Collapsed startup Marketforce Technologies has been ordered to pay one of its former product managers over KSh 2 million for not following procedure in declaring him redundant.
- •According to court papers, Marketforce issued a notice of redundancy in mid-July 2023 but did not serve it to the Labour Officer as prescribed in the law.
- •Tom Maina says that the notice of intention to declare redundancy was illegal because 30 days did not lapse before his position was declared redundant.
- •Founded in 2018 by Tesh Mbaabu and Mesongo Sibuti, Marketforce grew on the back of venture capital funding but begun downscaling operations in 2022 as it ran into financial headwinds.
“There was also no evidence of discussions/meetings to discuss the redundancy prior to the notice,” Justice CN Baari ruled in March.
Documents filed in court showed that Marketforce owed Maina KSh 767, 742 in terminal dues, and KSh 548, 805 in salary arrears. Maina also questioned the fairness of his termination, as the sole reason for his termination was alleged restructuring of the startup. He argued that the startup failed to demonstrate that seniority, ability, reliability and availability was considered before rendering him redundant.
“In the whole, this court finds and holds that the claimant’s termination was both procedurally and substantively unfair,” Justice Baari added.
In the final analysis, the court orderered the tech company to pay KSh 1,316,547/- as terminal dues, and 4 month’s salary for the unfair termination at KSh 800,000/-. It also ruled that Marketforce, which did not defend the case, should pay the costs of the suit.
The startup begun showing signs of distress in 2022, when it reduced its workforce by 9% saying that it wanted to derive more revenue per merchant. Earlier that year, it had raised a US$40 million Series A in debt and equity. In early 2024, the company said it would be further downscaling operations and exploring a new business model. It followed through by shutting down its main B2B platform Reja Reja in April 2024.
As its fortunes waned, Marketforce was also engaged in a public spat with digital financial marketplace Pezesha over unpaid debt. The dispute ran from August 2023 to March 2024, when the Founder CEOs of both companies buried the hatchet on a runway in the Maasai Mara.
