Executive summary

On 25 September 2025, the Kenyan Employment and Labour Relations Court held (Cause E1054 [2025] KEELRC 2542 (KLR)) that the employer's decision to terminate an employee on account of redundancy was unfair. The court found the employer failed to justify the alleged organizational restructuring that supposedly rendered the employee's position redundant. Furthermore, the redundancy notice did not clearly define the scope of the proposed redundancy.

The court added that although the employer paid severance and other terminal dues, it produced no documentary evidence such as a Board resolution or updated organizational chart to show that the employee's role had genuinely been abolished, and the employer's subsequent request that the employee resume duty further undermined the redundancy justification.

Detailed discussion

Background

The employee was assigned a senior regional human resources (HR) role. While the employee was on an approved sabbatical, the employer initiated a redundancy process, citing organizational restructuring, and eventually issued the employee a termination letter on grounds of redundancy.

The employee challenged the termination, asserting that the employer had not demonstrated any genuine restructuring, had issued a redundancy notice that failed to specify the extent of the proposed redundancy and had acted inconsistently by requesting that the employee resume duty after the redundancy notice period had lapsed.

Issue for determination

A key issue for determination was whether the employee's contract of service was improperly terminated.

Employee's position

The employee argued that the termination based on redundancy was unlawful because the employer had contractually assigned the employee a new role to be held for at least one year yet terminated the contract before this period lapsed without demonstrating that the position had genuinely become redundant. The employee further asserted that the employer failed to honor the contractual framework governing his employment, including the agreed variation of terms, rendering the termination both premature and procedurally defective.

Employer's position

The employer maintained that the redundancy was lawful, arguing that business constraints and an inability to sustain the employee's regional HR role necessitated organizational restructuring. The employer asserted that it had issued proper redundancy notices, attempted consultations and paid all terminal dues, thereby complying with the substantive and procedural requirements for redundancy under the Employment Act.

Court's analysis and determination

The court reiterated that termination on account of redundancy must satisfy both the substantive justification and the procedural safeguards under the Employment Act. The court held that the employer failed to discharge the evidentiary burden of demonstrating a bona fide organizational restructuring because it did not provide evidence of a board resolution approving the restructuring or a new organogram to demonstrate that the restructuring had occurred.

The court held that this evidentiary gap, coupled with the employer's contemporaneous directive requiring the employee to resume duty, negated the assertion that the role had become superfluous. Although the employer had substantially complied with other procedural elements, its combined failure to establish a valid operational reason and to issue a compliant redundancy notice rendered the termination substantively and procedurally unfair. The court awarded the employee 1,600,000 Kenyan shillings (KES1.6m) in damages for unfair termination.

Key takeaways

Based on the court's determination, organizations undergoing restructuring should consider taking the following steps to ensure compliance with redundancy and termination requirements:

• Confirm that any redundancy is supported by clear, documented operational reasons, including evidence of actual organizational change
• Specify clearly the extent of the proposed redundancy in the redundancy notice and issue it in a manner consistent with all other steps taken during the process
• Conduct the redundancy process transparently and consistently, avoiding actions that contradict the claim that a role has become redundant
• Obtain legal advice to ensure that the procedure undertaken complies with the law

Though employers retain managerial discretion to undertake restructuring, this discretion is limited by statutory and procedural safeguards. Redundancy decisions must therefore be grounded in evidence and executed with procedural precision.

Implications

This decision reinforces the necessity for employers to base redundancy decisions on clearly documented operational reasons and to implement termination processes with precision, consistency and transparency.