https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2269

 **REPUBLIC OF KENYA** **IN THE EMPLOYMENT *&* LABOUR RELATIONS** **COURT OF KENYA AT KISUMU** **CAUSE NO. E070 OF 2025** ERRICK OMONDI OONGO.......................................................**CLAIMANT** **VERSUS** MEDS MAISHA KENYA LIMITED..........................………**RESPONDENT** **JUDGMENT** 1. The Claimant instituted this suit via a Memorandum of Claim dated 23rd July 2025 alleging unlawful redundancy. He sought the following reliefs: 2. A declaration that the dismissal or termination of his employment on account of redundancy was unlawful and unfair. 3. An Order directing the Respondent to pay the Claimant twelve months’ salary compensation for unlawful and unfair termination amounting to USD 13,704 4. Interest on (b) above at Court rates from the date of filing suit till payment in full 5. Costs and interests of the suit 6. Any other relief the court deems fit. 7. It is the Claimant’s case that he was employed by the Respondent as Manager, Supply Chain with effect from 1st March 2020 at a monthly salary of USD 1,142. He avers that later on 20th March 2025 at 8.00pm the Respondent invited him via email for a virtual town hall meeting scheduled for the next day at 10.00a.m. At the meeting, it is his contention that the Chief Executive Officer announced an intention to lay off employees on account of loss of USAID funding. Immediately after the meeting, the Claimant states that he was summoned to a meeting with a Human Resource representative and informed that he had been selected for redundancy. After the meeting he was logged out of the Respondent’s work systems and directed to proceed on one month’s garden leave. 8. The Claimant contends that no meaningful consultations were conducted during the garden leave period, that the Respondent failed to disclose the criteria used in selecting employees for redundancy, and that his requests for clarification were ignored. He further asserts that the alleged loss of USAID funding did not constitute a valid reason for redundancy because USAID-funded projects had ended in November 2024 and the Respondent had other funding sources for 2025 such as Children Investment Fund Foundation, Pfizer, Livelihood Impact Fund, Fred Hutch and Gates Foundation. In view of the foregoing the Claimant maintains that the redundancy was substantively and procedurally unfair for want of a valid justification, consultation, transparency in the selection criteria, and due regard to seniority, skill, ability and reliability. 9. In opposition to the suit the Respondent filed a Response to the Memorandum of Claim dated 18th August 2025. It denies that the Claimant was employed as Manager, Supply Chain from 1st March 2020. It states that the Claimant was initially employed on 1st March 2021 as a Distribution, Pharmacy *&* Consignment Supply Chain Senior Associate on a one-year fixed-term contract, was subsequently retained, and was promoted in January 2025 to the position of Manager, Supply Chain at a monthly salary of USD 1,142. According to the Respondent, the Claimant was a member of the Kenya Expansion Team. The Respondent states that on 5th March 2025 its Chief Operations Officer and Country Director (Kenya) met to review the composition of the Kenya Expansion Team and resolved that a reduction in team size was necessary following funding cuts under the USAID Development Innovation Ventures award. It further states that on 20th March 2025 all Kenyan staff were invited to a town hall meeting held on 21st March 2025, during which the Chief Executive Officer explained the organisation’s financial challenges arising from the unexpected termination of a USAID-funded programme that constituted a significant portion of its operational budget. The Respondent maintains that the withdrawal of this funding led to discontinuation of projects, budget cuts, and restructuring measures, including consideration of redundancies, particularly within the Kenya Expansion Team. The Respondent avers that after the town hall meeting the Claimant attended a one-on-one meeting at which he was informed that his position was under consideration for redundancy. It states that the Labour Office was also notified of the intended redundancy. The Respondent contends that the Claimant was then placed on garden leave as an interim administrative measure intended to protect operational and data security while enabling him to participate in the consultation process, during which he remained an employee, continued receiving salary and benefits, including extended health insurance, and had access to management and human resource personnel. The Respondent maintains that it conducted a thirty-day consultation process from 21st March to 20th April 2025. It states that the process began with the individual meeting, included follow-up communication inviting the Claimant to raise questions or proposals, and was intended to explore measures to mitigate or avoid termination and to implement the redundancy in a considerate manner. According to the Respondent, it responded to the Claimant’s concerns regarding company equipment, NSSF, and gratuity, but the Claimant did not meaningfully engage for most of the consultation period. The Respondent further contends that the Claimant was part of the supply chain function serving the Kenyan market, which was entirely phased out following the loss of USAID funding and the resulting restructuring. It asserts that the Claimant was not singled out, but was among several employees in the department affected by the redundancy, and that no employee in the same department or a similar position was retained. The Respondent disputes the Claimant’s assertion that the redundancy lacked substantive justification. It states that the USAID funding was specifically designated for expansion into new regions, including Kisumu, and that the termination of that funding rendered the Claimant’s position financially and operationally unsustainable. It further states that it considered placing members of the Kenya Expansion Team on furlough but concluded that, in the absence of new funding for expansion activities, redundancy was the only viable and sustainable option. The Respondent also avers that anticipated USAID Malaria and HIV contracts for 2025 were withdrawn, further reducing available work and funding in the affected regions. The Respondent denies that alternative donor funding was available to sustain the Claimant’s role, stating that it was not a beneficiary of the funding sources identified by the Claimant, save for limited Pfizer support that had ceased to be relevant by the period in dispute. In view of the foregoing the Respondent maintains that the redundancy was necessitated by genuine financial and operational constraints and that the process complied with all legal requirements, including notification, consultation, objective selection criteria, and payment of all statutory dues. It further states that it extended the Claimant’s health insurance cover until July 2025 and paid him a full salary for April 2025 in addition to the statutory redundancy package. It therefore prays that the claim be dismissed with costs. 10. At the close of hearing parties filed written submissions. Claimant’s Submissions 1. The Claimant identifies the issues for determination as: * 1. Whether his termination on account of redundancy met the threshold of substantive and procedural fairness; and 2. Whether he is entitled to the remedies sought. 2. On the first issue, the Claimant submits that although redundancy is a lawful ground for termination, the Respondent was required to comply strictly with both the substantive and procedural safeguards under section 40 of the Employment Act, 2007. Reliance is placed on **Kenya Airways *v* Aviation *&* Allied Workers Union Kenya *&* 3 others [2014] eKLR**, where the Court of Appeal held that an employer contemplating redundancy must issue a general notice of the intended redundancy to the affected employees or their union, thereby triggering a genuine consultative process. The Claimant concedes that a notice of intended redundancy was issued on 21 March 2025, but submits that the ensuing process was unlawful and unfair because it lacked substantive justification, meaningful consultation, and an objective selection criterion. 3. On consultation, the Claimant argues that the process was superficial and cosmetic. He submits that immediately after being notified of the intended redundancy he was locked out of the Respondent’s email system and required to surrender company property, including his laptop and tablet. He relies on **Mwikali *v* Flame Tree Africa Limited [2025] KEELRC 1809 (KLR)**, where the Court held that asking an employee to hand over company property immediately after issuing a redundancy notice demonstrates that the employer did not genuinely intend to retain the employee during the notice period. The Claimant further relies on **Mbogo *v* Meds Maisha Kenya Limited [2026] KEELRC 1422 (KLR)**, where the Court held that requiring an employee to return company property and denying access to company systems showed that the decision to terminate had already been made and that the alleged consultation was merely a predetermined redundancy process. The Claimant submits that the Respondent conducted no meaningful engagement beyond a casual email inquiring about his welfare and failed to discuss alternatives to redundancy or measures to mitigate its effects. He further relies on **Kenya Airways *v* Aviation *&* Allied Workers Union Kenya *&* 3 others [2014] eKLR**, which adopted the reasoning in **Cammish *v* Parliamentary Service** **[1996] 1 ERNZ 404**, that consultation must be real and not a charade, requiring adequate information, sufficient time, an open mind, and genuine consideration of employee proposals. He also invokes Article 13 of ILO Convention No. 158 and Recommendation No. 166, which requires consultations to commence as early as possible and to focus on avoiding or minimising terminations and exploring suitable alternative employment. 4. On the selection criteria, the Claimant submits that the Respondent applied an opaque, inconsistent, and subjective process. He relies on **Kimathi *v* Ericsson Kenya Limited (Civil Appeal 601 of 2019) [2023] KECA 106 (KLR)**, where the Court of Appeal held that redundancy selection criteria must be fair, objective, transparent, and consistently applied. The Claimant contends that the Respondent’s evidence was contradictory. He highlights that whereas the Respondent claimed that the USAID funding was awarded in 2023 to finance the Kenya Expansion Team, the Claimant had been employed in 2021 before the alleged funding was awarded. He further submits that his name did not appear on the Respondent’s list of Expansion Team members or employees earmarked for redundancy, and that the Respondent admitted during cross-examination that different criteria were applied to different employees and that the criteria were neither discussed with nor disclosed to affected staff. The Claimant therefore asserts that the selection process lacked transparency and consistency and was influenced by subjective considerations. 5. On substantive justification, the Claimant submits that the Respondent failed to prove a genuine operational basis for the redundancy. He asserts that the alleged loss of USAID funding could not justify his redundancy because he was employed before the funding was awarded and he was not part of the alleged Expansion Team funded by USAID. He further contends that the Respondent had other donor funding sources, including the Children Investment Fund Foundation, Pfizer, Livelihood Impact Fund, Fred Hutch, and the Gates Foundation. Moreover, he contends that no evidence was produced of the actual funding award, the relevant budgets, audited financial statements, a staff rationalisation programme, or a restructuring plan showing that his role had become redundant. He therefore submits that the Respondent failed to establish a valid substantive justification for declaring his position redundant. 6. On his entitlement to the remedies sought, the Claimant submits that, having demonstrated that the redundancy was both substantively and procedurally unfair, he is entitled to the reliefs sought. Respondent’s Submissions 1. The Respondent identifies the following issues for determination: * 1. Whether the redundancy was substantively justified; 2. Whether the redundancy was procedurally fair, having regard to section 40 of the Employment Act; 3. Whether the selection of the Claimant for redundancy met the criteria set out in section 40(1)(c) of the Employment Act; 4. Whether the Claimant was paid all dues owing to him on account of the redundancy; and 5. Whether the Claimant is entitled to the reliefs sought. 2. On the first issue, the Respondent submits that redundancy was justified by genuine operational and financial constraints arising from the abrupt termination of its USAID Development Innovation Ventures award, which funded the Claimant’s position, and the withdrawal of anticipated USAID malaria and HIV contracts for 2025. It relies on sections 43(2) and 47(5) of the Employment Act and the Court of Appeal decision in **Kenya Airways Ltd *v* Aviation *&* Allied Workers Union Kenya *&* 3 others [2014] KECA 404 (KLR)**, which held that redundancy is a legitimate ground for termination where based on the employer’s operational requirements and where the employee’s services have become superfluous. The Respondent submits that the funding termination was communicated to all staff during the town hall meeting of 21st March 2025 and was supported by documentary evidence. It further contends that the Claimant’s employment contract expressly contemplated termination upon reduction or withdrawal of donor funding, and that the supply chain function serving the Kenyan market was entirely phased out, with no employee in a similar role retained. The Respondent asserts that it explored alternatives to redundancy, including furlough arrangements, but concluded that redundancy was the only sustainable option given the absence of new funding. It contends that the Claimant’s arguments regarding his original date of employment, his alleged non-membership of the Expansion Team, and the absence of audited financial statements do not negate the genuine funding crisis. It submits that section 43(2) of the Employment Act requires proof of the employer’s genuine belief in the reason for termination rather than proof of financial collapse, and that the redundancy was therefore substantively justified. 3. On whether the redundancy was procedurally fair under section 40 of the Employment Act, the Respondent submits that it complied with section 40(1)(b) of the Employment Act by notifying the Labour Office and the Claimant of the reasons for and extent of the intended redundancy. It states that notices were sent to the relevant Labour Offices, including Kisumu County, more than one month before the effective date of redundancy, and that the Claimant was personally informed during the town hall meeting and a subsequent one-on-one meeting before receiving written redundancy notices. The Respondent distinguishes **Mwikali *v* Flame Tree Africa Limited [2025] KEELRC 1809 (KLR)**, arguing that unlike that case, the Claimant remained on full salary and benefits during the consultation period and continued engaging with the Respondent through alternative communication channels. It also relies on **Mwangi *v* Mpala Research Centre [2024] KEELRC 845 (KLR)** for the proposition that redundancy is lawful where the position is abolished as part of a restructuring process and the labour office is notified. On consultation, the Respondent submits that the thirty-day consultation process was genuine and not cosmetic. It contends that placing the Claimant on paid garden leave, limiting access to company systems, and requiring the return of company property were lawful operational measures necessitated by the donor’s immediate termination directive and were authorised under the employment contract. The Respondent relies on **Waruhiu *v* Directline Assurance Company Ltd [2025] KEELRC 1940 (KLR)**, where the Court held that company laptops and email accounts remain the employer’s property and may be recalled at the employer’s discretion. It asserts that the Employment Act does not prohibit paid garden leave during redundancy consultations and that consultation may occur through any effective communication channel. According to the Respondent, the Claimant remained reachable, retained access to management and human resources, received responses to his concerns, and was invited to submit proposals, but did not meaningfully engage during the remainder of the consultation period. 4. On whether the Claimant’s selection met the requirements of section 40(1)(c) of the Employment Act, the Respondent submits that the selection process complied with section 40(1)(c) because the entire supply chain function serving the Kenyan market was abolished. It relies on **Mengesa *&* another *v* Standard Chartered Bank Kenya Limited [2024] KEELRC 1681 (KLR)**, which held that the “last in, first out” principle is not mandatory where an employer applies an objective criterion. The Respondent argues that there was no surviving pool of comparable employees within the Claimant’s department against whom seniority, skill, ability, and reliability could be assessed, because the entire function was eliminated. It submits that the broader restructuring was documented in management deliberations and that the Claimant failed to identify any comparable employee who was retained while he alone was selected. The Respondent further contends that different departments adopted different cost-saving mechanisms in pursuit of the same organisation-wide objective of reducing employment costs by approximately 15%, and that variation across departments did not render the selection process arbitrary or discriminatory. 5. On the fourth issue the Respondent submits that the Claimant received all statutory redundancy entitlements, including one month’s salary in lieu of notice, severance pay, payment for accrued leave, and a certificate of service. It further states that it extended the Claimant’s medical insurance cover until July 2025 and paid him a full salary for the remainder of April 2025 as a gesture of goodwill. 6. On whether the Claimant is entitled to the reliefs sought, the Respondent maintains that it has discharged its burden under section 47(5) of the Employment Act by proving both substantive justification and procedural fairness. It argues that the Claimant has failed to establish unfair termination and is therefore not entitled to the declarations or compensation sought. The Respondent also submits that **Micheal Omondi Mbogo *v* Meds Maisha Kenya Limited****[2026] KEELRC 1422 (KLR),** is not binding and is factually distinguishable because, unlike in that case, the Claimant remained on full salary and benefits, retained access to management, and was genuinely consulted throughout the redundancy process. The Respondent accordingly prays that the claim be dismissed with costs. Disposition 1. The uncontested facts are that the Claimant was an employee of the Respondent and that his termination took place on account of a stated redundancy process. The Claimant’s surmise is the redundancy process was unfair and unlawful as it did not accord with section 40 of the Employment Act. On its part, the Respondent’s surmise is the redundancy was lawful and proper as it consulted the Claimant and also notified the Labour Officer. The issues distilled by the Court for determination are: * 1. Whether the redundancy was procedurally fair and substantively justified, having regard to section 40 of the Employment Act; 2. Whether the selection of the Claimant for redundancy met the criteria set out in section 40(1)(c) of the Employment Act; 3. Whether the Claimant was paid all dues owing to him on account of the redundancy; and 4. Whether the Claimant is entitled to the reliefs sought. 2. The Court has before it a claim that the Respondent’s funding for the projects was affected by budgetary cuts in USAID funds consequent to a stop order issued by the President of the United States. The Claimant was employed as a Distribution, Pharmacy *&* Consignment Supply Chain Senior Associate before he was promoted to the position of Manager, Supply Chain which is the position from which he was terminated. Evidence led before the Court is that an email was issued on 20th March 2025 at 8.00pm. In the email, the Respondent invited the Claimant to a virtual town hall meeting scheduled for 21st March 2025 at 10.00a.m. It is contended without rebuttal that the Chief Executive Officer of the Respondent announced an intention to lay off some employees of Meds Maisha Kenya Limited on account of the loss of USAID funding. The Claimant testified that immediately after the said meeting he was logged out of the Respondent’s work systems and directed to proceed on one month’s garden leave. He said he was summoned to a meeting with a Human Resource representative and informed that he had been selected for redundancy. 3. The Employment Act has a provision for redundancy in section 40. The section provides that *40. (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 question as to whether the redundancy was procedurally fair and substantively justified, having regard to section 40 of the Employment Act is answered in the negative as there is no evidence the Respondent issued the required notices as enumerated in section 40(1). 2. The law provides that the employee should be notified at least 30 days before the redundancy takes place. See section 40(1)(a). Under section 40(1)(c) the employer is required to make an assessment as to the suitability, in the selection of employees to be declared redundant have 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. In this case, there is no proof the Respondent had a criteria in place for the staff being declared redundant. The Claimant was in a critical role at the Respondent and was let go. He was abruptly disconnected from his workplace as he was removed from the Respondent’s systems and he could not access the systems. He was asked to hand in his laptop, tablet, chargers etc to avoid his March salary from being withheld. In my considered view this was termination of his contract as the employer ensured there was no way the Claimant could reasonably anticipate being recalled to work. The contract was terminated with no regard to the provisions of the law on redundancy. As to whether the selection of the Claimant for redundancy met the criteria set out in section 40(1)(c) of the Employment Act, the Court answers in the negative as there was no consultation in terms of the law nor was there adherence to the terms of redundancy as laid out in section 40(1). 3. As to whether the Claimant was paid all dues owing to him on account of the redundancy, there is proof the Claimant was paid a month’s salary during the period of ‘garden’ leave. The expression is American in origin and has no reference in our laws. Ideally, the Respondent would have paid the terms of redundancy in the Employment Act section 40(1)(e), (f) and (g). The Claimant was entitled to one month salary as notice. The computation by the Respondent contains USD 1,141.99 as payment for notice. There was the severance pay which was paid. A sum of USD 2,855 was paid. The leave pay was indicated as USD 263.54 and this was paid. As such, the Court returns the Respondent paid the Claimant his package in terms of section 40 of the Employment Act. The answer to this issue is in the affirmative. 4. On the question as to whether the Claimant is entitled to the reliefs sought, the only relief the Claimant is entitled to is the unfairness in the declaration of redundancy. The Claimant will recover USD 3,426 being 3 months salary as compensation. He will also have costs of the suit limited to this amount only. Suit allowed only to the extent there is judgment for: 1. USD 3,426 as compensation for the unlawful termination under redundancy 2. Costs strictly limited to the sum in (a) above. 3. Interest on the sum in (a) above at Court rates from the date of judgment until payment in full. It is so ordered. **Dated and delivered at Kisumu this 30th day of July 2026** **Nzioki wa Makau, MCIArb.** **JUDGE**