A Court of Appeal sitting in Nairobi has redefined the scope of termination of employees through redundancy in a landmark judgment rendered by its three-judge bench.
Justices Hannah Okwengu, Omondi Hellen Amolo and Mativo John Mutinga observed that redundancy laws had been misused by employers who acted without due consideration of best practices and the provisions of the International Labour Organisation (ILO).
The three judges ruled that employers will now be required to carry out consultations with employees in order to reach an agreement on the way forward.
The judges acknowledged that consultation was not provided by the Employment Act but was an integral part of international best practices adopted and applied by global organisations.
According to the judgment, a notice of redundancy is sufficient proof that consultations were done. Further, consultations should not be cosmetic in nature where an employer does it for the sake of it.
"Consultation is implicit in the Employment Act under the principle of fair play and gives an opportunity for other avenues to be considered to avert or to minimise the adverse effects of terminations.
"Consultations are meant for the parties to put their heads together and is imperative under Kenyan law, and have to be a reality, not a charade. Opportunity must be given for the stakeholders to consider options where parties keep an open mind to listen to suggestions, consider them properly and then, only then, decide what is to be done," read part of the judgment.
The Court of Appeal noted that in a situation where an employer conducts redundancy with the sole purpose of laying off employees, the same can’t be sanctioned by the justice system because the law was properly followed.
The three justices further added that the concept of consultations is drawn from the ILO Convention on Termination of Employment Convention in which Kenya is a party.
"In essence, consultation is an essential part of the redundancy process and ensures that there is substantive fairness. The employer should ensure that it carries out the process as fair as possible and that all mitigating factors are taken into consideration.
"A reading of the record shows that the respondent was served with a redundancy notice and asked to proceed for a one month leave. The trial court found that the redundancy was unfair and irregular for failure to give adequate notice and thereby not giving consultation a chance," the bench observed.
The Judges also noted that Act 47 of the Constitution of Kenya requires an administrator to give reasons to a person who is adversely affected by the decision.
Therefore, an employer is required to give sufficient reasons to an employee before carrying out any termination failure to which the termination will be termed as unfair.
Further, fair procedures which are guided by the Employment and Labour Laws should be undertaken in order to ensure that the victims of redundancies are not adversely affected.
The Kenya Employment Act, of 2007 is the principal law governing employment in Kenya. It consolidates and amends the previous Employment Act, Cap. 226, and other related laws define redundancy as the process of dismissing employees due to circumstances that are unrelated to their job performance or behaviour.
The Law envisages that redundancy can happen for a variety of reasons, such as a company is downsising or restructuring. This may be due to financial difficulties, changes in the market, or a merger or acquisition.
Job automation due to technological applications may make certain jobs obsolete or when it is more cost-effective to outsource work to another company.
