Flamingo Horticulture (K) Ltd v Njoroge

3. The appellant maintained that the redundancy was due to operational requirements and that it had nothing to do with her pregnancy. It was its case that the redundancy was genuine, that it aected 265 employees and it strictly followed the “last in, rst out” criteria. It also claimed that it paid the respondent her terminal dues including severance, notice and leave pay and denied terminating the respondent on account of her pregnancy. Nevertheless, the appellant admitted a minor error in maternity leave payment, which it insisted was subsequently rectied. 4. The case was canvassed through adavit evidence, documents led and oral evidence. The crux of the respondent’s case was that she was not served with a proper notice, that she was not paid her dues, and that the appellant proceeded to hire new employees after she was terminated on grounds of redundancy. On its part, the appellant adduced evidence showing it served a redundancy notice dated 27th July 2016. It also provided payment schedules and disciplinary records and denied hiring replacements for the respondent. 5. The trial court ruled in favour of the respondent essentially nding that the appellant failed to provide a proper notice and that it did not adequately demonstrate the redundancy selection criteria. The trial court also held that terminating the respondent while on maternity leave without following due process amounted to discrimination and unfair labour practice. 6. The trial court decreed that the respondent was entitled to compensation for unpaid maternity leave, 10 months’ salary for unfair redundancy and general damages for discrimination. The trial court awarded the respondent: (a) one month’s unpaid maternity leave- Kshs.12,000/-; (b) Ten months’ salary as compensation for unfair redundancy- Kshs.120,000/- (c) General damages for discrimination on account of maternity leave- Kshs.1,000,000/- (d) costs of the suit and interests from the date of the judgment. 7. The appellant is now before this Court seeking to overturn the said verdict listing 10 grounds of appeal basically faulting the learned judge for: (a) nding the redundancy was unfair; (b) awarding double compensation for both unfair redundancy and discrimination, (c) failing to give due weight to the appellant’s defence; (d) nding that termination of employment on account of redundancy is prohibited during maternity period and as a consequence erred in awarding Kshs.120,000/- without any basis in law or in fact; (e) nding that the appellant had employed new employees after the redundancy, and, (f) failing to nd that the respondent accepted her terminal dues in full and nal settlement which should preclude her from further claims. It’s on these grounds that the appellant is beseeching this Court to set aside the said judgment, dismiss the respondent’s suit and award it costs of the proceedings before the trial court and this appeal. 8. The respondent led a notice of cross-appeal dated 30th November 2021 essentially faulting the learned judge for awarding Kshs.1,000,000/- as general damages for discrimination and urged this Court to set aside the said award and award general damages for discrimination on account of maternity leave in the sum of Kshs.3,000,000/-. 9. We heard this appeal virtually on 12th May 2026. Learned counsel Prof Mumma Senior Counsel appeared for the appellant. Learned counsel Ms Akinyi held brief for Mr. Mbaabu for the respondent. 10. In support of the appeal, Prof Mumma submitted that the redundancy was lawful, non-discriminatory, procedurally fair and that the trial judge‘s ndings and awards were erroneous and should be overturned. Regarding the question whether the respondent was issued with a notice before termination, Prof Mumma argued that Section 40 (1) (b) & (f) of the Employment Act requires employers to notify the employee personally (if the employee is not a member of a union) and to pay at least one month’s notice. He maintained that the respondent complied with these requirements and https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 2

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asserted that it is not disputed that the appellant notied the labour ocer of the redundancy exercise vide its letter dated 28th June 2016 appearing at page 49 of the record in conformity with Section 40 (1) (b) of the Act. Further, counsel faulted the learned judge for failing to appreciate that Section 40 (1) (b) of the Act does not prescribe the length of the notice that should be given to an employee nor does it prohibit the issuance of the notice in the same communication through which the employees are informed that he/she has been declared redundant. It was counsel’s submission that vide a letter dated 27th July 2016 in line with Section 40 (1) (b) and (f), the appellant notied the respondent of the redundancy, and in the said letter the appellant cited factors which had adversely aected it resulting in escalation of costs, hence, the need to deploy strategies to inter alia reduce costs, and, the need for some employees to be declared redundant with eect from 27th July 2016. In the same letter, the appellant oered to pay the respondent salary from 1st July 2016 to 27th July 2016, one month’s pay in lieu of notice, 21 days basic pay for every completed year of service, unutilized leave earned, one way travelling allowance and any overtime due. 11. It was counsel’s submission that the trial judge erred in nding a notice was required and proceeded to cite Kenya Airways Ltd vs. Aviation and Allied Workers Union, Kenya & 3 Others [2014] eKLR where unlike in this case, the employees were members of a trade union. Counsel submitted that under section 40 (1) (b), an employee who is not a member of a union should be informed personally in writing. Further, counsel maintained that since the respondent was paid one month’s salary in lieu of notice and was notied that her termination was on account of redundancy, the requirements of Section 40 (1) (b) and (f) of the Act were met. In support of the foregoing, Prof Mumma cited Mars Ison Technologies Kenya Lts vs. Muriel Ogoudjobi [2019] eKLR which claried that the notice requirements under Section 40 (1) (a) and (f) of the act are totally distinct and payment of one month’s salary in lieu of notice is sucient. 12. The appellant’s counsel also cited Africa Nazarene University vs. David Mutevu & 103 Others [2017] eKLR to underscore that for non-unionized employees, notice to the employee and payment in lieu of notice are sucient under Section 40 (1) (b) and (f). He also cited NEC Corporation vs. Samuel Gitau Njenga [2018] eKLR which armed that redundancy is a lawful ground for termination. 13. Regarding the alleged discrimination and or violation of constitutional rights, Prof Mumma cited GMC vs Bank of Africa Kenya Ltd [2013] eKLR which set out the test for establishing discrimination, which basically means aording dierent treatment to dierent persons attributable to wholly or mainly to their descriptions. The said decision also set out the burden of proof, namely, the need to establish the existence of discrimination through direct evidence. Counsel maintained that the respondent was not treated dierently on account of her pregnancy. Counsel recalled the appellant’s evidence that among the four ladies who were declared redundant, only the respondent was pregnant, hence, the allegation that she was terminated on account of her pregnancy lacks basis. Counsel faulted the learned judge for ignoring the appellant’s defence that the redundancy was impelled by operational requirements necessitated by uncontrollable cost factors. He stressed that the learned judge ignored the fact that the 265 employees who were laid o included male and female who were serving in various positions. 14. Regarding proof of reasons for termination within the meaning of Section 43 (2) of the Act, counsel submitted that these are matters that an employer at the time of termination genuinely believes to exist, and which caused the employer to terminate the services of the employee. He maintained that the termination on grounds of redundancy is a valid reason under Section 45 (2) (a) & (b) (ii) of the Act. 15. Citing Pandya Memoriak Hospital vs. Geeta Joshi [2020] eKLR, Prof Mumma maintained that the learned judge erred in awarding double compensation for the same breach that is, awarding both damages for discrimination and compensation for unfair termination. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 3

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16. Lastly, Prof Mumma faulted the learned judge for failing to nd that the respondent having executed a discharge, was barred by the doctrine of promissory estoppel from pursuing further claims. To buttress this point, counsel cited the High Court decision in Titus Muiruri Doge vs. Kenya Canners Ltd [1988] eKLR in support of the principle that an employee who accepts terminal dues in full and nal settlement may be estopped from making further claims. 17. Learned counsel for the respondent Ms Akinyi opposed the appeal. She adopted her written submissions dated 27th April 2026 which she highlighted briey. In a nutshell, counsel addressed four issues, namely; (a) whether the redundancy was lawful and fair, (b) whether the termination was discriminatory, (c) whether the trial court awarded double compensation, and (d) whether the crossappeal should be allowed. 18. Ms Akinyi submitted that the respondent claimed to have issued a notice to the Labour Oce but failed to notify the respondent personally. Counsel maintained that under Section 40 (1) (b), the appellant was required to notify both the Labour Ocer and the respondent with a notice. Counsel questioned the appellant’s argument that the termination letter dated 27th July 2018 was also the notice contemplated under the above provisions. 19. Answering the appellant’s contention that its inadvertent failure to issue a notice was mitigated under Section 40 (1) (f), the respondent’s counsel contended that the omission is irregular because Section 40 (1) contains seven grounds which must be present in order for redundancy to be lawful. In support of this assertion, counsel relied on Kenya Airways Limited vs. Aviation and allied Workers Union of Kenya and 3 others to urge that the appellant’s omission limited the employee’s chance to mitigate the eects of termination including nding a new job. Counsel also relied on this Court’s decision in The German School Society & Another vs. Ohany & Another (Civil Appeal No. 325 of 2018 [2023] eKLR to urge that consultation on an intended redundancy is implied by Section 40 (1) and Article 47 of the Constitution and Section 4 (3) of the Fair Administrative Action Act. 20. Further, counsel also relied on this Court’s decision in Thomas De La Rue (K) Ltd vs. Omutelema (Civil Appeal 65 of 2012) [2013] KECA 492 (KLR) (5 July 2013)) to urge that under Section 40 of the Act, notices are two-fold; rst to the trade union, if the employee is a member, two, to each individual being declared redundant. 21. Counsel questioned the criteria used in undertaking the redundancy, urging that under Section 40 (2) (c), regard should be had to seniority in time and skill, yet, in the appellant’s replying adavit, it was averred that it applied the “last in, rst out” criteria. Further, it was not demonstrated that the criteria was applied uniformly. Counsel cited Cargill Kenya Limited vs. Mwaka & Others [2021] eKLR to urge that an employer has the burden of proving the criteria used was objective, uniform and fair. To buttress this argument further, counsel relied on Kimathi vs. Eriscson Kenya Limited [2023] eKLR to argue that if one or more employees are to be selected for dismissal from a number of employees, the criteria for their selection must be fair and objective. 22. Regarding the award of 10 months compensation for unfair redundancy, counsel relied on German School Society & another vs. Ohany & Another (supra) and argued that the said award was merited. 23. Regarding the alleged discrimination, counsel maintained that the respondent was on maternity leave when she was unlawfully terminated, that the termination was linked to her pregnancy, which amounts to discrimination, and that evidence shows that no valid reason for her redundancy and her absence was exploited. Counsel argued that the discrimination claim is supported by relevant statutes and case law and relied on GNV vs. Bank of Africa Kenya Limited [2013] eKLR which held that there is no https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 4

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requirement for ladies who claim to have been discriminated based on pregnancy to strictly prove the allegations. 24. Regarding the compensation, counsel cited several decisions among them the ELRC decisions in Mbage vs. Hillcrest Limited [2023] eKLR and Wilson vs. Imarisha Mabati Limited [2023] eKLR and submitted that the trial court considered the violations of the respondent’s constitutional and statutory rights and awarded her damages accordingly. 25. Regarding the cross appeal, the respondent’s counsel urged this Court to award Kshs.3,000,0000/instead of the Kshs. 1,000,000/- awarded by the trial court. Counsel maintained that the trial court did not consider that the respondent lost her only means of income when she needed money and that she lost all her other benets including post-natal care. To support the above submission, counsel cited GBV vs. Bank of Africa Limited [2012], Tracy Wageci Mugambi vs. Windsor Golf Hotel and Country Club [2019] eKLR and Pandya Memorial Hospital vs. Geeta Joshi where the courts awarded damages of Kshs.3,000,000/-, Kshs.2,000,000/- and Kshs.3,000,000/- respectively. Counsel insisted that discrimination based on pregnancy is recognized as a violation that warrants a signicant award of damages. 26. We have considered the record of appeal and the respondent’s notice of cross appeal, the parties’ submissions and the law. This being a rst appeal, we are cognizant that our primary role is to reevaluate the evidence before the ELRC and draw our own conclusions. A rst appeal is a valuable right of the parties and unless restricted by law, the whole case is open for reconsideration both on questions of fact and law. The judgment of this Court must reect this Court’s conscious application of its mind to the entire record and ndings supported by reasons, on all the contentions put forth, and pressed by the parties for our decision. A rst appellate court has jurisdiction to reverse or arm the ndings of the trial court. However, while reversing a nding of fact this Court must come into close quarters with the reasoning assigned by the trial court and then assign our own reasons for arriving at a dierent nding, if at all. A rst appellate court is the nal court of fact ordinarily and therefore a litigant is entitled to a full, fair, and independent consideration of the evidence. However, we must bear in mind that we, unlike the trial court, did not have the benet of seeing the witnesses testify and observing their demeanor. Therefore, we must give due allowance to this fact. (See Kenya Ports Authority vs. Kuston (Kenya) Limited [2009] 2EA 212). 27. The germane issue in this case is whether the appellant served the respondent with a valid redundancy notice. As alluded at paragraph 11 above, Prof Mumma argued that Section 40 (1) (b) & (f) of the Act requires employers to notify the employee personally (if the employee is not a member of a union) and to pay at least one month’s notice. He maintained that the respondent complied with these requirements and vide its letter dated 28th June 2016 addressed to the Labour Ocer, the appellant communicated its intention to terminate its employees on account of redundancy. A month later, which is on 27th July 2016, the appellant wrote a letter to the respondent communicating that it had terminated her employment on account of redundancy. In the same letter, the appellant oered to pay the respondent salary from 1st July 2016 to 27th July 2016, one month’s pay in lieu of notice, 21 days basic pay for every completed year of service, unutilized leave earned, one way travelling allowance and any overtime due. 28. The issue at hand turns on whether under the law the letter dated 27th July 2016 addressed to the respondent was a valid notice of intention to undertake a redundancy. This Court has repeatedly ruled that non-unionized status does not exempt an employer from strict procedural compliance. The employer must issue the initial notice of intention to declare redundancy at least 30 days (one month) in advance of the nal termination date. Even though Section 40 (1) (b) does not explicitly specify the one- month duration as clearly as 40 (1) (a), a purposive statutory interpretation dictates that non- https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 5

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unionized employees are entitled to the same minimum one-month written notice. There is no rational legal basis to grant non-union workers shorter or less detailed notice. As decided cases cited below demonstrate, under Section 40 (1) (b) of the Act, an employer handling the redundancy of a nonunionised worker must issue a written notice directly to both the employee personally and the local Labour Ocer. 29. This Court in Ecobank Kenya Ltd vs. Ngina (Civil Appeal 4 of 2020) [2026] KECA 1128 (KLR) (12 June 2026) (Judgment), confronted with a situation where an employer executed an organizational restructuring in good faith and broadly informed sta via internal distribution e-mails ruled that non-unionized status does not exempt an employer from strict procedural compliance. General sta circulars, workplace town halls, or broad restructuring announcements cannot replace individual legal notices. From the above decision, it is clear that for non- unionized employees, the notice must be issued personally and in writing, explicitly informing the employees that their specic position is under threat, alongside the precise reasons for and the extent of the intended redundancy. 30. This Court in German School Society & Another vs. Helga Ohany & Another [2023] KECA 894 focused on the interplay between statutory notice and fair process. The Court emphasized that the written notice required under Section 40 (1) (b) is the legal "doorway" to the redundancy process. Without a formal individual notice, meaningful consultation cannot occur. The Court was emphatic that because consultation is implicit in fair labor practices, failing to issue individual notices to nonunion sta reduces the process to a cosmetic charade, rendering the termination unlawful. 31. In Barclays Bank of Kenya Ltd vs. Gladys Muthoni & 20 Others [2018] KECA 718, this Court rejected an employer's defense that a standard termination letter or a summary handshake package could be substitute for an "intended redundancy notice." The Court claried that there are two separate notices required under Kenyan law. First, is the Notice of Intended Redundancy (issued to the employee and local labor ocer a month prior), and second, is the Notice of Termination (or pay in lieu under Section 40 (1) (f)). The Court was unequivocal that skipping the rst notice for non-unionized sta voids the entire exit process. 32. Closely tied to the appellant’s omission to issue the respondent with a notice to communicate its intention to terminate her services is the absence of consultations, a critical requirement before redundancy is undertaken. Mandatory consultations before redundancy prevent unfair dismissal claims and ensure operational fairness. Undertaking a meaningful consultation process is not a mere bureaucratic formality, but a core component of a valid restructuring strategy. A redundancy is automatically deemed an unfair dismissal if consultation is bypassed or treated as a "tick-box" exercise. If challenged in court, the employer must prove that they actively listened to employees and genuinely considered alternative solutions before making the nal decision. (See German School Society & Another vs. Helga Ohany & Another (supra). 33. As was held by this Court in German School Society & Another vs. Helga Ohany & Another (supra), termination via redundancy without prior consultation is substantively and procedurally unfair, violating Section 40 of the Employment Act and Article 47 of the Constitution. This decision established that a redundancy notice must initiate a consultative process rather than acting as a nal termination, solidifying mandatory employee consultation requirements. In this case, the letter dated 27th July 2018 was a nal termination. Even where an employee is not a member of a union, consultation before redundancy is a requirement. In the above cited case, this Court was categorical that: “ 56. A notice to the employee/ trade union/ labour ocer opens up the door for a consultative process with the key stakeholders. The Court of Appeal in Kenya https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 6

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Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] e KLR held:- 57. a. Consultation is implicit in the Employment Act under the principle of fair play; b. Consultation gives an opportunity for other avenues to be considered to avert or to minimize the adverse eects of terminations; c. Consultations are meant for the parties to put their heads together and is imperative under Kenyan law; d. Consultations have to be a reality not a charade; e. Opportunity must be given for the stakeholders to consider; f. Stakeholders must have and keep an open mind to listen to suggestions, consider them properly and then only then decide what is to be done; and g. Consultation must not be cosmetic. In essence, consultation is an essential part of the redundancy process and ensures that there is substantive fairness. The employer should ensure that it carries out the process as fair as possible and that all mitigating factors are taken into consideration. A reading of the record shows that the respondent was served with a redundancy notice and asked to proceed for a one month’s leave. The trial court found that the redundancy was unfair and irregular for failure to give adequate notice and thereby not giving consultation a chance. … 61. 34. Having regard to the legislative intention of the provisions of section 40 of the Employment Act, the international law and decided cases, we nd that consultation on an intended redundancy between the employer and employee is implied by section 40 (1) (a) and (b) of the Employment Act. Moreover, consultation is also now specically required by Article 47 of the Constitution and the Fair Administrative Action Act. Article 47 and section 4(3) of the Fair Administrative Action Act provide that where an administrative action is likely to adversely aect the rights or fundamental freedoms of any person, the administrator shall give notice to the person aected by the decision. (See. Cargill Kenya Limited v Mwaka & 3 others, para 35 -37). In Africa Nazarene University vs. David Mutevu & 103 Others [2017] KECA 381 (KLR), this Court dierently constituted addressed the types of notices under section 40 (a) and (b) of the Act. It stated: “ This Court, dierently constituted, in the matter of Thomas De La Rue (K) Ltd vs David Opondo Omutelema [2013] eKLR had occasion to consider the construction of subsections (a) and (b) to the eect that both required dierent kinds of notices. It stated as follows: “ It is quite clear to us that sections 40 (a) and 40 (b) provide for two dierent kinds of redundancy notications depending on whether the employee is or is https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 7

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not a member of a trade union. Where the employee is a member of a union, the notication is to the union and the local labour ocer at least one month before the eective redundancy date. Where the employee is not a member of the union, the notication must be in writing and to the employee and the local labour ocer. Section 40 (b) does not stipulate the notice period as is the case in 40 (a), but in our view, a purposive reading and interpretation of the statute would mean the same notice period is required in both situations. We do not see any rational reason why the employee who is not a member of a union should be entitled to a shorter notice." We agree with that construction as well as the observation that subsection (b) says nothing about the length of the notice or the contents. In our view, however, the only dierence in both sub-sections is whether an employee is a member of a trade union or not. A proper construction of both subsections would show that the phrase: “ ...the reasons for, and the extent of, the intended redundancy not less than a month prior to the date of the intended date of termination on account of redundancy…" is common to both kinds of employees. So that, whether an employee belongs to a trade union or not, the reasons and period of notice should be spelt out.” (Emphasis added) 35. It is manifestly evident that the appellant never served the respondent with a 30 days’ notice on redundancy. However, the appellant argues that this omission was cured by payment of a one month’s salary in lieu of notice. Did the decision to pay one month’s pay in lieu of notice cure this omission? We do not think so. Under the law, failure to issue a redundancy notice cannot be cured by payment of a one month’s salary in lieu of notice. The initial statutory notice of an intended redundancy serves a completely dierent, non-monetary purpose than the contractual notice required to terminate a standard employment relationship. (See Kamau vs. Copycat Limited [2025] KEELRC 2330 (KLR)). The law treats redundancy as a highly protected process that demands a strict two-stage notication timeline. (a) Notice of Intended Redundancy (At least 30 days prior). The statutory authority for this is Section 40(1) (a) & (b) of the Act , and, (b) This notice is issued to the employee (or union) and the local Labour Ocer. Its purpose is to initiate consultations, explore cost-cutting alternatives, and give the employee psychological preparation. It cannot be paid o. This Court in Ecobank Kenya Ltd vs. Ngina (supra), ruled that a genuine, substantively justied restructuring exercise is rendered procedurally unfair from the outset if personalized statutory notices are skipped or backdated. Skipping the Labour Ocer's notice or the notice to the employee is an "independent defect,” not a curable technicality. 36. Comparable jurisprudence on this issue is illuminating. In South African labor law, a failure to give statutory redundancy notice to an employee cannot be cured by a one-month payment in lieu of notice if the employer completely skipped the mandatory consultation process. South African courts draw a strict legal distinction between termination notice (which can often be paid out under the Basic Conditions of Employment Act (BCEA)) and the Section 189 (3) consultation notice required under the Labour Relations Act (LRA). South African courts have consistently held that paying an employee out does not excuse or "cure" a total failure to consult, and the dismissal will remain procedurally unfair. 37. South African Labour Courts emphasize that an employer cannot issue a combined letter that serves as both a Section 189 (3) notication of contemplated retrenchment and an immediate termination letter. (See National Union of Metalworkers of South Africa (NUMSA) and Others vs. Kaefer Energy Projects (Pty) Limited (JS567/2018) [2021] ZALCJHB 280; (2022) 43 ILJ 181 (LC) (7 September 2021)). South African Labour Courts emphasize that Section 189 (3) notice invites employees to https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 8

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a joint consensus-seeking process before a nal decision is made. In the above case, the court was categorical that simply handing an employee a letter saying their position is redundant and oering one month’s notice pay without a prior, genuine consultation process is a fatal procedural error. The nancial payment covers contractual or statutory exit notice, but it cannot retroactively validate an unprocedural dismissal. 38. In Heather vs. Hough ZALC 113 (17 November 1998) 1998), the Labour Court evaluated a scenario where a labor consultant advised an employer to inform a manager that her position was redundant and grant her "a month's pay in lieu of notice" along with standard severance. The Court conrmed that bypassing the statutory requirements of Section 189 and executing a sudden dismissal, even when padded with notice pay amounts to a severe procedural infraction. Financial compensation at the point of termination does not absolve the employer from the legal obligation to engage in an interactive process to minimize or avert retrenchments. 39. In this case, the only communication to the respondent is the letter dated 27th July 2016 communicating the decision to terminate her employment on account of redundancy. There was no prior 30 days’ notice to the employee as highlighted in the above cited decisions. There was no room for consultations. While the text of Section 40 does not explicitly outline a step-by- step consultation framework, Kenyan courts have established that meaningful consultation is a mandatory constitutional right before a nal redundancy decision is made. (See German School Society & Another vs. Helga Ohany & Another (supra). 40. We entirely agree with this Court’s ndings in the above decision that termination of employment through redundancy is also subject to the substantive justication envisaged by Sections 43 and 45 of the Act which provides for proof of reasons for termination and for unfair termination respectively. In order for termination to be fair in the eyes of the law it has to be both substantively and procedurally fair. The employer needs to have a valid and fair reason for termination. Apart from a valid reason of termination, the employer must follow fair procedures for termination in accordance with the Act. In any form of termination, the employer is required to prove the reasons for the termination otherwise it will be termed as unfair. It is apparent from the record that no evidence was presented before the trial judge regarding any consultations undertaken prior to the redundancy. We nd that the termination was procedurally unfair for want of a valid notice to the respondent stipulating the intention to undertake the redundancy process and also for lack of consultations envisaged under Section 40 of the Act. (See German School Society & Another vs. Helga Ohany & Another [2023] KECA 894). The omission to issue the notice to the respondent and the absence of the consultations rendered the purported redundancy null and void for all purposes. Accordingly, we nd no reason to fault the trial court’s nding that the respondent’s termination was procedurally unfair. 41. The other important point to underscore is that the law demands that the selection of redundant workers must be fair. The employer must have due regard to seniority in time (Last In, First Out LIFO), as well as the skill, merit, and ability of each employee. Courts require employers to grant aected individuals an opportunity to be heard on the selection criteria matrix before the nal decision is made. Even though, the appellant maintains it followed LIFO, the evidence in support of this assertion was thin. We say no more. 42. The appellant argues that the respondent signed a discharge voucher, therefore, she is estopped from raising further claims. This argument is attractive. However, that is how far it goes. An employee is not automatically prohibited from claiming damages or compensation for an unprocedural termination simply because they signed a discharge voucher. This Court in Thomas De La Rue (K) Ltd vs. David Opondo Omutelema [supra] established that a discharge voucher per se cannot absolve an employer from statutory obligations. An employer cannot use a contract such as a "full and nal settlement" https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 9

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voucher to bypass mandatory procedural requirements set out in Section 41 (disciplinary hearings) or Section 40 (redundancy consultations) of the Act. 43. The appellant is urging that the trial court erred in awarding double compensation for the same breach that is, awarding both damages for discrimination and compensation for unfair termination. Double compensation occurs when an employee is awarded separate nancial remedies for the exact same underlying wrongful act or loss under dierent legal statutory frameworks, resulting in a duplication of relief. The courts strictly prohibit this practice to prevent unjust enrichment and to ensure that compensation remains just, equitable, and within statutory limits. (See the South African Labour Court of Appeal Decision in ARB Electrical Wholesalers (PTY) LTD vs. Hibbert (DA3/13) [2015] ZALAC 91 (21 August 2015). 44. Ordinary, unfair dismissal and compensation/damages for dismissal on discriminatory grounds are treated as two fundamentally distinct legal concepts. Courts have carefully delineated how these two heads interact to avoid the trap of punitive "double recovery" while validating their separate identities. The Labour Appeal Court of South Africa (LAC) Member of the Executive Council for the Department of Health, Eastern Cape vs. Odendaal [2009] claried that while a single act of dismissal takes place, it breaches two separate statutory obligations. An employee can claim compensation for the unfair dismissal under the LRA and claim damages for the indignity/discrimination under the Employment Equity Act (EEA). 45. In South African Airways (Pty) Ltd vs. V and Another (CA9/13, C420/2006) [2014] ZALAC 27, the Labour Appeals Court armed that the calculation for Labour Relations Act compensation looks at the fairness of the termination, while EEA damages look closely at the reprehensibility of the employer’s discriminatory conduct and the actual nancial or emotional losses suered by the victim. 46. The ELRC in Eshiwani vs. YMR Lounge [2024] – KEELRC similarly ruled that standard unfair termination compensation (capped at 12 months) is distinct from general damages awarded for constitutional violations and workplace discrimination. From the above jurisprudence, it is clear that the appellant’s argument citing double compensation is unsustainable. The respondent was awarded Kshs.1,000,000/- for discrimination and Kshs. 120,000/- being 10 months’ pay for unfair redundancy. These are two distinct heads of damages. 47. The other issue urged by the appellant is that the trial court erred in nding that the respondent was discriminated against because she was pregnant and that she was dismissed while on maternity leave. To succeed in a claim that an employee was dismissed from employment on account of discrimination, the employee carries the initial evidential burden. Under the Employment Act, (Section 5 and Article 27 of the Constitution), a claimant must prove specic legal elements to establish a prima facie case before the burden shifts to the employer. 48. First, the employee must establish that an actual termination of employment took place. The fact of dismissal in this case is not in question. Therefore, we shall not belabour discussing it. Second, the employee must demonstrate that he/she belongs to a category protected from discrimination. For example, proving the dismissal was based on race, colour, sex, language, religion, political or other opinion, nationality, ethnic or social origin, disability, pregnancy, mental status, or HIV status. Third, proving any other arbitrary ground that impairs human dignity or impacts employment opportunities unfairly. The respondent claimed that she was discriminated against because she was pregnant and that she was terminated while she was on maternity leave. Pregnancy is one of the grounds listed under Section 5 of the Act. 49. Next is the most critical element. The employee must show a direct link between their protected category and the decision to terminate them. The law bans discriminatory practices across all stages and https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 10

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elements of an employment relationship. This includes during recruitment, training and promotion, terms and conditions of service and termination of employment. 50. The employee must show a direct link between their protected characteristic and the decision to terminate them. This is the most critical element. The employee must prove that "but for" their pregnancy, medical status, tribe, or religion, the dismissal would not have occurred. The employee must also prove proximity of time, which requires demonstrating that the termination closely followed after the employer discovered the protected status (e.g. getting red immediately after submitting a pregnancy notication or an HIV test result). 51. The employee must demonstrate dierential treatment. Under this requirement, the employee must show that they were treated less favourably than other employees in identical or substantially similar circumstances who do not share that protected characteristic. The respondent maintained that she was targeted on account of her pregnancy and alleged that after her termination on account of redundancy, the appellant proceeded to recruit new sta, an allegation the appellant disputed. 52. Importantly, once the employee successfully presents evidence supporting these four elements, a prima facie case of discrimination is established. The burden of proof then shifts completely to the employer under Section 43 of the Act. To escape liability, the employer must prove that: (a) the dismissal was rational, fair, and based on an inherent requirement of the job; (b) the dismissal was genuinely motivated by misconduct, poor performance, or operational requirements (redundancy), completely independent of the employee's protected status. The employer must prove that the termination was completely independent of any protected ground listed earlier. Under Section 5 (7) and Section 43 of the Employment Act, 2007, the employer must demonstrate that the termination was substantively justied by a valid, non-discriminatory reason, such as genuine operational requirements (redundancy), proven gross misconduct, or persistent poor performance. (See this Court’s decision in NEC Corporation vs. Samuel Gitau Njenga [2018] KECA 840 (KLR)). 53. In Olero vs. Roche Kenya Limited (Cause 427 of 2019) [2026] KEELRC 279, the employee claimed that his selection for redundancy was racially and nationally discriminatory, alleging that the company favoured expatriates over Kenyan nationals regarding training, promotion, and retention. The employer demonstrated that the redundancy process fully complied with Section 40 of the Act. They proved that training was role-based rather than individual-based, and that expatriate remuneration was governed strictly by a standardized international assignment policy rather than bias. The ELRC dismissed the discrimination claim. The court ruled that if an employer provides objective evidence of business stagnation or restructuring and applies transparent, performance-based selection criteria, the termination cannot be labeled discriminatory. 54. In this case, the appellant failed to issue a redundancy notice. There was no consultation as earlier stated. The entire process was procedurally unfair. Pregnancy is one of the protected grounds under the law. At paragraph 84 of the impugned judgment, the trial judge cited Article 8 of The ILO Maternity Protection Convention (C183) which prohibits the dismissal of women during pregnancy, maternity leave, or upon return, while guaranteeing a right to the same position or equivalent. It also places the burden of proof regarding termination on the employer. 55. When a redundancy (retrenchment) is challenged as being a cover for discrimination, the case transitions into the territory of an automatically unfair dismissal. The legal threshold for determining whether a redundancy was genuine or discriminatory relies on a shifting burden of proof. To successfully defend against a claim of discrimination, the employer must satisfy a specic evidentiary and causal threshold. The employer must prove that the dominant, proximate, or true reason for https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 11

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the dismissal was purely nancial, structural, or technological (operational requirements), completely divorced from any discriminatory factor. 56. The Constitutional Court of South Africa and the Labour Appeal Court of South Africa utilize a two-tier causation test to evaluate whether the threshold has been met. (See Paul vs. Shree Pretoria Hindu Seva Samaj (JS490/23) [2026] ZALCJHB 124 (28 April 2026)). The two tests are: (a) Factual Causation ("But- For" Test): Would the redundancy have occurred but for the employee's race, age, pregnancy, or other protected characteristic? If the answer is no, discrimination is factually present. (b) Legal Causation (The Dominant Reason): If multiple factors exist, the court asks: What was the most proximate or dominant cause of the dismissal? The employer satises the legal threshold only if they prove that operational necessity was the dominant cause of the termination, even if a protected attribute existed in the background. 57. To prove to a court that a redundancy was strictly objective and non-discriminatory, an employer must clear three stringent compliance bars: (a) A Veriable Economic or Structural Rationale. The employer cannot merely declare nancial hardship; they must produce objective, commercial evidence. (b) Objective and Non-Discriminatory Selection Criteria. If specic individuals were chosen for redundancy, the employer must prove that the selection criteria applied were objective, uniform, and fair. (c) Valid Criteria: The Last In, First Out (LIFO) principle, or skills-retention assessments based on veried performance metrics. (d) Failed Thresholds: If an employer uses subjective criteria that disproportionately ags older employees or a specic demographic, the threshold is failed, and discrimination will be inferred. As highlighted earlier, the employer must engage in a meaningful, joint consensus-seeking process with the aected employees or their union. The required evidence includes proof that the employer genuinely considered alternatives to dismissal (such as horizontal bumping, salary cuts, or early retirement packages). Failing to consult thoroughly creates an inference that the operational rationale is merely a pretext. 58. We have carefully considered the reasons oered by the appellant in answer to the accusation that the termination was discriminatory and the reasons for termination including the manner in which the redundancy was undertaken. We are not satised that the evidence tendered satised the tests set out in paragraph 57 above. The explanation oered was thin and, in a way, guarded. It does not demonstrate that the redundancy was strictly objective and non-discriminatory. Accordingly, we nd no basis to disturb the trial courts nding that the termination was discriminatory. 59. There was no suggestion that the awards by the trial court are manifestly excessive to warrant interference by this Court. There was no suggestion that the trial court in arriving at the said awards took into account irrelevant considerations or failed to consider relevant considerations. Similarly, regarding the notice of counter claim, we nd no basis at all for us to enhance the amount awarded by the trial court. 60. The upshot of the above is that both the appeal and the notice of cross appeal are devoid of merit and are hereby dismissed. Since both parties have failed in their respective claims, each party shall bear its own costs. For avoidance of doubt, we hereby arm the trial court’s ndings. DATED AND DELIVERED AT NAKURU THIS 25TH DAY OF SEPTEMBER, 2026. J. MATIVO ................................ JUDGE OF APPEAL MURUNGI B. KAIRARIA https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 12

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................................ JUDGE OF APPEAL AHMED ISSACK ................................ JUDGE OF APPEAL I conrm that this is a true copy of the original Signed. DEPUTY REGISTRAR. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1791/eng@2026-09-25 13

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