Court of Appeal Underscores The Importance of Consultation In Redundancy Processes: An Analysis of The Judgement In The German School Society V Helga Ohany

A consolidated appeal arising out of a judgment and decree from the Employment and Labour Relations Court was presented before the Court of Appeal. Central to the consolidated petitions was the question of the appropriate conduct for redundancy. The Employment and Labour Relations Court in determining the dispute stated that the Claimant was unfairly terminated and the Respondent failed to follow the due process of termination on the basis of redundancy as explicitly provided in the Employment Act. The Court of Appeal after intense deliberations upheld the decision made by the trial court and stated that the Appellant unfairly terminated the Respondent and did not follow the required steps before termination. In its judgment, the Court of Appeal placed much emphasis on the aspect of consultations either with the employee, the employee’s trade union or the labour officer after issuing a notice of intention to terminate on account of redundancy. It noted that although the Employment Act does not explicitly provide for consultations as part of the termination procedure on account of redundancy, subject to ratification of International Labour laws, consultations form part of the termination procedure.

A brief background of the matter is that a termination notice on account of redundancy was issued to the Claimant on 11^th March 2015. The Claimant filed a suit in court alleging wrongful and unfair termination by the Respondent. Among other issues presented to the trial court for determination was whether the termination of the claimant on account of redundancy was fair and justified. The Employment and Labour Relations Court held that since no consultations were made either to the claimant or her trade union or labour officer the process of termination was wrongful and irregular for failure to give adequate notice and thereby not giving consultation a chance.

The Respondent being aggrieved with the determination, appealed the trial court’s decision to the Court of Appeal, stating that the trial court erred in fact and in law when making the judgment. The Court of Appeal in its deliberation sought to look at whether the issue of termination of the claimant on account of redundancy was lawful.

The Court of Appeal relied on the definition of the term redundancy as explicitly provided in the Employment Act as” the loss of employment, occupation, job or career by involuntarily means through no fault of the employee involving termination of employment at the initiative of the employer, where the services of an employee are superfluous, and the practices commonly known as abolition of office, job or occupation and loss of employment.”

The Court noted that employers have the prerogative to determine the structures of their businesses and therefore they can make positions redundant. Positions and not employees, become redundant.

Further, the Court of Appeal concurred with the procedure to be followed by an employer before declaring a position redundant. Before a position is declared redundant the following steps ought to be made.

1. Firstly, issue notices to the trade union or labour office 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.
2. Where an employee is not a member of a trade union, the employer notifies the employee personally in writing and the labour officer

• 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;

1. 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;

The Court of Appeal stated that it is worth noting that notice to the employee/trade union/labour officer opens up the door for a consultative process with the key stakeholders. It further stated that after reading the records it shows that the Respondent was served with a redundancy notice and asked to proceed with one month’s 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.

Further, the Court stated that Kenya is a state party to the International Labour Organization and is bound by the ILO conventions which provide for consultation between the employers on the one hand and the employees or their representatives on the other before termination of employment under redundancy. The Learned Judges of the Court of Appeal found no fault in the finding by the trial judge that the termination was unfair for want of the consultations envisaged under the law. The Learned Judges however set aside the sum of Kenya Shillings 5,945,340 awarded in damages by the trial court for unlawful redundancy and instead substituted it with a sum of Kenya Shillings 2,972,670.

In determining what constitutes consultation, the court made reference to the Court of Appeal decision in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others (2014) eKLR where the parameters for the question of consultation was set. The Court of Appeal in the said matter pronounced that;

1. Consultation is implicit (emphasis ours) in the Employment Act under the principle of fair play;
2. Consultation gives an opportunity for other avenues to be considered to avert or to minimize the adverse effects of terminations;
3. Consultations are meant for the parties to put their heads together and is imperative under Kenyan law;
4. Consultations have to be a reality not a charade;
5. Opportunity must be given for the stakeholders to consider;
6. Stakeholders must have and keep an open mind to listen to suggestions, consider them properly and then only then decide what is to be done; and
7. Consultation must not be cosmetic.

In conclusion, the Court of Appeal, regarding the legislative intention of the provisions of the International Law and decided cases, found that consultation on an intended redundancy between the employer and employee is implied by law and should be included in the termination process. 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.