Mburugu v Opes-Lcef Consulting Ltd (Cause E299 of 2026) [2026] KEELRC 2073 (KLR) (10 July 2026) (Ruling)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **CAUSE NO. E229 OF 2026** *(Before Hon. Lady Justice Agnes Kitiku Nzei)* **SARA KINYA MBURUGU CLAIMANT** *VERSUS* **OPES-LCEF CONSULTING LIMITED ..RESPONDENT** **RULING** **Background** 1. The Claimant/Applicant sued the Respondent vide a Memorandum of Claim dated 5th March, 2026, seeking the following reliefs:- 2. *A declaration that the Respondent’s decision to terminate the Claimant’s employment under the guise of redundancy was unlawful and unfair.* 3. *A declaration that the redundancy process was procedurally and substantively defective for failure to comply with Section 40 of the Employment Act 2007.* 4. *An order setting aside and nullifying the redundancy notice dated 28th February, 2026.* 5. *In the alternative to (c) above, a declaration that the Claimant was unfairly terminated.* 6. *Payment of salary for the unexpired term of fourteen (14) months amounting to Kshs.3,500,000/=.* 7. *Compensation for unfair termination under Section 49(1)(c) of the Employment Act, being twelve (12) months’ gross salary.* 8. *One month salary in lieu of notice.* 9. *Severance pay at the rate prescribed under Section 40 of the Employment Act.* 10. *Payment in lieu of accrued and untaken leave days.* 11. *Costs of the suit.* 12. *Interest on (e), (f), (g), (h), (i) and (j) above at Court rates.* 13. *Any other or further relief the Court may deem just.* 14. The Claimant/Applicant pleaded; **inter-alia:-** 15. *that the Claimant is employed [by the Respondent] as an Investment Associate on a fixed term contract from* ***1st May, 2025 to 30th April, 2027****; and that during a virtual meeting held on* ***16th February, 2026*** *between the Claimant and the Respondent’s General Manager* ***[Ms Elizabeth Nyguist who is based in Italy]****, the Claimant was informed by the said General Manager that the Respondent had decided to terminate the Claimant’s employment due to undesirable news from one of the Respondent’s Portfolio Companies.* 16. *that the foregoing came as a shock to the Claimant as she had not received any prior communication or warning regarding the reason advanced.* 17. *that on* ***22nd February, 2026****, the Claimant/Applicant received, via email, a Mutual Separation Agreement from the Respondent’s Lawyer who also serves as a Director, one* ***Byron Ogutu****, offering a four-month exit package in exchange for termination of the employment contract.* 18. *that the Claimant sought independent Counsel on the Proposed Agreement, and that on 22nd February, 2026, her Advocates officially rejected the offer and issued a counter-proposal to* ***Byron Ogutu (on a without prejudice basis)****.* 19. *that in response to the counter-proposal, the Respondent was on* ***2nd March, 2026*** *issued with a one month Redundancy Notice dated 28th February, 2026 purporting to declare her position redundant.* 20. *that the Respondent failed to comply with the mandatory provisions of Section 40 of the Employment Act 2007, including prior and genuine consultation with the Claimant prior to issuance of the Redundancy Notice. That the Respondent’s actions violated Sections 40, 45 and 49 of the Employment Act and the Claimant’s constitutional right to fair labour practices.* 21. *that the redundancy notice is retrospective, pretextual and unlawful.* 22. *that the purported redundancy was an afterthought and a pretext designed to justify a predetermined termination.* 23. *that the Respondent failed to establish a valid and fair reason for termination pursuant to Sections 43 and 45 of the Employment Act.* 24. The suit was filed contemporaneously with an urgent Notice of Motion dated 5th March, 2026 which is now before me for determination. **Notice of Motion dated 5th March, 2026** 1. The Claimant/Applicant seeks the following Orders:- 2. *Spent.* 3. *Spent.* 4. *Spent.* 5. *That a conservatory be issued staying the Redundancy Notice dated 28th February, 2026 and issued to the Claimant/Applicant pending the hearing and determination of the main cause.* 6. *That the Court be pleased to preserve the employer-employee relationship between the parties pending the hearing and determination of the main cause.* 7. *That costs of the application be provided for.* 8. The application sets out on its faces the grounds on which it is brought, and is based on the Claimant/Applicant’s supporting affidavit sworn on 5th March, 2026, restating matters pleaded in the Memorandum of Claim filed herein; and set out at paragraphs 1 and 2 of this Ruling. 9. Documents annexed to the said supporting affidavit include copies of the contract of employment dated 1st May, 2025, draft Release and Mutual Separation Agreement together with the forwarding email dated 22nd February, 2026, and a Notice of Redundancy dated 28th February, 2026. 10. The said forwarding email, dated 22nd February, 2026, states as follows, in part:- **“Our conversation during the week refers.** **Please find attached a draft agreement for your review, approval and execution.** **We hope we can execute the same before the end of the week.** **Kind regards.** **Byron.”** 1. The application is opposed by the Respondent vide a replying affidavit of **Byron W. Ogutu**, a Director of the Respondent company, sworn on 16th March, 2026. It is deponed in the said replying affidavit, **inter-alia:-** 2. *that the sole shareholder in the Respondent Company, OPES-LCEF (Sole Shareholder), incorporated the Respondent herein to provide to it (the sole shareholder) consultancy and investment support services.* 3. *that the sole shareholder has made investments in several portfolio companies through the investment program managed by the Respondent.* 4. *that unfortunately, the portfolio companies have not performed as expected and that the Claimant, by virtue of her role as an Investment Associate, was fully aware of those challenges.* 5. *that in late 2025, the sole shareholder made a decision to close down the operational activities of the Respondent company, and communicated that decision to the Respondent.* 6. *that the Claimant indicated that she would be open to the concept of mutual separation, and that parties discussed the proposed commercial terms; but subsequently retained Counsel who wrote to the Respondent rejecting the proposed settlement terms; and instead demanding payment equivalent to 13 months’ salary.* 7. *that in view of the Respondent’s financial inability to meet the demands made by the Claimant, the Respondent had no reasonable alternative but to initiate statutory redundancy, and issued a letter dated 28th February, 2026 to the Claimant outlining the reasons for redundancy; and that the redundancy notice invited the Claimant to attend a Consultation Meeting on 5th March, 2026 at 4.00 p.m.* 8. *that the notice informed the Claimant that she was at liberty to attend the consultation with a representative or advocate and to propose an alternative meeting date if the proposed date was not convenient. That the Claimant failed and/or declined to attend the scheduled consultation.* 9. *that the Claimant’s application is premature.* 10. *that the Respondent remains willing to engage the Claimant in the consultation process and to comply with all statutory requirements relating to redundancy.* 11. *that the Claimant’s contract provides that the employment relationship may be terminated by either party upon issuance of one a (1) month written notice or payment of one month salary in lieu of notice. That the Claimant’s employment was at all times capable of lawful termination prior to lapse of the fixed term in accordance with the agreed contractual terms.* 12. *that the Claimant has not demonstrated the existence of a* ***prima facie*** *case with a probability of success; and that she is likely to suffer irreparable harm.* 13. Documents annexed to the said replying affidavit include copies of the Respondent’s CR12, a letter from the Claimant’s Advocates dated 27th February, 2026 **(“marked strictly without prejudice”)**, and a copy of the employment contract, among other documents. 14. Having considered the application and the affidavits sworn in support and in opposition to the application, the sole issue that falls for determination is whether the orders sought are deserved. 15. It is a common ground that the Claimant/Applicant is on a fixed term contract of employment for a duration of 24 months, commencing on 1st May, 2025 and ending on 30th April, 2027. Clause 4 of the contract of employment, duly executed by both parties, states as follows:- **“4. Your engagement as an employee of OPES will be for a fixed duration of 24 months starting on 1st May, 2025 (the “Effective Date”) and ending April 30, 2027”.** 1. On termination, Clause 14 of the said fixed term contract states as follows:- **“14. Termination of employment will occur in the event of one of the following: by notice, retirement, summary dismissal, protracted illness, permanent disability or death.** **Your termination of employment with OPES may be terminated by the submission of one month’s written notice from either party to the other or payment of one month’s salary in lieu of notice”.** 1. The Respondent is shown to have sought to terminate the Claimant’s fixed term employment on account of **“redundancy”,** which is not one of the covenanted grounds on which the employment can be terminated. This the Respondent has attempted to do vide a **“Notice of Redundancy”** dated 28th February. This is an outright breach of the aforestated terms of the Claimant’s contract of employment; which clearly states the grounds on which it can be terminated. 2. Redundancy is **not** one of the stated grounds for termination, and the Respondent’s attempt to explain that the purported one month **“redundancy notice”** fits in the covenanted grounds of termination must fail. A **“redundancy notice”** falls under the provisions of Section 40 of the Employment Act. A **“termination notice”** as stated in Clause 14 of the Claimant’s employment contract, in my view, falls under Section 35(1)(c) of the Employment Act. Such a termination clause **(by notice)** cannot be invoked by an employer unless there are **valid reasons** for termination pursuant to Sections 43(1) and 45(2)(a) of the Employment Act. Even where a valid reason for termination exists, an employee must be given an opportunity to be heard. I stated as follows in the case of **Kagai – vs – Kenga Equatorial Hotels Limited t/a Mombasa Continental Resort [2024] KEELRC 2641 (KLR):-** ***“20. It is worthy noting that the foregoing letter did not state the reason for terminating the Claimant’s employment. The fact that Clause 18 of the Claimant’s employment contract provided that either party could terminate the contract by giving the other a one month notice or by paying one month pay (salary) in lieu did not mean that the Respondent could terminate the Claimant’s employment without a valid reason. The said clause could only be invoked by the Respondent if it had a valid reason to terminate the contract of employment.*** ***21. . . .*** ***22. . . .*** ***23. Section 43(2) of the Employment Act, 2007 provides as follows:-*** ***“(2) The reason or reasons for the termination are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.*** ***21. The import of the foregoing, in my view, is that where a letter of termination of employment is issued by an employer, the reason or reasons for terminating the employee’s contract must be stated in that letter. It is that reason or reasons whose validity the employer would be required to prove in any claim arising out of the termination of contract.”*** 1. In cases where an employer decides to declare redundancies, such employer must, as a matter of law, comply with Section 40 of the Employment Act; and must demonstrate how, in adherence to provisions of the said Section, it settled on the employee for redundancy. 2. Section 40(1)(c) of the Employment Act provides that:- ***"(1) An employer shall not terminate a contract of service on account of redundancy unless the employer complies with the following conditions:-*** 1. ***. . .*** 2. ***. . .*** 3. ***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.”*** 4. It is clear from the foregoing mandatory provisions of the statute that the foregoing procedure/formular is to be undertaken and accomplished **before** issuance of redundancy notices to any employees or employee identified and earmarked for redundancy. An employer **cannot** purport to undertake consultations with employees **after** issuance of redundancy notices. Issuance of a redundancy notice marks the count-down to the termination date, and is usually the final phase of the redundancy process after all the statutory requirements have been satisfied. 5. In the present case, the employer purported to invite the Claimant/Applicant for **“a consultation meeting”** vide the impugned redundancy notice dated 28th February, 2026. For reasons aforestated, the redundancy notice in issue is an illegality, and the purported redundancy process is a sham. 6. The Claimant/Applicant has demonstrated that she has a **prima facie** case with a possibility of success, and her application herein passes the test set in the decision of the Court of Appeal for Eastern Africa in the case of **Giella – vs – Cassman Brown & Co. Ltd [1973] EA 358**. 7. In sum, and having considered written submissions filed on behalf of both parties herein, the Notice of Motion dated 5th March, 2026 is hereby allowed in the following terms:- 8. **The employer-employee relationship between the Claimant and the Respondent shall remain as per the terms of the contract of employment dated 1st May, 2025 pending hearing and determination of the suit herein, unless the contract is lawfully and contractually terminated, or unless the same terminates by effluxion of time.** 9. **Costs of the application shall be in the main suit.** 10. **The suit herein shall be fast-tracked, and shall be fixed for hearing.** **DATED, SIGNED AND DELIVERED AT NAIROBI THIS** **10TH DAY OF JULY 2026** **AGNES KITIKU NZEI** **JUDGE** **ORDER** This Ruling has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees. **AGNES KITIKU NZEI** **JUDGE** **Appearance:** Mr. Mutunga for the Claimant No appearance for the Respondent