid and the termination lawful
The stated reason (KRA shutdown of the respondent's operations) was not substantiated; the termination amounted to redundancy, requiring compliance with section 40 of the Employment Act
The reason given for termination was that KRA had shut down the respondent's operations, but no reasons for the shutdown were provided. KRA only shuts down businesses for breach of tax law, in which case the respondent brought it upon itself. Since more than 100 employees were terminated, the separation was not disciplinary but a redundancy, and the section 40 procedure had to be followed.
Whether the procedure for redundancy was followed
No evidence was adduced of compliance with section 40; the termination was therefore unfair under section 45
Section 40 of the Employment Act prescribes the procedure for redundancy, including notice and severance. The court found no evidence that this procedure was followed. Consequently, the termination was substantively and procedurally unfair, and the appellant was entitled to notice pay, severance pay and compensation.
Principles for a first appellate court reviewing a trial court's judgment
The court is entitled to re-evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses
Relying on Gitobu Imanyara & 2 others v Attorney General, the court restated that an appeal is by way of retrial: the appellate court must reconsider the evidence, evaluate it itself and draw its own conclusions, bearing in mind that it did not see or hear the witnesses.
Legal principles established
#- Where termination of employment arises from closure of operations by KRA rather than employee fault, it amounts to redundancy and section 40 of the Employment Act must be followed
- Termination effected without following the redundancy procedure in section 40 is unfair under section 45 of the Employment Act
Court orders
#- 1.One month's notice in lieu of pay of Kshs. 19,000/-
- 2.Severance pay at 15 days' salary for each complete year of service (4 years) of Kshs. 38,000
- 3.Four months' salary as compensation for unfair termination of Kshs. 76,000/- (total Kshs. 133,000)
- 4.Costs of the appeal awarded to the appellant
- 5.Claims for public holidays pay and leave refused
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Milimani Chief Magistrate's Court
- not_stated
- Jurisdiction invoked
- First appeal from the trial magistrate's court (Employment and Labour Relations Court, Appeals Division)
Relief refused
#Public holidays pay
No evidence of work done during public holidays
Leave pay
No evidence that leave was applied for and refused
12 months' salary as compensation
General worker with approximately 4 years' service; 4 months' salary held justifiable
Costs
The appellant shall have costs of the appeal
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.
The Court therefore finds and holds that the termination was a redundancy section 40 of the Act ought to have been followed. The termination was therefore unfair under section 45 of the Act and allows the appeal
this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowances in this respect
One month’s notice in lieu of pay. Kshs. 19,000/-
The appellant shall have costs of the appeal
Issues in the judgment
#The appeal is described as from the Judgment of Hon. Becky Cheloti Mulema (CM) at Milimani, yet the court applies first-appeal principles referring to an appeal 'from a trial by the High Court' in the quoted authority; the passage is quoted as guidance rather than describing the appeal below
Submissions by the respondent were not on file, and the appeal was determined without them
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nzwili v Zheng Hong Limited (Appeal E105 of 2024) [2025] KEELRC 2451 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 12th March, 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2451/eng@2025-09-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.