https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1449

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **AT MOMBASA** *(Before Hon. Lady Justice Monica Mbarũ)* **CAUSE NO. E105 OF 2024** **HARRIENT HUGULU SHIKANGA CLAIMANT** ***VERSUS*** **KENVEST HOSPITALITY KENYA LIMITED RESPONDENT** **JUDGMENT** Both parties attended and agreed to proceed with written submissions pursuant to Rule 59 of the Employment and Labour Relations Court (Procedure) Rules. The sole question is whether the redundancy process was lawful. **CLAIM** The respondent employed the claimant as a human resources manager on 4 April 2023. Her salary was Ksh. 90,000 per month. The claim is that, on several occasions, the claimant, as the human resource manager, raised concerns with the respondent regarding employees' conditions and terms of employment. She proceeded on 10 days leave to resume on 11 July 2024, only to be issued with notice terminating her employment. The reason given was redundancy, but it was unlawful and without due process. The claim is that the termination of employment was without a fair or valid reason and without payment of terminal dues. The claimant claimed the following: 1. Salary for July 2024 Ksh. 90,000. 2. Notice pay Ksh. 90,000. 3. Payment in lieu of redundancy notice Ksh. 90,000. 4. 2 accrued leave days Ksh. 60,000. 5. Severance pay for 2 years, Ksh. 45,000. 6. 12 months' compensation for wrongful and unfair termination of employment, Ksh. 1,080,000. 7. Costs of the suit. **Response** In response, the respondent denied his claims and stated that the claimant was on a 3-month probationary contract from 5 April 2023 to 3 July 2023, and her appointment was from 4 July 2023. The claimant was the human resources manager for Lalagalu and Boxo in Diani, with no additional duties. Work was for 6 days with a rest day each week. The claimant was unlawfully declared redundant. It was done procedurally and lawfully on the grounds that the provisions of section 40 of the Employment Act (the Act) were followed. Given the economic challenges, the respondent needed to stay afloat and chose to outsource the human resources function to reduce costs. A hearing and consultation were undertaken during the redundancy process to adopt a proper criterion for selection for redundancy and to explore alternatives to redundancy. However, the claimant was the only person holding the position of human resources manager, and no other employee held the same managerial position. There was no department with the title in the establishment. There was no option to consider. The position was abolished. Notice issued in accordance with section 40 of the Act. The claimant was paid her salary up to July 2024, severance pay, service charge, one month's notice pay, and all pending leave days at KSh. 206,157 less statutory deductions. The claimant has since refused to collect her dues plus the Certificate of Service. The respondent was deducting and remitting statutory dues, and the service charge claim is not due; the claims should be dismissed with costs. There is no work record for the respondent's response as the employer. The claimant submitted that she was unlawfully and unfairly declared redundant by the respondent immediately upon her return from leave. According to the claimant, she repeatedly raised concerns with the respondent’s Director regarding alleged breaches of employees’ rights to fair labour practices and verbal dismissals by the respondent’s General Manager. She claims that after taking 10 days’ leave, she returned to work on 11 July 2024, only to be served with a redundancy letter dated the same day, without any prior consultation or adherence to due process. The claimant maintains that her employment status is uncontested and references her appointment and confirmation letters dated 21 March 2023 and 18 July 2023, respectively. The claimant submitted that redundancy is defined under Section 2 of the Employment Act (the Act) and as outlined in **Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR.** The Court held that for an employer to justify termination on grounds of redundancy, it must prove the reasons for termination, demonstrate that those reasons are valid and fair based on operational requirements, and show that the termination was conducted in accordance with fair procedures. The Court further stated that redundancy is lawful only when the employee's services have genuinely become superfluous or the office has genuinely been abolished. The claimant submitted that the respondent failed to follow the mandatory procedure set out in Section 40 of the Act. She asserts that she was declared redundant immediately upon returning from leave, without prior personal notice, consultation, or engagement. Although the respondent issued a letter to the County Labour Officer titled “Notice of Intention to Declare Redundancy,” the letter was dated 11 July 2024 and served upon the Labour Officer on 15 July 2024, after the redundancy had already been carried out. The claimant, therefore, argues that the notice to the Labour Officer was defective, superficial, and incapable of rectifying the flawed process. The claimant further submits that the respondent merely alleged that it intended to conduct consultations but produced no evidence of consultations, discussions, minutes, restructuring plans, or financial records demonstrating operational necessity. She contends that the respondent’s assertion that she occupied the only available position is not a defence, since the employer still must prove fairness and necessity. She also argues that any payments allegedly made after the commencement of the suit could not sanitise an unlawful redundancy process. The claimant, therefore, asserts that the respondent acted maliciously and in bad faith by dismissing her under the false pretence of redundancy. She argues that the process constituted unfair dismissal and prays for salary for July 2024; one month’s notice pay; pay in lieu of notice; leave entitlement; severance pay; compensation equivalent to 12 months’ salary for unfair dismissal; a certificate of service; costs; and interest. In conclusion, the claimant asserts that redundancy must be both substantively justified and procedurally fair, and that Section 40 of the Employment Act is expressed in mandatory terms. She contends that failure to follow the statutory procedure rendered the redundancy unlawful and calls on the Court to find that the respondent’s actions were illegal and unfair. The respondent submitted that the claimant was lawfully declared redundant following a genuine operational restructuring prompted by economic challenges affecting the business. The respondent states that the claimant was employed as a Human Resource Manager from 5 April 2023, initially on probation, and was confirmed on 4 July 2023, at a monthly salary of Kshs. 90,000. The respondent made a strategic commercial decision to abolish the Human Resource Manager position and to outsource human resources functions on an as-needed basis as a more cost-effective alternative. The respondent further states that the claimant was the sole employee in that role and, therefore, no comparative selection criteria arose. The respondent maintains that the redundancy process was lawful and procedurally fair. It asserts that the claimant was informed of the reasons for redundancy and received a redundancy letter dated 11 July 2024, requiring her to complete the handover by 31 July 2024, after which her dues would be paid. The respondent further states that the letter was copied to the County Labour Officer in accordance with Section 40 of the Act. The respondent affirmed the redundancy's lawful basis and advised the claimant to collect her dues and the certificate of service. The respondent submitted that it subsequently processed and paid the claimant’s terminal dues, amounting to a gross sum of Kshs. 206,157 and a net sum of Kshs. 146,341 after statutory deductions. The respondent states that the payments included; 1. salary up to the last working day, 2. severance pay, 3. accrued leave, 4. service charge dues, and 5. one month’s salary in lieu of notice. This was recognising that adequate notice had not been issued. The respondent submitted that the claimant’s certificate of service was ready for collection, but the claimant declined or failed to collect it. The respondent contends that the only remaining issue after the parties reached a consent on 18 March 2026 was whether the redundancy was unlawful or unfair. It asserts that the claimant failed to prove that the redundancy was retaliatory or motivated by her alleged complaints about the treatment of employees and verbal dismissals. The claimant produced no correspondence, reports, internal communication, or witness testimony showing that she had raised such complaints or that the redundancy was linked to any protected activity. The respondent therefore relies on Sections 107 and 108 of the Evidence Act and submits that the burden of proof rested upon the claimant to substantiate those allegations. On the legality of the redundancy, the respondent submitted that the operational restructuring constituted a valid and lawful basis for redundancy and that the reasons were clearly explained in the letters issued to the claimant and the County Labour Officer. The respondent argues that Section 40 of the Act was substantially complied with because written notice was issued to both the claimant and the Labour Officer, and any procedural deficiency was cured through payment of one month’s salary in lieu of notice. The respondent further submits that the claimant did not demonstrate any prejudice arising from the timing of the Labour Officer’s notification. The respondent further contends that the redundancy was due to genuine operational needs rather than victimisation, noting that the claimant did not dispute being the sole Human Resources employee and did not demonstrate that the position persisted beyond her departure or that another employee was recruited to replace her. In **Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 403 (KLR),** the Court of Appeal held that as long as the employer genuinely believed that a redundancy situation existed, the court could not substitute its own business decision for that of the employer, and that Section 40 of the Act does not impose a mandatory requirement for pre-redundancy consultation beyond the obligations expressly provided in the statute. The Court further held that the court's role is limited to enforcing obligations imposed by statute or agreed upon by the parties and that courts should not imply obligations not contained in the Act or the employment contract. The respondent further argues that the requirement for selection criteria under Section 40(1) (c) of the Act was not applicable because the claimant held a single position with no comparable employees. It also indicates that the claimant had been in the role for only about one year before the restructuring decision was made. The respondent asserts that the claimant’s dues were fully paid, including one month’s salary in lieu of notice, accrued leave, salary for the days worked in July 2024, severance pay, and service charge dues. It also states that the claimant was not entitled to service pay because she was an NSSF member. The respondent contends that the redundancy resulted from a genuine commercial restructuring and that both substantive and procedural requirements under Section 40 of the Employment Act were met. It further asserts that even if any procedural fault existed, it was rectified through the payment of all statutory dues, including notice pay and severance pay. The respondent therefore requests the Court to dismiss the claimant’s suit with costs. **Determination** As identified by the parties, the single issue for determination is whether the redundancy process was lawful. Under section 40 of the Act, the employer is allowed the right to terminate employment upon a declaration of redundancy. The parameters for such rights are hence defined under the Act. Section 40(a) requires the employer first to issue a general notice to all employees, then issue a personal notice to the affected employee. The notices should include the reasons for the intended redundancy. 1. ***An employer shall not terminate a contract of service on account of redundancy unless the employer complies with the following conditions—*** 2. ***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 reasons for, and the extent of, the intended redundancy not less than a month before the intended date of termination on account of redundancy;*** The rationale for the general notice is to bring the intended redundancy to the employees' attention. The second notice to the employee is to inform her that her employment has been terminated due to redundancy. In [**Africa Nazarene University v David Mutevu & 103 others**](https://new.kenyalaw.org/akn/ke/judgment/keca/2017/381)**(2017) eKLR,** the court held that whereas the initial notice should be issued to all employees, the affected employee should receive personal notice or be paid in lieu thereof. In [**Cargill Kenya Limited v Mwaka & 3 others [2021] KECA 115 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keca/2021/115/eng%402021-10-22)**,** the court analysed the notices due under section 40(a) and (f) and held that whereas under section 40(a) of the Act a notice should be issued, the employer has the option to pay in lieu of notice due under resection 40(f) of the Act. As analysed above, the respondent filed a response without any work record. The claimant filed the redundancy notice dated 11 July 2024. This is a notice to the Labour officer as required under section 40(b) of the Act. The reason given is that the human resource function had been outsourced. The extent of the impact is not gone into. The consultations that have gone into it are not addressed. The claimant also filed a notice to equal date, 11 July 2024, a personal notice terminating her employment on the grounds of redundancy. Whereas the employer has the right to terminate employment following a redundancy, the due process of section 40 must be adhered to, as otherwise, under section 45(2) of the Act, without the due process, the same is unlawful, as held in **Aviation & Allied Workers Union Kenya & 3 Others v Kenya Airways Ltd & 3 Others [2015] eKLR.** The employer is given a wide latitude. Demonstrate that the redundancy and termination of employment were necessary. The subject employee has been issued the necessary notices and paid terminal dues. It thus becomes an unlawful and unfair termination of employment when the employer fails to adhere to the provisions of section 40 and section 45(2) of the Act, resulting in a lapse in procedural fairness in the redundancy. In [**Barclays Bank of Kenya Limited v Banking Insurance & Finance Union [2026] KECA 851 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keca/2026/851/eng%402026-04-30) and [**Abas Omar v Ahzab Academy [2017] KEELRC 1907 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1907/eng%402017-01-27)**,** the mandatory provisions of section 45(2), which require that where employment is terminated due to operational reasons, the employer must adhere to the procedural fairness, are addressed at length. The respondent's assertions that consultations led to a decision to outsource the human resources’ function are unsupported by evidence. Where such consultations were held, the records to support such assertions are denied to the court. The court finds there was an unfair termination of employment. Regarding the remedies sought, at the end of employment, the terminal dues were tabulated, including the following: 1. Pay for July 2024. 2. Severance pay. 3. One month's notice pay. 4. Accrued leave days. A total of Ksh. 206,157 was made available to the claimant. She has, however, failed to attend and collect, including the Certificate of Service. Under section 45(5) of the Act, when addressing the procedural fairness measures taken by the employer and assessing the remedies sought, the court must take into account the employer's efforts to settle the matter. In this regard, save for the lapse in due process, the respondent, as the employer, has made an effort to settle the terminal dues. On finding an unfair termination of employment, the court awarded one month's salary as compensation. The sum of Ksh. 90,000 is payable. The claimant shall collect her term-termination dues provided by the employer and undertake the clearance for the issuance of the Certificate of Service. **Accordingly, the court finds that there was an unfair termination of employment, with an award of one month's compensation at Ksh. 90,000. The claimant shall attend the shop floor and collect the tabulated terminal dues. Each party is to meet its costs.** **Delivered in open court this 28th day of May 2026.** **M. MBARŨ** **JUDGE** **In the presence of:** Court Assistants: Catherine, Kemboi and Omar ……………………………………………… and …………………………………..…………..