https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2354

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT ELDORET** **ELRC CAUSE NO. E040 OF 2025** *(Before Hon. Lady Justice Maureen Onyango)* **KENYA UNION OF DOMESTIC, HOTELS, EDUCATIONAL INSTITUTIONS, HOSPITALS AND ALLIED WORKERS(KUDHEIHA)………………………………………. CLAIMANT** **VERSUS** **MOI UNIVERSITY …………….……………………...…… RESPONDENT** **JUDGMENT** **Introduction** 1. The Claimant is a trade union duly registered under the Labour Relations Act. 2. The Respondent is a body corporate established under the Moi University Charter, 2013, some of whose employees are members of the Claimant. 3. the Claimant and the Respondent have a recognition agreement and have a valid and subsisting collective bargaining agreement. 4. By a Memorandum of Claim dated 1st July 2025 and subsequently amended on 1st March 2026, the Claimant instituted the present suit seeking the following orders, which I reproduce verbatim: 5. The redundancy by Moi University be declared unlawful. 6. The redundancy by Moi University be declared as an unfair Labour practice. 7. That any employee, being a member thereof affected by the redundancy by Moi University and is laid-off be reinstated to his/her job position. 8. That no employee is to be victimized in any manner by the Respondent as a result of this suit. 9. Cost of this suit. 10. Interests on 5 above at Court rates. 11. Any other or further relief that this Honourable Court may deem just and fit to award in the circumstances. 12. In the alternative, an order directing the Respondent to pay each affected employee the maximum compensation equivalent to 12 months’ salary. ***The Claimant’s case*** 1. It is the Claimant’s case that, through letters dated 13th and 20th May 2025, the Respondent declared the listed union members redundant without justification and in contravention of the law. 2. The Claimant avers that the work performed and services rendered by the affected union members had not become superfluous. 3. The Claimant maintains that the Respondent declared the employees redundant without following the procedure prescribed by law and established practice. 4. It is further contended that, as at 9th May 2025, the positions held by the affected employees had been re-advertised. 5. The Claimant asserts that the Respondent’s actions were wrongful and unjustified, particularly because the affected members had undergone annual performance appraisals throughout their respective terms of employment and none had been found incompetent. 6. The Claimant further maintains that the productivity of the affected employees had neither been found wanting nor demonstrated to be below average in any respect. It is therefore the Claimant’s case that the Respondent’s actions were unlawful and devoid of justification. **The Respondent’s case** 1. The Respondent filed a Response to the Amended Memorandum of Claim dated 4th May 2026, denying the Claimant’s assertion that it had acted unlawfully or unfairly in declaring its employees redundant. 2. The Respondent averred that it initiated the redundancy and rightsizing process in 2019, when it notified its employees of the intention to carry out redundancies. According to the Respondent, the process was necessitated by its inability to meet its financial obligations owing to the sustained growth of its wage bill against a corresponding decline in its revenue streams. 3. The Respondent asserted that while exploring alternatives to redundancy with a view to cushioning the employees likely to be affected, it retained them for as long as reasonably possible. However, when its financial position failed to improve, it issued a further notice of its intention to carry on with the redundancies by its letter dated 2nd April 2025. It maintained that the institution risked closure, unless it reduced its wage bill by laying off some members of staff. 4. The Respondent stated that, in implementing the involuntary rightsizing exercise, it notified the Claimant of its intention to declare some of the Claimant’s members redundant by letter dated 2nd April 2025. 5. The Respondent contended that before carrying out the redundancies it procured the services PKF, an independent internationally recognised consultant, and the redundancy was based on the recommendation of the consultant which had established that the institution’s wage bill was disproportionately high relative to its income. The Respondent further stated that the recommendation was informed by the continued decline in its income arising from a significant reduction in student enrolment and diminished financial support from the Government. 6. The Respondent averred that, through letters of notice dated 13th May 2025, it notified the Claimant’s members affected by the redundancy that their employment would terminate on 13th June 2025, thereby giving them approximately one month’s notice. 7. It is the Respondent’s assertion that the affected employees did not approach the Court during the one-month notice period, which it considered an indication that they were satisfied with the process. It further stated that the affected employees left the institution in accordance with the terms of their respective letters and surrendered the institution’s property in their possession, thereby submitting themselves to the redundancy process. 8. The Respondent denied re-advertising the positions held by the affected employees and maintained that the allegation was misleading since the institution was already burdened by an unsustainable wage bill and could not afford to incur additional and unwarranted expenditure by recruiting new employees. 9. The Respondent contended that the redundancy process was necessary and inevitable, having been occasioned by the financial difficulties the institution was facing and was therefore justified and lawful. 10. The Respondent denied violating any substantive or procedural law and averred that it had complied with all the applicable legal requirements, having served the Claimant with a notice dated 2nd April 2025 communicating its intention to declare redundancies and subsequently notified it, through a letter dated 13th May 2025, of the declaration of redundancy. 11. In addition, the Respondent averred that it explained the reasons for the redundancy to the Claimant and the affected employees during consultative meetings held between the parties. 12. The Respondent further averred that it involved the Claimant throughout the redundancy process and afforded it a meaningful opportunity to participate in consultations. It maintained that, in its letter dated 2nd April 2025, it expressed its intention to consult the affected employees and the Claimant’s representatives with a view to exploring possible alternatives and mitigating the effects of the proposed redundancy. 13. In this regard, the Respondent averred that, through its letter dated 9th April 2025, it invited the Claimant to attend a consultative meeting scheduled for 24th April 2025. A meeting was subsequently held and attended by the Claimant’s representatives, during which the parties presented and exchanged their respective views. The Respondent maintained that, in its letter dated 13th May 2025 declaring the redundancies, it acknowledged the formal consultations held with the Claimant and incorporated the matters arising therefrom into its final decision. 14. Regarding the criteria used to identify the affected employees, the Respondent averred that it relied on PKF to develop an objective methodology for implementing the redundancy. According to the Respondent, in developing the selection criteria, PKF considered the information supplied by the Respondent, its financial diagnostics and prevailing financial position, financial analysis, staff-attributable costs and staff demographics. It stated that the methodology adopted was centered on a standard-score analysis intended to classify the results objectively. The Respondent further stated that during the meeting held on 23rd April 2025, it demonstrated to the Claimant how the tool operated. 15. Regarding the requirement to issue notice before the effective date of redundancy, the Respondent maintained that the declaration of redundancy was communicated on 13th May 2025, thereby commencing the requisite notice period. It further averred that, during the meeting held on 23rd April 2025, the Claimant was informed that the redundancy process was intended to be concluded by 30th June 2025. That date coincided with the transition to the new financial year and the Government’s budgetary process, upon which the Respondent largely depended for funding. 16. With regard to the payment of terminal benefits, the Respondent averred that from the commencement of the process, its letter dated 2nd April 2025 and the subsequent letter dated 13th May 2025 expressly indicated that the affected members of the Claimant would be entitled to severance pay, salary in lieu of notice, payment for accrued but untaken leave and any other benefits due to them. 17. According to the Respondent, during the meeting held on 23rd April 2025, it acknowledged its obligation to settle the employees’ terminal dues and had arrived at a preliminary estimate of approximately Kshs. 6.7 billion as the amount required to meet those obligations, and that it was working towards securing the necessary funds. 18. The Respondent thus maintained that it had complied with all the procedural requirements governing a declaration of redundancy. 19. The Respondent further averred that it placed the Claimant at the center of the rightsizing exercise and had notified the Claimant of the intended redundancy and rightsizing exercise as early as July 2022. That the Claimant had been afforded an opportunity to participate in and enrich the process through its contributions during consultative meetings. That the Claimant was further invited to provide an alternative scientific selection tool that would address its concerns regarding the methodology developed by PKF and minimise the adverse effects of the redundancy process. 20. The Respondent maintained that the redundancy process was involuntary, objective and necessitated by the need to align its staffing levels with its prevailing institutional requirements and financial realities. 21. With regard to the prayer for reinstatement, the Respondent contended that the remedy was legally impracticable because the affected employees were no longer part of the institution’s workforce and the reduced staffing levels had already been taken into account in the allocation of the institution’s resources. 22. On the prayer for compensation, the Respondent maintained that the affected union members were not entitled to the same because it had set aside their redundancy packages and conducted the redundancy process in accordance with the law. 23. The suit was disposed of by way of written submissions, which were duly filed by the parties. **The Claimant’s Submissions** 1. In its submissions dated 18th June 2026, the Claimant submitted that the Respondent failed to comply with clause 10 of the Collective Bargaining Agreement signed on 14th August 2023, which was binding upon the parties and governed the redundancy process. 2. The Claimant further submitted that the conditions necessary to constitute a genuine redundancy did not exist in the present case. It contended that the services rendered by the 438 affected employees had not become superfluous and that the positions they previously held had been re-advertised as at 9th May 2025, as demonstrated by the documents filed with the Amended Memorandum of Claim. 3. Relying on the definition of redundancy in section 2 of the Employment Act, the Claimant submitted that the services rendered by the 438 affected employees had not become superfluous and that the circumstances of the Respondent did not involve the abolition of any office, job or occupation within the meaning of that provision. 4. In support of that position, the Claimant relied on the English decision in ***Chapman v Goonvean and Rostowrack China Clay Limited [1973] 2 All ER***, in which Lord Denning held that there is no redundancy where the requirements of the business for the affected employees’ services continue in the same manner as before. 5. The Claimant submitted that the Respondent declared the 438 employees redundant without complying with the procedure prescribed by law and the applicable CBA signed on 14th August 2023. 6. In particular, the Claimant faulted the Respondent’s failure to apply the last in first out principle prescribed under clause 10(b) of the CBA. It maintained that the Respondent did not objectively evaluate employees within the affected grades on the basis of seniority, skill, merit, ability and reliability. 7. The Claimant further submitted that the Respondent’s actions were unjustified because its members had undergone annual performance appraisals throughout their employment and none had been found incompetent. 8. It further submitted that section 40(1)(c) of the Employment Act required the Respondent to consider the statutory factors when developing and applying the criteria for evaluating and selecting the employees to be declared redundant. According to the Claimant, the Respondent did not comply with that requirement. 9. Regarding the applicable selection parameters, the Claimant submitted that section 40(1)(c) of the Employment Act required the Respondent to consider seniority in time, as well as the skill, ability and reliability of each employee within the particular class of employees affected by the redundancy. 10. The Claimant maintained that the employees’ knowledge, skills and responsibilities ought to have been assessed by reference to their work experience and qualifications within the same job clusters. 11. The Claimant submitted that the Respondent did not produce records of the performance appraisals undertaken during the affected employees’ respective periods of service. That in the absence of such records, the Court could not ascertain whether the affected members had been evaluated against the stated selection criteria. 12. The Claimant further submitted that, under the CBA and sections 40(1)(a) and (b) of the Employment Act, the purpose of issuing a redundancy notice was to afford the parties an opportunity to consider measures to avert or minimise the proposed terminations and mitigate their adverse effects on the affected employees. It contended that the Respondent did not afford the parties such an opportunity. 13. The Claimant denied that any meaningful consultation took place between the Respondent, the union and the affected employees. It submitted that such consultation would have enabled the parties to discuss and negotiate alternatives to redundancy or, if the redundancies were unavoidable, measures to minimise their adverse consequences. According to the Claimant, genuine consultation would have enabled the parties to arrive at a mutually acceptable solution and potentially avert the institution of the present proceedings. 14. In addition, the Claimant relied on Article 13 of ILO Recommendation No. 166, which requires consultation between an employer and the affected employees or their representatives before employment is terminated on account of redundancy. The Claimant contended that the Respondent failed to comply with that requirement. 15. Consequently, the Claimant submitted that the redundancy process was substantively unfair and failed to take into account the applicable legal requirements and mitigating factors. 16. The Claimant therefore urged the Court to find that the redundancy process and the resulting termination of its members’ employment were procedurally and substantively unfair, irregular and unlawful. 17. On this basis, the Claimant prayed that the Court grants the affected members the remedies particularised in the Amended Memorandum of Claim. **The Respondent’s submissions** 1. In its submissions dated 29th June 2026, the Respondent identified the following issues for determination: 2. Whether the redundancy process was undertaken lawfully, 3. Whether the reasons advanced by the Respondent for declaring the Claimant’s members redundant were valid, justifiable and sufficient, 4. Whether the prescribed criteria for selecting the employees to be declared redundant were followed, 5. Whether reinstatement was a practicable remedy, 6. Whether the affected employees were entitled to compensatory damages. 7. On the first issue, the Respondent submitted that as was held by the Court of Appeal in ***Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 403 (KLR)***, for a termination of employment on account of redundancy to be lawful, it must be both substantively justified and procedurally fair. Citing section 40(1) of the Employment Act, 2007, the Respondent submitted that all the requirements set out therein must be satisfied before a termination on account of redundancy can be regarded as lawful. 8. Regarding the requirement to give notice, the Respondent submitted that sections 40(1)(a) and (b) required an employer to notify the employees likely to be affected or their trade union, if the affected employees were unionised. 9. The Respondent maintained that it complied with that obligation by serving a notice of intention to declare redundancies dated 2nd April 2025 upon the Claimant. This was followed by the declaration of redundancy communicated through a letter dated 13th May 2025, which, according to the Respondent, commenced the statutory notice period of 30 days. It contended that the notices fully satisfied the statutory requirement of not less than one month’s notice. 10. In response to the Claimant’s reliance on clause 10(a) of the CBA, which required the Respondent to issue two months’ notice rather than the statutory notice of 30 days, the Respondent submitted that the CBA relied upon by the Claimant was inapplicable because its prescribed duration was from 2013 to 2017. 11. According to the Respondent, the CBA had expired, had not been renewed and was therefore no longer binding upon it. 12. The Respondent accordingly maintained that it was bound only by the notice period prescribed under section 40 of the Employment Act. 13. The Respondent further disputed the assertion that notice ought to have been issued to both the affected employees and their trade union. It submitted that such an interpretation was inconsistent with sections 40(1)(a) and (b), which prescribed different forms of notification depending on whether the affected employees were members of a trade union. In support of that position, the Respondent relied on ***Thomas De La Rue (K) Ltd v Omutelema [2013] KECA 492 (KLR*** 14. The Respondent submitted that, because the affected employees were members of KUDHEIHA, the notice given to the union on 2nd April 2025 was proper, lawful and sufficient. 15. Regarding consultations, the Respondent submitted that the purpose of the statutory notice period of at least 30 days was to provide the employer and the union with a structured opportunity to engage in genuine consultations concerning the reasons for the proposed redundancy and the manner in which it should be implemented before a final decision was made. Relying on ***Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 403 (KLR)*** and ***The German School Society & Another v Ohany & Another, Civil Appeals Nos. 325 and 342 of 2018 (Consolidated),*** the Respondent submitted that consultations are intended to enable the parties to discuss and negotiate a way of averting the intended redundancy, where possible, or the best manner of implementing it where it is unavoidable. 16. The Respondent maintained that it acted in accordance with those principles. Following the initial notice dated 2nd April 2025, it invited the Claimant to a consultative meeting through a letter dated 9th April 2025. A further consultative meeting was held on 23rd April 2025, during which PKF, the independent consultant, presented a detailed analysis of the Respondent’s financial position. It was submitted that the Claimant was afforded an opportunity to raise questions, seek clarification and propose alternatives to redundancy, and that the individual redundancy letters were not issued until 13th May 2025. 17. The Respondent maintained that the process extended beyond the statutory period of 30 days and afforded the parties sufficient time to engage in meaningful consultations. In this regard, it relied on paragraph 3 of the final declaration of redundancy dated 13th May 2025, which stated that some of the Claimant’s recommendations had been adopted and incorporated into the final plan for addressing the University’s financial crisis. 18. On whether the reasons for the redundancy were valid and justifiable, the Respondent stated that those reasons were set out in its Response to the Amended Memorandum of Claim and included dwindling government funding, declining student enrolment, the maintenance of substantially the same staffing levels despite the reduction in student numbers, consequential overstaffing and the closure of some of its campuses. 19. According to the Respondent, its Consolidated Annual Report and Financial Statements for the financial year ended in 2024, which had been evaluated by the Auditor-General and annexed to its documents, demonstrated that it was experiencing a severe and continuing financial crisis that involuntarily necessitated the terminations. Reliance was placed on ***Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 403 (KLR)*** and ***Lebo & 331 Others v Kenya Power & Lighting Company Limited [2023] KEELRC.*** 20. The Respondent submitted that, unless corrective measures were taken, it faced the risk of closure. It maintained that economic downturns, rightsizing and overstaffing had been judicially recognised as valid grounds for redundancy. 21. The Respondent further submitted that 72% of its total income was being utilised to meet employee emoluments, against a prescribed maximum of 35%. On that basis, it relied on section 26 of the Public Finance Management (National Government) Regulations, 2015, which imposes a 35% revenue-to-compensation ceiling. According to the Respondent, that fiscal requirement provided a substantive corporate-governance justification for rightsizing within the public sector. 22. The Respondent also relied on Chapter 7.1(b) of the Mwongozo Code of Governance for State Corporations, which requires an organisation’s objectives to promote its future sustainability and compliance with public finance laws. It submitted that, where a state corporation’s wage bill exceeds 35% of its revenue, its board is required to undertake rightsizing measures to correct the resulting fiscal imbalance. In the Respondent’s case, its wage bill had risen to 72% of its revenue. 23. The Respondent urged the Court to apply that reasoning, considering that its wage bill, at 72% of its total revenue, was more than twice the stated fiscal target of 35%. 24. The Respondent contended that it had demonstrated valid, fair and sufficient reasons for undertaking the redundancy. 25. On whether the prescribed selection criteria were followed, the Respondent submitted that the law does not prescribe a rigid selection formula but instead requires an employer to adopt objective, transparent and reasonable criteria that take into account all the statutory factors. It maintained that seniority, including the last in first out principle, is an important consideration but is not absolute and must be balanced against the affected employees’ skill, ability and reliability. 26. The Respondent further submitted that redundancy remains a legitimate managerial prerogative when exercised lawfully. Relying on the case of ***Freight In Time Ltd v Rosebell Wambui Munene [2018] eKLR*** it submitted that what the law prohibits is arbitrariness, discrimination or a complete failure to consider the statutory criteria. 27. The Respondent submitted that it complied with section 40(1)(c) and the applicable ILO principles. In view of its severe financial difficulties, it engaged PKF, which it described as an internationally recognised independent consulting firm, to undertake a professional and objective staff-rationalisation exercise. The Respondent stated that PKF undertook a comprehensive analysis and utilised a methodology that accorded weight to seniority, with longer-serving employees possessing relevant experience scoring higher, while also balancing seniority against skill, ability and reliability, as required under the Employment Act and the applicable ILO Recommendation. 28. The Respondent submitted that this approach satisfied the statutory requirement to have “due regard” to the prescribed factors. It maintained that courts have accepted the use of independent experts and scoring matrices where the criteria employed are objective, consistent and properly documented. 29. The Respondent argued that the Claimant had not identified any particular employee who was incorrectly scored, any instance of discrimination or any specific failure to consider seniority. 30. The Court was therefore urged to find that the selection criteria was fair, objective and lawful and complied with section 40(1)(c) of the Employment Act and the principles contained in ILO Recommendation No. 119. 31. On whether reinstatement, the Respondent submitted that its financial and economic difficulties were well known and supported by public documents capable of judicial notice, relying on the decision in ***New Zealand Educational Institute v Board of Trustees of Auckland Normal Intermediate School***. 32. According to the Respondent, its financial analysis demonstrated persistent difficulties arising from dwindling government support, reduced student enrolment and the retention of substantially the same staffing levels despite the decline in student numbers, thereby resulting in overstaffing. 33. The Respondent submitted that returning the affected employees to an institution that lacked the ability to pay them reliably or provide a stable working environment would erode staff morale, aggravate its cash-flow difficulties and potentially precipitate its collapse. That such an outcome would not serve the interests of justice. 34. The Respondent maintained that it had acted responsibly by confronting its financial realities in carrying out the redundancies. That reinstatement would amount to a hollow victory for the affected employees because it would return them to an institution that could not guarantee their continued employment while simultaneously accelerating its financial decline. 35. The Respondent further submitted that an employer retains the prerogative to declare employees redundant where there is a genuine and justifiable operational reason for doing so, relying on the decision in ***John Njau Mwaura v Kenya Power & Lighting Company [2021] KEELRC 1571 (KLR).*** 36. Lastly, on whether compensatory damages were available, the Respondent submitted that the redundancy was supported by compelling substantive reasons arising from the University’s dire financial position and that the resulting terminations were undertaken in compliance with the procedural requirements under section 40(1) of the Employment Act. 37. The Respondent submitted that compensation is not an automatic remedy and that the Court is required to exercise its discretion judiciously after considering all the circumstances of the case. 38. The Respondent urged the Court to take into account its severe financial and economic difficulties, including its unsustainable wage bill, reduced government capitation and mounting debts. In support of this position, reliance was place on the case of ***Kisii University v Kenya University Staff Union (KUSU)*, Civil Appeal No. E145 of 2022 [2024] KECA 656 (KLR)**. The Court was urged to adopt a similarly fair, balanced and proportionate approach. In this regard, the Respondent submitted that because the redundancy was driven by genuine financial necessity and the University continued to experience severe financial constraints, any compensation awarded should be modest rather than excessive. 39. In the end, the Respondent prayed that the Amended Memorandum of Claim be dismissed and that the Claimant be ordered to bear the costs of the suit. ***Determination*** 1. Having considered the pleadings on record and the submissions by the parties, the issues arising for determination are:- 2. Whether the redundancy was founded upon a valid and genuine reason; 3. Whether the Respondent complied with the substantive and procedural requirements governing redundancy; 4. What orders should issue. 5. At the onset, I need to acknowledge that the redundancy process challenged in the present proceedings was also the subject of the dispute in ***Universities Academic Staff Union v Moi University and Kenya Universities Staff Union v Moi University & 2 Others*, ELRC Causes Nos. E018 and E020 of 2025 (Consolidated)**, previouslyconsidered by this Court 6. The earlier proceedings concerned the same Respondent, the same notice of intention to declare redundancy dated 2nd April 2025, the same letters of redundancy dated 13th May 2025 and the same selection methodology developed by PKF. There is, however, a material factual distinction between those proceedings and the present claim. In the consolidated causes, the affected employees approached the Court before the redundancy notice had taken effect and while they were still in the Respondent’s employment. In the present case, the Claimant instituted these proceedings after the effective date of the redundancy and after the employees had already left the Respondent’s employment. 7. In the consolidated causes, the Court found that, although the Respondent had a valid reason to undertake a rightsizing exercise, the process was flawed because there had been no meaningful consultation with the unions, the selection criteria did not comply with section 40(1)(c) of the Employment Act, and the Respondent had not demonstrated that it had made provision for payment of the affected employees’ redundancy dues. 8. Since the employment relationship in those proceedings was still subsisting, the Court ordered the withdrawal of the letters of termination dated 13th May 2025 and permitted the Respondent to commence the redundancy process afresh in strict compliance with section 40(1) of the Employment Act. *Whether the redundancy was founded upon a valid and genuine reason* 1. Section 40(1) of the Employment Act provides for redundancy as follows: *40. Termination on account of redundancy* *(1) An employer shall not terminate a contract of service on account of redundancy unless the employer complies with the following conditions—* *(a) where the employee is a member of a trade union, the employer notifies the union to which the employee is a member and the labour officer in charge of the area where the employee is employed of 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;* *(b) where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer;* *(c) the employer has, in the selection of employees to be declared redundant had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy,* *(d) where there is in existence a collective agreement between an employer and a trade union setting out terminal benefits payable upon redundancy, the employer has not placed the employee at a disadvantage for being or not being a member of the trade union;* *(e) the employer has where leave is due to an employee who is declared redundant, paid off the leave in cash;* *(f) the employer has paid an employee declared redundant not less than one month’s notice or one month’s wages in lieu of notice; and* *(g) the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days pay for each completed year of service.* 1. Further, the CBA applicable to the parties herein provide for redundancy as follows: *In the event of redundancy, the following principles shall apply.* * 1. *The union shall be informed in wring at least two months before the day of the intended redundancy and of the reasons and extent of the redundancy for consultation and consensus on the smooth severance taking into consideration all the provisions of the law.* 2. *The adopted principle shall be last-in first -out in the particular grade to employees affected subject to all other factors such as skills, merit, ability and reliability being equal.* 3. *The redundant employee(s) will;* 1. *Be entitled to appropriate period of notice or pay in lieu of notice and other entitlements covered by this agreement including traveling allowance (passage and baggage) calculated on pro-rata basis related to his/her accumulated leave.* 2. *Be entitled to his unutilized leave days or to payment in lieu thereof.* 4. *Severance pay shall be paid at the rate of thirty (30) days for each completed year of service.* 1. Section 26 of the Employment Act provides: *26. Basic minimum conditions of employment (1) The provisions of this Part and Part VI shall constitute basic minimum terms and conditions of contract of service.* *(2) Where the terms and conditions of a contract of service are regulated by any regulations, as agreed in any collective agreement or contract between the parties or enacted by any other written law, decreed by any judgment award or order of the Industrial Court are more favourable to an employee than the terms provided in this Part and Part VI, then such favourable terms and conditions of service shall apply.* 1. The employees declared redundant are therefore entitled to the more favourable terms between the Act and the CBA. 2. The Respondent attributed the redundancy to declining student enrolment, reduced Government funding, closure of some of its campuses, overstaffing and an unsustainable wage bill. According to the Respondent, employee emoluments accounted for approximately 72% of its total revenue. 3. The material presented before the Court demonstrates that the Respondent was experiencing serious and sustained financial difficulties. A reduction in revenue, overstaffing and the need to restructure an institution’s operations constitute valid operational reasons for redundancy. 4. As I found in the consolidated causes referred to above, the Respondent had valid reason to undertake a staff-rationalisation exercise. *Whether the Respondent complied with the substantive and procedural requirements governing redundancy* 1. The Respondent issued notice dated 2nd April 2025 to the Claimant communicating its intention to declare some of the Claimant’s members redundant. That notice did not specify the number or categories of employees likely to be affected or the proposed date upon which the redundancies would take effect. 2. Section 40(1)(a) requires an employer to notify the union and the labour officer of both the reasons for and the extent of the intended redundancy. The expression “extent of the intended redundancy” requires the employer to disclose sufficient information concerning the number and categories of employees likely to be affected. Such information enables the union to participate effectively in consultations and to propose measures capable of averting or minimising the terminations. 3. The CBA on the other hand provides that the union shall be informed in wring at least two months before the day of the intended redundancy and of the reasons and extent of the redundancy for consultation and consensus on the smooth severance taking into consideration all the provisions of the law. 4. The notice dated 2nd April 2025 did not disclose the extent of the proposed redundancy. It merely stated that the details of the affected employees and the proposed timeline would be communicated in due course. It was therefore deficient in a material respect. 5. The notice was also not compliant with the CBA which provides that the union shall be informed in writing at least two months before the day of the intended redundancy. 6. The Respondent also failed to demonstrate that the labour officer in charge of the area where the affected employees were employed was served with the requisite notice. Notification of the labour officer is a mandatory statutory requirement and cannot be substituted by notification of another Government office. 7. In ***Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 403 (KLR),*** the Court of Appeal explained that the purpose of a redundancy notice is to afford the parties an opportunity to consider measures to avert or minimise the intended terminations and mitigate their adverse effects upon the employees concerned. 8. The Respondent invited the Claimant to consultative meetings after issuing the notice dated 2nd April 2025. The existence of meetings does not, however, necessarily establish meaningful consultation. The employer must disclose the information necessary to facilitate informed participation and must allow sufficient time for the union’s representations and proposed alternatives to be genuinely considered before the decision becomes final. That is the essence of the two months’ notice in the CBA which complies with the Act which provides for not less than one month’s notice be given to the union before the redundancy is effected. 9. In the present case, the Respondent issued the individual redundancy letters dated 13th May 2025 before the consultations were meaningfully concluded and before the Claimant’s concerns regarding the affected positions and the applicable selection criteria had been resolved. This was against the provision of the CBA which states that there shall be “consultation and consensus on the smooth severance taking into consideration all the provisions of the law”. 10. As was held in the consolidated causes, the consultation process was premature and incomplete. The redundancy letters were issued before the parties had meaningfully engaged on the alternatives to redundancy, the extent of the proposed terminations and the criteria to be applied in selecting the affected employees. 11. On the selection criteria, Section 40(1)(c) of the Employment Act required the Respondent, in selecting the employees to be declared redundant, to have due regard to seniority in time and to the skill, ability and reliability of each employee within the particular class of employees affected by the redundancy. 12. The principle of seniority in time is ordinarily expressed through the last-in-first-out principle. Although seniority is not the sole consideration, any departure from that principle must be justified by objective and verifiable considerations relating to skill, ability and reliability. 13. The Respondent relied upon a methodology developed by PKF which considered academic qualifications, relevant years of experience and the number of years remaining before retirement. Those considerations do not correspond with the criteria prescribed under section 40(1)(c). 14. In particular, proximity to retirement is not synonymous with seniority in time. An employee may be older but have served the Respondent for a shorter period than a younger employee. The use of age or the number of years remaining before retirement could therefore disadvantage a longer-serving employee and defeat the last-in-first-out principle. 15. Further, the statutory criteria is to be applied within each particular class of employees affected by the redundancy. Employees performing comparable work within the same grade, cadre or department ought to have been assessed against one another. A standardised methodology applied indiscriminately across different cadres and departments as was done by the Respondent through PKF does not satisfy that requirement. 16. The burden of demonstrating compliance with section 40 rested upon the Respondent because the relevant records were within its possession and peculiar knowledge. The Respondent could not shift that burden to the Claimant by contending that the union had failed to identify a particular employee who had been incorrectly scored. 17. I therefore find, consistently with the decision in the consolidated causes, that the Respondent did not demonstrate compliance with section 40(1)(c) of the Employment Act. 18. With regard to the payment of redundancy dues, the Respondent stated that it had arrived at a preliminary estimate of approximately Kshs. 6.7 billion as the amount required to settle the affected employees’ terminal dues and was working towards securing the necessary funds. The wording used in section 40(1) of the Act is very clear, that “*An employer shall not terminate a contract of service on account of redundancy unless the employer complies with the following conditions …”* the Act obligates the employer to pay all redundancy dues before the employee is released on account of redundancy. 19. An acknowledgment of the obligation to pay or a statement that the employer is attempting to secure the necessary funds does not constitute compliance. The Respondent did not demonstrate that the affected employees had been paid their redundancy dues before their release from employment. 20. It follows that the termination of the employment of the Claimant’s 438 affected members on account of redundancy was procedurally unfair and unlawful. However, unlike the employees in the consolidated causes, the Claimant’s affected members instituted the present proceedings after the redundancy had taken effect and after they had already left the Respondent’s employment. An order withdrawing the redundancy letters and directing that the process commence afresh would therefore neither reflect the prevailing factual circumstances nor constitute an appropriate remedy. ***What orders should issue?*** 1. The Claimant’s main prayer is that the affected members be reinstated to their previous positions and, in the alternative, compensation equivalent to 12 months’ salary for each employee. 2. Reinstatement is a discretionary remedy under section 49(3)(a) of the Employment Act and section 12(3)(vii) of the Employment and Labour Relations Court Act. In determining whether to grant the remedy, the Court must consider the factors prescribed under section 49(4), including the practicability of reinstatement, the circumstances in which the termination occurred and the existence of any common-law principle against ordering specific performance in a contract of service. 3. In the instant case, the redundancy affected 438 employees and was undertaken in response to the Respondent’s serious financial and operational difficulties. The Court has found that the Respondent had a valid and genuine reason to undertake a staff-rationalisation exercise. Reinstating all the affected employees would undermine the legitimate operational objective underlying the redundancy and could aggravate the financial difficulties that necessitated the exercise. 4. Further, the affected employees had already left the Respondent’s employment by the time these proceedings were instituted. Considering the number of employees involved, the Respondent’s financial position and the circumstances surrounding the terminations, the Court is not persuaded that reinstatement is a practicable or appropriate remedy. 5. The alternative prayer is for compensation equivalent to 12 months’ salary. Compensation under section 49(1)(c) of the Employment Act is discretionary and the Court must consider the factors prescribed under section 49(4) of the Act. 6. As I have already found, theredundancy was founded upon a genuine operational reason. The unfairness arose from the Respondent’s failure to comply with the prescribed procedure, particularly the requirements relating to notice, meaningful consultation, objective selection criteria and payment of redundancy dues. 7. Having considered the Respondent’s genuine financial difficulties, the number of employees affected, the procedural nature of the unfairness established and the circumstances surrounding the termination, I find that an award equivalent to two months’ gross salary for each affected employee constitutes fair and reasonable compensation. 8. Regarding redundancy dues, section 40(1)(e), (f) and (g) of the Employment Act requires an employer to pay accrued but untaken leave, notice pay and severance pay at the rate of not less than 15 days’ pay for every completed year of service. In this case the employees were subject to a Collective Bargaining Agreement which prescribed the payments due to an employee declared redundant. The Respondent did not establish that these amounts had been paid. The affected members are therefore entitled to their outstanding statutory and contractual redundancy dues as per the CBA, less any amounts already paid under the same heads, if at all. 9. The Respondent submitted that the CBA relied upon by the Claimant was inapplicable because its prescribed duration was from 2013 to 2017. As a matter of clarification, section 59(3) of the Labour Relations Act provides: *(3) The terms of the collective agreement shall be incorporated into the contract of employment of every employee covered by the collective agreement.* 1. This means that upon registration of a CBA, the terms thereof are by operation of the law, incorporated into the terms of service of each employee covered by the same. The expiry of the term of the CBA therefore does not extinguish or in any way diminish the accrued benefits under the CBA which remain part of the terms of employment of each employee subject to the CBA. 2. Further, the effective date clause of the CBA reads: *47. DURATION AND EFFECTIVE DATE* *This agreement shall be for a period of four (4) years with effect from 1st July, 2013 to 30th June, 2017. Thereafter, the agreement shall remain in force until revised jointly by both parties.* [Emphasis added] 1. The agreement was thus still in force and binding upon all the parties thereto, including the Respondent, at the time of the redundancy. 2. In the upshot, the Court makes the following orders: 3. A declaration is hereby issued that the termination of the employment of the Claimant’s 438 affected members on account of redundancy was procedurally unfair and unlawful for failure to comply with section 40(1) of the Employment Act. 4. The prayer for reinstatement is declined. 5. The Respondent shall pay each affected employee compensation equivalent to two months’ gross salary. 6. The Respondent shall pay each affected employee all outstanding redundancy dues, including accrued but untaken leave, notice pay and severance pay at the rate prescribed under section 40(1)(g) of the Employment Act or the applicable Collective Bargaining Agreement, whichever is more favourable to the employee. 7. Any amounts already paid to an affected employee under any of the foregoing heads shall be deducted from the amount due to that employee. 8. The sums awarded shall attract interest at court rates from the date of judgment until payment in full. 9. Each party shall bear its own costs. 10. Orders accordingly. **DATED, SIGNED AND VIRTUALLY AT ELDORET** **ON THIS 30TH DAY OF JULY, 2026** **MAUREEN ONYANGO** **JUDGE**