LEGAL ALERT || Notice of intended redundancy in Kenya

Introduction

Our Firm Munyao Muthama & Kashindi I MMK ( Irene Kashindi, FCIArb and Faith Wangong’u) acted for one of the parties in the case Onyango v Care International Somalia & another [2025] KEELRC 3458 (KLR), a recent decision by the Employment and Labour Relations Court that revisits one of the most commonly misunderstood aspects of redundancy law in Kenya, namely what amounts to a proper notice of intended redundancy, when it should issue, and whether it can be replaced by payment in lieu of notice.

Background to the Dispute and Court Findings

In this case, the Court accepted that there was a genuine operational reason for the redundancy arising from a Somali Government directive requiring relocation of operations to Somalia, and thus found that the redundancy was substantively justified. However, the Court still found the process procedurally unfair because the employee and Labour Officer had not been given a proper notice of intended redundancy and to allow for meaningful consultations before the redundancy decision was made.

The Court emphasised that the notice under section 40(1)(a) and (b) of the Employment Act is not a final termination notice. Rather, it is a notice of intention to declare redundancy. It should therefore issue before the redundancy decision is finalised and before the employee exits employment. Its purpose is to create room for consultations, consideration of alternatives and possible mitigation measures before a final decision is taken. In this case, the employee was informed of the redundancy decision and exited employment on the same day, with notice pay being included as part of the terminal dues. There was no separate prior notice of intended redundancy for a period of less than one month as required by section 40 of the Employment Act and no real consultations were conducted before the employment relationship came to an end. It is this sequence of events that led the Court to conclude that, notwithstanding the payment of notice in lieu, the statutory requirement for a prior notice of intended redundancy had not been satisfied.

In reaching this conclusion, the Court cited a number of important authorities. In Barclays Bank of Kenya Ltd & another v. Gladys Muthoni & 20 others [2018] eKLR, the Court of Appeal recognised consultation as an important component of fair labour practice in redundancy situations. In Cargill Kenya Limited v Mwaka & 3 others [2021] KECA 115 (KLR) the Court of Appeal observed that the purpose of the notice is to give parties an opportunity to consider measures to avert or minimise termination and mitigate its effects. Similarly, in The German School Society v Helga Ohany, the Court stated that notice to the employee, union and Labour Officer opens up the door for a consultative process .

In practice, parties sometimes interpret decisions such as Cargill Kenya Ltd v Mwaka & 3 others (see above) and Africa Nazarene University v David Mutevu & 103 others [2017] KECA 381 (KLR) others differently on the requirements regarding notices under section 40 of the Employment Act. The more recent and predominant approach in Kenyan jurisprudence is, however, that the notice of intended redundancy of not less than a month serves a substantive consultative purpose and is not merely a technical requirement that can automatically be replaced by payment in lieu of notice. This is also why the wording of section 40 is contemplative. It refers to an intended redundancy and an intended date of termination, which suggests that the notice should issue before the redundancy decision is finalised so as to allow room for consultation, alternatives and possible mitigation measures.

This position is also consistent with international labour standards. Articles 13 and 14 of International Labour Organization Convention contemplating terminations for economic, technological, structural or similar reasons to provide workers representatives with relevant information in good time and to consult on measures to avert or minimise the terminations and their adverse consequences. Recommendation No. 166 further encourages employers to consider alternatives to termination, limit the number of dismissals and mitigate the effects of job losses. Although Kenya has not ratified Convention No. 158, Kenyan courts have increasingly referred to it as persuasive guidance in redundancy disputes because it reflects internationally accepted principles of fairness, consultation and mitigation. Comparable jurisdictions adopt a similar approach. In South Africa, section 189 of the Labour Relations Act requires employers to consult before any final retrenchment decision is taken, and the consultation must be genuine and aimed at reaching consensus.

In the United Kingdom, section 188(1A) of the Trade Union and Labour Relations (Consolidation) Act 1992 provides that consultation must begin in good time and, where 100 or more employees are affected, at least 45 days before the first dismissal takes effect, and in other cases at least 30 days before the first dismissal takes effect.

Key take aways & Conclusion

The predominant view in Kenya therefore remains that a proper notice of intended redundancy should issue before the redundancy decision is finalised, should allow a meaningful consultation period of not less than one month, and cannot ordinarily be paid off . While the final termination notice may be replaced by payment salary in lieu of notice in line with section 40(1)(f) as read with section 36 of the Employment Act as was held in the case of Veronica Mkiwa Mwalwala v Faiza Bhanji t/a Villa Kalista Enterprises [2020] KEELRC 1821 (KLR) , the notice of intended redundancy serves a separate and important purpose of opening the door to consultation before the redundancy decision is implemented. The case of Veronica Mkiwa Mwalwala v Faiza Bhanji t/a Villa Kalista Enterprises [2020] KEELRC 1821 (KLR) is digested as part of Volume 2 of Kashindis’ Digest of Employment Cases.