https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2423

REPUBLIC OF KENYA IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI ELRC CAUSE NO. 179 OF 2019 BRIAN NYABIERO NYACHIEO……………………………………………………….………………1ST CLAIMANT LILIAN WANJIRU GITONGA…………………………………………………………………………2ND CLAIMANT MARTHA WACERA GITHIO…………………………………………………………………..…...…3RD CLAIMANT MARY ANNE GITHINJI ……………………………………………………………...………...........…4TH CLAIMANT EMMANUEL GITHINJI NJENGA …………………………………………………………...……....5TH CLAIMANT RUTH KATELA KAVATA……………………………………………..………………………………….6TH CLAIMANT NATHAN KIPYOS……………………………………………..…………...……………………………..7TH CLAIMANT KENNETH WANGAI MUREITHI…………………………………………………………………….8TH CLAIMANT CAROLE KIRUMBA………………………………..………………..………………………………...…9TH CLAIMANT JOY MWARARI………………………………..……………………..…..………………………………10TH CLAIMANT PETER KABUGA………………………………..……………………..……………………………...…11TH CLAIMANT -VS- KENYA ORIENT INSURANCE LTD……………………………………...……RESPONDENT Coram Before Lady Justice Jemimah Keli C/A Otieno JUDGMENT 1. The 11 claimants, aggrieved by the termination of their contracts of service, filed a joint suit against the respondent by way of a memorandum of claim dated 21st March 2019 and amended on 3rd March 2020, seeking the following relief- 2. A declaration that the termination on account of redundancy of the Claimants by the Respondent is irrational, unfair, illegal, wrongful and unlawful. 3. A declaration that the redundancy is unlawful and amounts to unfair labour practices. 4. The Claimants be paid the amounts they would have earned under the full term of their employment as well as if they would not have been terminated. 5. General Damages. 6. Costs of the claim. 7. Interest on (c), (d) and (e) above. 8. Any other or further relief that the court may deem fit to grant. 9. In support of their claim, the Claimants filed their list of witnesses dated 9th May 2025; 1st Claimant’s Witness Statement dated 9th May 2025; 2nd Claimant’s Witness Statement dated 9th May 2025; 3rd Claimant’s Witness Statement dated 9th May 2025; 4th Claimant’s Witness Statement dated 9th May 2025; 5th Claimant’s Witness Statement dated 9th May 2025; 6th Claimant’s Witness Statement dated 9th May 2025; 7th Claimant’s Witness Statement dated 9th May 2025; 8th Claimant’s Witness Statement dated 9th May 2025; 9th Claimant’s Witness Statement dated 9th May 2025; 10th Claimant’s Witness Statement dated 9th May 2025; 11th Claimant’s Witness Statement dated 21st March 2019; list of documents of even date; and further list of documents dated 27th June 2025. 10. In response to the claim, the Respondent entered an appearance through the law firm of Coulson Harney LLP and filed a memorandum of defence dated 2nd October 2020. In support of their response, the Respondent filed a list of documents dated 2nd October 2020; a list of witnesses dated 2nd October 2020; and a witness statement of JAMES KAGUCHIA dated 1st October 2020, which was later replaced by a witness statement of MARIAN KILLU dated 12th August 2025. Hearing and evidence 1. The claimants’ case was heard on the 14th October 2025. CW1 was Brian Nyabiero Nyachieo, who relied on the amended memorandum of claim and his witness statement dated 9th May 2025 as his evidence in chief. CW1 was produced as the claimant’s exhibits under the list dated 9th May 2025. The documents at pages 1-9(claimants’ bundle) were produced as C-exhibit 1 , C-exhibit 11 was at pages 95-107 (claimants’ bundle) , as C-exhibit 12 at pages 108-144(claimants’ bundle) , as C-exhibits 13 at pages 145-225(claimants’ bundle) , ac-exhibit 14 at pages 226-230(claimants’ bundle) , as C-exhibit 15 at pages 231-233(claimants’ bundle) . The claimant produced his certificates under section 65 and 105 of the evidence act dated 9th may 2020 and 6th October 2025. CW1 was cross-examined by counsel for the respondent, Wameyo, on the same date. On the even date, the claimant called as CW2 was Lilian Wanjiku Gitonga. CW1 adopted her witness statement dated 9 may 2025 as her evidence in chief and as r same time amended her name to read Lilian and in paragraph 8 to read -promotion from branch accountants to accounts executive’. CW2 was cross-examined by counsel for the respondent, Wameyo. CW3 was Martha Wacera Githio. She said her name was misspelt in the statement as Gitonga. she adopted her witness statement dated 9th May 2025 . CW3 produced documents at pages 23-43 (claimants’ bundle) as C-exhibit 3. CW4 was Maryanne Githinji, who adopted as her evidence in chief her witness statement dated 9th May 2025, after amending it to read "salary of Kshs 263,209". She produced a document at page 44(claimants’ bundle) as C-exhibit 4. CW5 was Emmanuel Githinji Njenga. He adopted his witness statement dated 9th may 2025 as his evidence in chief. He produced documents at pages 45-54 (claimants’ bundle) as c-exhibit 5 .CW6 was Ruth Katela Kavata. She adopted his witness statement dated 9th may 2025 as his evidence in chief. She produced documents at pages 55-61 (claimants’ bundle) as c-exhibit 6. CW7 was Caroline Wairimu Kirumba. She adopted her witness statement dated 9th may 2025 as her evidence in chief. She produced documents at pages 79-89 (claimants’ bundle) as C-Exhibit 9. She also produced documents under list dated 27th June 2025 as C-Exhibit 9E. CW9 was Nathan Kipyos. He adopted his witness statement dated 9th may 2025 as his evidence in chief. He produced documents at pages 62-68 (claimants’ bundle) as C-Exhibit 7 . CW8 WAS Joyce Mwarari . She adopted her witness statement dated 9th may 2025 as her evidence in chief. CW10 was Kenneth Mureithi Wangai. He adopted his witness statement dated 9th may 2025 as his evidence in chief. He produced documents at pages 69-78 (claimants’ bundle) as c-exhibit 8 . CW11 was Peter Kabuga.He adopted his witness statement dated 21st March 2019 as his evidence in chief. He produced documents at pages 90-94 (claimants’ bundle) as c-exhibit 10. All the witnesses were cross-examined by counsel for the Respondent, Ms Wameyo. 2. The Respondent’s case was heard on the 16th December 2025. The RW1 was Mariam Killu. She adopted her witness statement dated 22nd April 2024 as her evidence-in-chief and produced documents under the list dated 2nd October 2020 by the Respondent as R-exhibits 1-11. She withdrew her witness statement dated 12th August 2025. The witness was cross-examined by counsel for the claimants, Bibiu. The witness was stood down, and re-examination was conducted on the 28th January 2026. The Claimants’ case in summary 1. The Claimants’ case is that they were employed by the Respondent on diverse dates and in various positions as follows: 2. The 1st Claimant was employed on a temporary contract on 13th April 2016 until 14th July as a registry clerk at the Respondent’s headquarters situated in Nairobi earning a salary of Kshs. 20,000/- per month subject to statutory deductions. Upon expiry of his temporary contract, he was retained on permanent terms commencing on 10th August 2016 at a salary of Kshs 45,000/- per month subject to statutory deductions. It is averred that during the 1st Claimant’s employment, there was only one registry clerk position, with no assistant registry clerk. either. The registry clerk served various departments of the Respondent including the claims and underwriting departments, and reported to the Assistant Manager-Claims. 1. The 2nd Claimant was employed as an Accounts Executive on 25th May 2011 at a salary of Kshs. 35,000/- working at the Respondent’s Finance and Strategy Department at its Head Office at Capitol Hill Towers. Due to her exemplary work ethic she was promoted from the position of Accounts Executive to Assistant Manager, Finance, on 7th October 2016 earning a monthly salary of Kshs.131,838.00. She held this position until 21st March 2018. 2. The 3rd Claimant was employed by the Respondent on 19th February 2012 as an Underwriting Executive at the Respondent’s Hughes Branch earning a monthly salary of Kshs. 50,000/-. He rose through the ranks to the position of branch manager working at the Respondent's Head Office at Capitol Hill Towers earning a salary of Kshs. 139, 199/-. He held this position until 21st March 2018. 3. The 4th Claimant was employed by the Respondent on 19th February 2012 as an Underwriting Executive at the Respondent’s Hughes Branch earning a monthly salary of Kshs. 50,000/-. He rose through the ranks to the position of branch manager working at the Respondent's Head Office at Capitol Hill Towers earning a salary of Kshs. 139, 199/-. He held this position until 21st March 2018. 4. The 5th Claimant was employed by the Respondent on 11th June 2012 as an IT intern and subsequently confirmed on September 2012 as an IT assistant. He was promoted on 24th April 2013 to an Assistant IT executive, and later to an IT Executive on 19th September 2014 earning a monthly salary of Kshs. 108,774/- subject to statutory deductions. 5. The 6th Claimant was employed on 30th December 2016 as a Sales Team Leader and subsequently confirmed as Relationship Officer on October 2017 at a monthly salary of Kshs. 60,000/- subject to statutory deductions. 6. The 7th Claimant was employed by the Respondent in November 2016 as an Assistant Claims Executive and after 3 months she was confirmed to the role on 25th April 2017. She earned a monthly salary of Kshs. 50,000/- subject to statutory deductions, and reported to the Senior Executive Claims supervisor. 7. The 8th Claimant was employed by the Respondent on 15th June 2015 as an Assistant Claims Executive and thereafter confirmed to the role on 25th April 2017. He earned a monthly salary of Kshs. 50,000/- subject to statutory deductions, and reported to the Senior Executive Claims supervisor. 8. The 9th Claimant was employed by the Respondent as a receptionist on 8th June 2012. She rose through the ranks to the position of Administration and Procurement Executive in the year 2014 on at a monthly salary of Kshs. 89,510/- subject to statutory deductions. 9. The 10th Claimant was employed by the Respondent as an Administrative Assistant attached to the Eldoret branch earning a monthly salary of Kshs 10,000/- during the probationary period. Upon confirmation to the role, her monthly salary was adjusted to Kshs. 20,000/- She contends that she was transferred to the Respondent’s Kisii branch serving in the same capacity in 2013 and her salary once again adjusted to Kshs. 40,000/-. She was later transferred to the Respondent’s Westlands Branch as an Underwriting Assistant earning a monthly salary of Kshs. 52,000/-, which was thereafter increased to Kshs. 65,700/-. 10. The 11th Claimant was employed by the Respondent as a Human Resource Executive through on contractual terms on 7th November 2011. He was confirmed to the same position on permanent basis on 31st March 2012. The 11th Claimant was promoted to the position of Senior Human Resource Executive on 1st April 2012, to the position of Assistant Manager Human Resources and Administration on 24th September 2013, to the position of Assistant Manager Human Resources on 1st April 2015, and finally to the position of Manager, Human Resources, on 1st January 2017 earning a salary of Kshs. 348,592.60 subject to statutory deductions. As Manager, Human Resources, the 11th Claimant indicates that he reported directly to the Managing Director and there was no other position that was senior to his in his department. 1. The Claimants’ grievance is that on 7th February 2018, they received Notices of intended Redundancy from the Respondent on the premise that the Company was undertaking restructuring and as a result there would be alteration and/or reduction in the staffing needs of the company, and the replacement of human staff with emerging technological systems. Later, on 21st March 2018, the Claimants learned that they were among the affected employees when they received Notices of Termination on Account of Redundancy which stated that they had been terminated with immediate effect, having met the Respondent's selection process. 2. The Claimants’ case is that the Respondent’s selection process was flawed and unfair as they were the sole staff in their areas of work, and for some, the Respondent failed to take into account their levels of skill and experience with the Company. Specifically, the 1st Claimant contends that he was the only one manning the registry and the only registry clerk at the Respondent Company's head office serving all the departments; and the 11th Claimant indicates that he was the only Manager, Human Resources. Further, the Claimants aver that the Respondent advertised their positions or positions with different titles but capturing job descriptions that were similar to theirs on their social media platforms. It is also averred that the Claimants were replaced by other employees who were junior to them, or lacked the necessary qualifications; and that the Respondent effected a salary increment to the remain ign employees shortly before the redundancy declaration, contrary to the averments that the Respondent was in a wage bill crisis. The Claimants are aggrieved by the entire redundancy process and procedure and the Respondent’s selection criteria. 3. The Claimants’ case is that the redundancy was driven by malice and discrimination and was merely a ploy to unlawfully terminate them from employment. Respondent’s case in brief 1. The Respondent admits that the Claimants are its former employees, and that they terminated the Claimants' employment on account of redundancy on 21st March 2018. However, they emphasize that the process leading to the termination of the employment of each of the Claimants was lawful, in that the Respondent complied with the statutory requirements to perrsonally notify its employees in writing of the reasons for and extent of the intended redundancy not less than one month before the intended date of termination on account of redundancy; to also notify the labour officer in charge of the specific area where the employee is employed of the reasons for and extent of the intended redundancy not less than one month before the intended date of termination on account of redundancy; to have due regard to seniority in time and to the skill, ability and reliability of each employee of the class of employees affected by the redundancy in selecting the employees to be declared redundant; where leave is due, to pay off the leave in cash; to give one months' notice or pay the employee not less than one month's wages in lieu of notice; and to pay the employee severance pay at a rate of not less than 15 days' pay for each completed year of service. 2. It is admitted by the Respondent that in May 2017, they resolved to carry out a staff restructuring with a view to streamlining and optimising the Respondent’s functions and aligning its staff structure to essential requirements for the reasons that they were experiencing funding challenges, and there was a need to automate the Respondent's services. To this end, the Respondent commissioned an internal review of its structure in October 2017 and a new company structure in March 2018. Further, the Respondent rolled out a new system to promote operational efficiency by automating many back-office functions related to technology, services and human resources, known as the Enterprise Resource Planning (ERP) system. 3. The Respondent contends that it issued redundancy notification letters through which it notified each and every one of its employees, including the Claimants, and the County Labour Officer of the intended staff restructuring, the possibility of redundancy, the reasons for it and the extent thereof. Thereafter the Respondent carried out consultations with all its employees by holding a meeting with all its employees on 7th February 2018, at the Respondent's office. During this meeting, the Respondent indicates that they introduced to their employees Blume Africa Limited, a third-party contractor that was to offer support during the redundancy process; and explained the redundancy process to the employees. The employees were also granted an opportunity to ask questions and seek clarifications. Additionally, it is averred by the Respondent that they conducted consultations with their employees by causing Blume Africa Limited to create an email address to allow its employees to make enquiries about the redundancy process; by holding a town hall meeting on 24th February 2018, where the redundancy process was once again explained; by holding focus group and individual confidential consultation sessions between 5th March 2018 and 15th March 2018; and by issuing questionnaires to all employees during the focus group discussions, where they filled in education details, professional qualifications and descriptions of responsibilities and competencies. 4. It is stated that following a review of its staff structure from May 2017 to February 2018, the Respondent resolved to the following 20 positions from its staff structure: a. Human Resource Manager as it determined that this position was not necessary; b. Branch Managers due to its desire to shift from branches as a sales point to a service centre and the merger of four branches to two; c. Assistant Branch Managers as it determined that the shift from branches to a service centre made no work available for this position; d. Senior Underwriting Executive as the Respondent determined that the levels of operations were too costly to warrant the maintenance of this position; e. Claims Executive as the Respondent determined that this position was not necessary; f. Underwriting Executive as the Respondent determined that the levels of operations were too costly to warrant the maintenance of this position; g. Branch Account Executive due to the shift from branches to a service centre; h. Underwriting Assistant as the Respondent determined that the levels of operations were too costly to warrant the maintenance of this position; i. Office Assistant as the Respondent determined that this position was not necessary within its staff structure; j. Administration/Procurement Executive as the Respondent determined that this position was not required at that time; k. Administration Associate as the Respondent determined that this position was not necessary; I. Alternative Distribution Channels Supervisor as the Respondent determined that this position was not required at that time; m. Relationship Officer due to the shift from branches to a service centre; n. Registry Clerk as the Respondent determined that with automation of its services, the position was not required at that time since technical support was sought from the IT Department; o. Senior Claims Executive as the Respondent determined that this position was not required at the time; p. Assistant Claims Executive; and q. Branch Account Assistant for the same reason; r. Accounts Executive as the Respondent determined that the operating costs were excessive to warrant the maintenance of this position; s. I. T. Executive (1 position) as the Respondent determined that thisposition was not required at that time; and t. Branch Administration Assistant as the Respondent determined that this position was not necessary within its staff structure. 5. As part of the restructuring exercise, the Respondent created new roles namely: a. Assistant General Manager Human Resource and Strategy; b. Human Resource Associate; c. Portfolio Managers; d. Sales Managers; e. Claims Assistants; and f. Branch Operations Manager. They adapted the roles of Claims Executives who transitioned to Claims Analysts; and Branch Account Executives who transitioned to Credit Control Associates. 6. As a result of the Respondent's decision to abolish the 20 positions that are particularized from its staff structure, it declared 43 employees who were the holders of the said positions redundant as there were no alternative positions that they could take up. The 43 employees were subsequently issued with termination letters and paid their respective final dues which comprised of salary for days worked up to and including the date of termination (i.e. 21st March 2018), one month’s salary in lieu of notice, severance pay of 15 days' pay for each completed year of service, and leave earned but not taken. 7. The Respondent emphasizes that following the redundancy process, its staff structure has been streamlined and made much smaller. 8. The Respondent denies the Claimant’s claim that they were discriminated against. In response to their specific claims, with regard to the 2nd Claimant, they deny that she ever held the position of Assistant Manager, stating that she was an Accounts Executive, and that she was declared redundant following the conversion of the Accounts Executive position (which was held by three employees ) to two new positions of Senior Associate, Finance Reporting, and Senior Associate, Budgeting & Forecasting, which were to be filled by one employee each. The 2nd Claimant was disqualified from filling these positions as she lacked a CPA-K Certificate. It is averred that the 3rd Claimant was declared redundant as her position of Assistant Branch Manager was abolished in favour of two Portfolio Manager positions, whose role was different hence disqualifying the 3rd Claimant. Further, they deny that the 3rd Claimant, a Unit Manager, was an employee, and instead state that she was paid on commission upon achieving set targets. The Respondent also denies that the 4th Claimant held the position of Regional Manager, instead stating that she was engaged as an Assistant Underwriting Manager. In respect of the 5th Claimant, the Respondent states that he was declared redundant as the IT Department required only five employees, and he had the least score following an assessment of the overall performance of the six employees’ in the department. 9. With regard to the 6th Claimant, it is averred that contrary to her claim, she served in the position of Relationship Officer, and was not an employee of the Respondent as she was paid on commission basis upon meeting set targets. The 10th Claimant’s position of Underwriting Assistant was adapted to a senior role of Underwriting Associate, hence the 10th Claimant was declared Redundant. The other Claimants’ positions were abolished with the 11th Claimant’s Human Resource Manager duties being redistributed to a senior role of Head of Strategy and Human Resources. The Respondent denies that they ought to have applied a selection criterion when determining the employees to be declared redundant, and state that the employees who were affected, save for the 2nd and 5th Claimants were not selected out of a group of employees, but rather, their positions/roles were eliminated. The Respondent further denies employing any persons to take up the positions that were held by the Claimants. DETERMINATION Issues for determination 1. The claimants addressed merit of the case for each of the claimant as pleaded in general. 2. The respondent outlined the following issues for determination in the suit- 3. Whether the Respondent had valid reasons for terminating the Claimants on grounds of redundancy; b. Whether due process of redundancy was followed; and C. Whether the Claimants are intitled to the reliefs sought. 1. The court discerned that the issues for determination are as follows- 2. Whether the Respondent had valid reasons for terminating the Claimants on grounds of redundancy; 3. Whether due process of redundancy was followed; 4. Whether the 4th respondent was discriminated against on account of being on maternity leave. 5. Whether the Claimants are entitled to the reliefs sought. Whether the Respondent had valid reasons for terminating the Claimants on grounds of redundancy; 1. Section 2 (1) of the Act, and the Labour Relations Act define redundancy as- “the loss of employment, occupation, job or career involuntary means through no fault of the employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office and loss of employment.” 2. The reason for the redundancy in notices issued to Labour officer pursuant to section 40 of the Employment was as follows- ‘*NOTIFICATION OF INTENDED REDUNDANCIES* *Kenya Orient Insurance Limited ("the Company") is an underwriter of general insurance business in Kenya. The Company has been operating in Kenya for about 36 years and it currently has 19 branches across the country.* *performance and business efficiency. Following the review, the Company has noted that there is an urgent need to In the last few months the Company has reviewed its operations and structures with a view to improving its reorganize various aspects of its operations in order to achieve the desired results. It is anticipated that the restructuring will involve various changes including the following:* *a) The merger of some of the Company's branches;* *b) The splitting of some departments;* *c) The conversion of branches from sales points to service centres;* *d) The creation of a centralized branch network to oversee service centres across Kenya;* *e) The expansion of the Strategy Function to include various support units; and* *f) The consolidation of various business and administrative units under the Operations Function.* *It is expected that the restructuring will ultimately result in the reduction in the need for staffing in some departments and the elimination or alteration of some of the existing positions and roles within the Company. The foregoing will lead to some employees becoming superfluous and their employment will have to be terminated on account of redundancy. The Company's current projection is that about 45 roles across the Company are likely to be affected.* *In compliance with the law, the Company hereby gives one (1) month notice of the intended redundancies. During the notice period, the Company will comply with its statutory obligations on consultation and selection.* *Notice of the intended redundancy has also been given to all the staff in the company* *As regards the employees who will be selected and eventually declared redundant, the Company will comply with all requirements under the law, staff contracts and the Company's HR Policy and Procedures Manual in relation to payment of terminal dues.* *Should you have any queries on the above, please do not hesitate to contact the undersigned.* *Yours faithfully,* *MUEMA MUINDI* *MANAGING DIRECTOR’*(emphasis given, at page 75 of the Respondent’s trial bundle) The court discerned the reason to be improvement of business performance and efficiency. 1. The notice to the employees was dated 7Th June 2018(see a sample for CW1 at page 5 of the claimant’s trial bundle) and states the same reason as above for the redundancy. The letter referred to email of the MD of 6th February 2018. The email was titled: 'MD- communication on staff Restructuring 2018’. The email attached a letter y MD and among others stated,- Additionally we are in the process of rolling out a new system , the enterprise resource planning (ERP) system to boost operational efficiency. The claimants content that the reason for the redundancy was not valid as the positions from which they were retrenched from were re-advertised t and other people hired and that there ERP system was not operationalised to justify the alleged automation of some of the jobs like that of CW1 who was a clerk for filing documents files and emails. 2. During the hearing , CW1 stated his work could not be automated. He pleaded that he was asked to train a lady who he only identified as Cherop and who he learnt took over his job. This was denied by the respondent. At cross-examination CW1 told the court he was not aware of the automation. He admitted to have received the staff circular dated 7th February 2018. He denied having received the documents at pages 73-74, which were a presentation on the proposed changes. The court noted the letters to the claimants dated 7th February 2018 referred to the email of 6th February 2018 which as analysed above referred to the proposed changes including the ERP system. CW11 was employed in the human resources department and was the custodian of documents. At cross-examination, he told the court that during the redundancy process he was the human resources manager and was heading the human resources department. On being asked about his role in the redundancy process, CW11 told the court that he was aware of the conversation of streamlining functions of the organisation and was involved in the meeting at townhall. He told the court the reason for the redundancies was streamlining resources. He told the court the automated system was not in place at termination. He was in touch with some of the employees in place. On being asked about the automation, whether it was implemented, he told the court he was also a customer. The court concluded the system was implemented. The respondent in submissions asked the court to take judicial notice of financial constraints that the respondent had faced over the years as acknowledged by Justice Rika in Sang & 2 others v Kenya Orient Insurance Limited [2024] KEELRC 2169 (KLR). The case was filed on 29th May 2019, slightly more than a year after the redundancy in March 2018. The case was by staff in place after the redundancy who, among others, had a claim for unpaid wages. As concerns the financial status of the respondent, the court observed: *'There appears to have been a deeper financial problem than the Respondent cared to fully acknowledge, which led to the Respondent not paying its service providers. The Advocates were not being paid. Jengo and Company Advocates were owed Kshs. 18 million, and declined the Respondent’s briefs. The briefs were directed to Okello Kinyanjui, who appear to have engaged in a costly go-slow. The 2nd Claimant told the Court, and was not persuasively contradicted in her evidence, that the Respondent had fallen on hard times, and was unable to pay its service providers.* *117.Garages were not paid. Crystal Motors was owed Kshs. 20 million. Doctors and Investigators went without pay. The declaratory claims filed against the Respondent, were filed because the Respondent had failed to satisfy court decrees.* *118.Company Secretary Marian Kiilu, confirmed on cross-examination that the Respondent was experiencing significant financial constraints and that, ‘’it would not be right, to blame Employees for financial problems…’’ She acknowledged that there was communication between the Respondent and IRA; the Claimants had generated reports for the Managing Director on delayed settlement of claims; there was an analyses of pending claims; the Respondent was advised of the risks posed by non-payment of claims, including cancellation of operational licence; and the reports had recommended settlement of pending claims, including Advocates bills.* *119.The Respondent appears to have done exactly what Marian stated would not be right, by blaming the 1st and 2nd Claimants for the financial and legal failures, of the Respondent.* *120.It is not the responsibility of Employees to correct their Employers, when their Employers turn into market failures*.’ 1. The court is guided to uphold the managerial prerogative of the employer to restructure the business for profit, as held in Josephine M Ndungu &other v Plan International Inc(2019) KEELRC663 (KLR). The Court of Appeal in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] KECA 403 (KLR) pronounced itself sufficiently on the validity of reasons of redundancy. In the decision by Justice Murgor JA, concurring with Justice Maraga JA(as he then was), held as follows: ‘*According to section 40 of the Act, an employer is entitled to terminate the services of an employee on account of redundancy.* *The ILO Convention also specifies that employers can terminate employment for reasons of economic, technological, structural or similar nature.* *In the case of*TOBIAS ONGAYA AUMA & 5 OTHERS VS KENYA AIRWAYS [2007] eKLR*this Court stated,* “Further, it is not the role of any tribunal to prevent an employer from restructuring or adopting modern technology so long as it observes all relevant regulations”. *In* G.N. HALE & SONS LIMITED VS WELLINGTON CATERERS (supra) *the Court* *of Appeal took the view that a worker does not have the right to continue employment if the business can run more efficiently without him. As long as the employer genuinely believed that there was a redundancy situation, any dismissal was justified, and it was not for the court or the union to substitute their business judgment.’’* The Judge further stated on valid of reason for termination….*’Given the acute financial predicament in which the appellant found itself and the fact of the eliminated roles and positions in the company following the restructuring exercise, I find that it was indeed justifiable for the appellant to have declared these positions redundant*.’ The respondent’s witness was cross-examined on the financial statement and confirmed that while the main company made a profit, its subsidiary made a loss; thus, the consolidated statement indicated a loss. In 2018, the company made a profit of KShs 55 million and in 2019 KShs 15.2m. Previoulsy in 2014 and 2015 the company was running on losses. The court finds that the mere fact of profit following losses does not mean the company is in good health to sustain wages. The court took judicial notice of the financial constraints facing the company barely a year later as held by Justice Rika in Sang & 2 others v Kenya Orient Insurance Limited [2024] KEELRC 2169 (KLR)(supra). 1. The claimants further faulted the validity of the reason for redundancy, stating that their positions were re-advertised; CW1 case was a lady by name Cherop, who replaced her, and others stated junior persons they were working with replaced them. The claimants prosecuted their cases, so the court must consider each case individually.CW1 alleged he was asked to train a lady whom he only identified as Cherop and who took over his position after retrenchment . he denied the position was automated. I aleradt held that there was prove of the automation vide the ERP system. CW1 had no evidence of having been directed by the bosses to train the said Cherop. He had no evidence of his job description or that of the said Cherop. When asked to confirm that he was briefed on the ERP system at the Town Hall meeting on 24th February 2018, CW1 stated that he attended the meeting and was just told the company was retrenching. I find the CW1 did not prove on the balance of probabilities that his position was taken over by the alleged lady, whom he could not even disclose at least 2 of her names. 2. CW2 told the court that there were 7 in her department and that she was the only one retrenched. She told the court that the respondent told her she required a CPAK qualification, but she had master's. At cross-examination, CW2 told the court she had CPA2 at the time. She did not produce her qualifications in court. She had pleaded that she was replaced by a junior officer named Lawrence. She did not have the evidence before the court. She told the court that she was not able to obtain Lawrence's qualifications, as that was personal. He who alleges proves. The allegations failed. 3. CW3 confirmed that she had held the role of assistant branch manager, that the role was abolished, and that 2 new positions of portfolio manager were created. She confirmed that the new positions required 12 years' experience and an insurance diploma, which she did not possess. She told the court that her peer, Beatrice, was appointed portfolio manager, and that she felt Beatrice was less qualified. She confirmed she was given the chance. She told the court that she had done 3 years as a middle-level manager and had cumulated 12 years. I find that the allegations do not concern the abolished office but a subsequent appointment, thus the allegation of having been replaced by the said Beatrice was not true. 4. CW4 told the court she was the assistant manager in indemnity, and at the time of redundancy she was called from maternity to pick up the redundancy notice. She did not attend the consultation meeting. She admitted her position was abolished. She said there was no time to consult, as she was only called to pick up the notice from maternity. I find the foregoing does not impeach the validity of the reason but lack of procedural fairness, which I will come back to. 5. CW5 told the court that there were 6 in the department, only 2 were terminated, and the selection criteria were not explained. She said she was the 3rd to join. During the cross-examination, the claimant admitted that the redundancy process was explained. The respondent, in its defence, stated that, on evaluating its needs, it found it needed only 5 staff in the department, not 6. RW1 Killu stated that CW5 was selected using an assessment tool to assess overall performance, and he had the lowest score relative to his other 5 colleagues. The court finds that the decision to reduce numbers is within management's prerogative. CW5's claim is disallowed. 6. CW6 stated that she was a relationship officer and that 2 people were left after the redundancy. She denied the position was abolished and stated that 2 positions were advertised thereafter for unit manager, which she stated was similar to the position she held. She told the court that her position was advertised as sales associate agency (page 150 of the claimant's trial bundle). She confirmed that no person replaced her as a relationship manager. She confirmed that her letter of appointment did not indicate she was an independent contractor, as was the case with the unit manager position. She also confirmed that the documents did not indicate that the unit manager was employed by the respondent. At re-examination, CW6 contended that retainer is salary and that her contract was the same as the unit manager. The court found that there was a material difference between the job held by CW6 and the new position of unit manager, being an independent contractor. I found no merit in claim by CW6. 7. CW7, who denied her position was abolished, stated that a person called Emma was engaged as an underwriting person. CW7 told the court that they had a boss, a senior administration officer. That they had 2 assistants and she was the only one declared redundant. During cross-examination, CW7 confirmed that the 2 assistants did not hold the same position as her. She told the court Emma had updated her LinkedIn profile to the same position she held.CW7 did not produce her Job description to prove Emma took her position. Her defence was that she did not produce her JD due to lapse of time. He who alleges proves. The claim is disallowed. 8. CW8 (Mwarari) was an underwriting assistant. She told the court that the position was declared redundant and, after 1 year, advertised on 21st March 2019. Indeed, 12 positions for underwriting assistants were advertised. She confirmed she never applied. The court finds that business demand changes over time. 1 year is a long time to challenge the validity of the previous abolition of the office. The claim is disallowed. 9. CW9(Nathan Kipyos) told the court that he was a claims analyst. That 2 positions of claims executive and claims associate were advertised and were the same as his position. he also said in his department only 2 people were declared redundant and he was not the junior most. On being asked for evidence that the positions were the same, he said he knows as he is a claims analyst. The court found that it was uncontested that the position held by CW9, assistant claims executive, was abolished. There was no evidence before the court to find the position was the same as that advertised. The claim fails. 10. CW10 was employed as an Acclaims senior executive. He stated that the position of claims executive was advertised after one year and that he was not given a chance. He admitted that he was the only Acclaims senior executive and that only the position of claims executive was advertised. As indicated earlier, 1 year is a long time for a business, and employment and positions are as per the demands of the organisation at the time. The claim fails. 11. CW11 was the Human Resources Manager. His grievance was that he was the most senior person in the department and was replaced by someone with fewer qualifications, and that, as long as there were employees, the HR role remained relevant. At cross-examination, he confirmed the reason for redundancy as streamlining the business, which he said meant redundancies. He confirmed he did not have evidence that the assistant GM, who was assigned the HR role, had no HR qualifications. The Respondent (RW1) stated that the position of Human Resources Manager was abolished and the duties of the position were redistributed to a senior role of head of strategy and HR. I find no fault with this as a business decision. The claim by CW11 fails. 12. In the upshot, I find the reason for termination based on redundancy was proved as true on a balance of probabilities. Whether due process of redundancy was followed; 1. The procedure for redundancy is as stated in section 40 of the Employment Act to wit- 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. The claimants challenged the procedural fairness for reason of lack of selection criteria, replacement immediately by junior workers or less qualified persons and with respect to the 4th claimant on account of lack of consultation on account of having been on maternity leave and thus did not attend the town hall meeting . I have found that the issue of selection was addressed satisfactory as analysed for each of the claimant. The claimants had no issues with the notice issued pursuant to section 40 of the Act and indeed no issue of compliance with the same . The only exception was the 4th claimant, who it was not disputed was on maternity leave at the time the consultation meeting was held with other employees. She was not consulted. 2. In Cargill Kenya Limited v Mwaka & 3 others [2021] KECA 115 (KLR), the Court of Appeal held consultation was mandatory in redundancy process as follows- ‘*While the requirement of consultation is not expressly provided in section 40 of the*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*, this requirement is implied, as the main reason and rationale for giving the notices in section 40(1)(a) and (b) to the unions and employees of an impending redundancy . In this respect we wholly adopt the reasoning of Maraga J.A. (as he then was) in*[*Kenya Airways limited and Aviation & Allied Workers Union Kenya & 3 others*](https://new.kenyalaw.org/akn/ke/judgment/keca/2014/404)*(supra), where the learned judge held as follows:“49…Section 40(1) of our*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*does not expressly state the purpose of the notice. Although it also does not expressly provide for consultation between the employer and the employees or their trade unions before the final decision on redundancy is made, on my part I find the requirement of consultation provided for in our law and implicit in the*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*itself.50. By dint of article2(6) of the Constitution, the treaties and conventions ratified by Kenya are now part of the law of Kenya. The Kenya Constitution, 2010 was promulgated on 27th August, 2010. Before then Kenya was a dualist state, which, like other dualist states, domesticated the treaties or conventions it ratified by legislation. By virtue of the provisions of this Article, however, the treaties or conventions which Kenya had ratified before that date, whether domesticated or not, automatically became part of the law of Kenya. The process of ratification of the treaties Kenya has entered and those it enters into after the enactment and entry into force of the Ratification of Treaties Act, 2012 is now through legislation.51. Kenya is a State party to the International Labour Organization (ILO), which it joined in 1964 and is bound by the ILO conventions. Article 13 of Recommendation No. 166 of the ILO Convention No. 158-Termination of Employment Convention, 1982-requires consultation between the employers on the one hand and the employees or their representatives on the other before termination of employment under redundancy. It reads:“1.When the employer contemplates terminations for reasons of an economic, technological, structural or similar nature, the employer shall:a.provide the workers' representatives concerned in good time with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out;b.give, in accordance with national law and practice, the workers' representatives concerned, as early as possible, an opportunity for consultation on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.”* *35We can only add that in interpreting statutes, the courtshave the function of filling in the textual detail by implication, which arises either because it is directly suggested by the words expressed, or because they are indirectly suggested by rules or principles of law which are not excluded by the express wording of a statute. See in this regard the text by F. Bennion: Bennion on Statutory Interpretation, 5th Edition, at sections 172 to 174. Having regardto the legislative intention of the provisions of section 40 of the*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*, the international law and decided cases, it is our finding that consultations on an intended redundancy between the employer and the relevant unions, labour officials and employees is implied by section 40(1)(a) and (b) of the*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*.* *36Furthermore, consultation is also now specifically required by article47 of the Constitution and the*[*Fair Administrative Action Act*](https://new.kenyalaw.org/akn/ke/act/2015/4)*. Article 47 and section 4(3) of the*[*Fair Administrative Action Act*](https://new.kenyalaw.org/akn/ke/act/2015/4)*provide that where an administrative action is likely to adversely affect the rights or fundamental freedoms of any person, the administrator shall give the person affected by the decision-(a)prior and adequate notice of the nature and reasons for the proposed administrative action;(b)an opportunity to be heard and to make representations in that regard;(c)notice of a right to a review or internal appeal against an administrative decision, where applicable;(d)a statement of reasons pursuant to section 6;(e)notice of the right to legal representation, where applicable;(f)notice of the right to cross-examine or where applicable; or(g)information, materials and evidence to be relied upon in making the decision or taking the administrative action.* *37An administrative action is defined under the Act to include any act, omission or decision of any person, body or authority that affects the legal rights or interests of any person to whom such action relates. Employers fall within the category of persons whose action, omission or decision affects the legal rights or interests of employees, and more so the redundancy by the Appellant in the present appeal is not contested. The Appellant was therefore also bound by the provisions on consultation required by Article 47 and section 4(3) of the*[*Fair Administrative Action Act*](https://new.kenyalaw.org/akn/ke/act/2015/4) *38The nature and content of the consultations required to be undertaken in a redundancy process was explained by Maraga JA in Kenya Airways limited and Aviation & Allied Workers Union Kenya & 3 others (supra):“52. The purpose of the notice under section40(1) (a) and (b) of the*[*Employment Act*](https://new.kenyalaw.org/akn/ke/act/2007/11)*, as is also provided for in the said ILO Convention No. 158-Termination of Employment Convention, 1982, is to give the parties an opportunity to consider “measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse effects of any terminations on the workers concerned such as finding alternative employment.”The consultations are therefore meant to cause the parties to discuss and negotiate a way out of the intended redundancy, if possible, or the best way of implementing it if it is unavoidable. This means that if parties put their heads together, chances are that they could avert or at least minimize the terminations resulting from the employer’s proposed redundancy. If redundancy is inevitable, measures should to be taken to ensure that as little hardship as possible is caused to the affected employees”* *40We are likewise persuaded by the decision of the*[*Employment Appeals Tribunal in Williams vs Compare Maxam Ltd*](https://app.croneri.co.uk/law-and-guidance/case-reports/williams-v-compair-maxam-limited-1982-irlr-83-eat)*(1982) IRLR 83 as follows:“There is a generally accepted view in industrial relations that, in cases where the employees are represented by an independent union recognised by the employer, reasonable employers will seek to act in accordance with the following principles:1.The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.2.The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.3.Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.4.The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.5.The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment.”(Long citation deemed necessary)* . 1. A perusal of the documents by the respondent shows that there is no evidence presented of any consultations undertaken in the manner with CW4. The court, on perusal of the termination notices issued to the claimants, found that the claiamnst were paid dues as provided for under section 40 of the Employment Act and, in any case, that this is not in dispute. The employer is held to have complied with procedural fairness for all the claimants save for the 4th claimant on account of lack of consultation. Whether the 4th respondent was discriminated against on account of being on maternity leave. 1. The 4th claimant stated she was called to pick up the notice to the employee. The respondent submitted that the 4th claimant consented to signing the notice of redundancy. The court has already held that the consultation was mandatory, as in the Cargill case. Discrimination is defined under section 5 of the Employment Act as follows – ‘*5. Discrimination in employment* *(1)It shall be the duty of the Cabinet Secretary, labour officers and the Employment and Labour Relations Court—(a)to promote equality of opportunity in employment in order to eliminate discrimination in employment; and(b)to promote and guarantee equality of opportunity for a person who, is a migrant worker or a member of the family of the migrant worker, lawfully within Kenya.(2)An employer shall promote equal opportunity in employment and strive to eliminate discrimination in any employment policy or practice.(3)No employer shall discriminate directly or indirectly, against an employee or prospective employee or harass an employee or prospective employee—(a)on grounds of race, colour, sex, language, religion, political or other opinion, nationality, ethnic or social origin, disability, pregnancy, marital status or HIV status;(b)in respect of recruitment, training, promotion, terms and conditions of employment, termination of employment or other matters arising out of the employment.(4)It is not discrimination to—(a)take affirmative action measurers consistent with the promotion of equality or the elimination of discrimination in the workplace;(b)distinguish, exclude or prefer any person on the basis of an inherent requirement of a job;(c)employ a citizen in accordance with the National employment policy; or(d)restrict access to limited categories of employment where it is necessary in the interest of state security.(5)An employer shall pay his employees equal remuneration for work of equal value.’* CW4 relied on *S*ection 46 of the Employment Act, which states as follows: ‘46. Reasons for termination or discipline The following do not constitute fair reasons for dismissal or for the imposition of a disciplinary penalty—(a)a female employee's pregnancy, or any reason connected with her pregnancy;’ I find the clause is not relevant in the instant case as the reason for termination was not on the basis of disciplinary or the pregnancy. The court can only fault the employer for failing to treat the claimant, who was on maternity leave, like all other employees, by not calling her to attend the meeting at Town Hall for consultation on the redundancy. The respondent stated that its redundancy policy expressly states staff on maternity are not excluded from redundancy. The respondent stated that excluding her from the redundancy on account of maternity would have amounted to differential treatment as held in Gichuki v Tetra Pak Kenya Limited. 1. It is my finding that the exclusion of the 4th claimant from the redundancy consultation on account of being on maternity leave amounted to direct discrimination. The 4th claimant was entitled to consultation like all other employees. The claimant asked for an award of Kshs. 3 million. The court finds that compensation is never intended to punish an employer but to vindicate employees' rights. The reason for the redundancy was justified by the abolition of the office. Each case is decided on its own merits. The violation was not so gross as to attract a hefty award of Kshs. 3 million. I award the claimant the equivalent of 3 months' salary for the procedural unfairness, which amounts to discrimination, thus gross salary Ksh. 263,309.40 x 3, award of Kshs. 789,928.20. Whether the Claimants are entitled to the reliefs sought. 1. The court dismissed all the claims, save that the 4th claimant who was awarded Kshs. 789,928.20 as compensation for discrimination arising from the lack of invitations to consultation on the redundancy. 2. In the upshot, all claims failed save for the 4th Claimant. Judgment is entered for the 4th Claimant against the Respondent as compensation on account of discrimination for the sum of Kshs. 789,928.20. The 4th Claimant is awarded costs and interest from date of judgment. 3. 30 days stay is granted. 4. It is so Ordered. DATED, SIGNED, AND DELIVERED VIRTUALLY AT NAIROBI THIS 20TH DAY OF AUGUST 2026. JEMIMAH KELI, JUDGE. IN THE PRESENCE OF: Court Assistant: Otieno claimants -Ms Kemboi h/b Wachira Respondent: Njoroge h/b Deya