1. The appellant dissatisfied with the Judgment of the Principal Magistrate Hon Christine Asuna Okello at Milimani Court delivered on 12th September, 2023, in CMEL No. E784 of 2020 filed a memorandum of appeal dated 11th October 2023 seeking for the following orders:-
a) The Appeal be allowed.
b) The Judgment delivered on the 12th September 2023 be set aside and this Honourable Court do make a finding in favour of the Appellant.
c) The costs of the Appeal be borne by the Respondent.
2. Grounds of the appeal
1) THAT the Learned Trial Magistrate erred in law and misdirected herself on the law and principles on the law relating to the burden of proof.
2) THAT the Learned Trial Magistrate erred in law and fact by holding that the Respondent herein had proved his case.
3) THAT the Learned Trial Magistrate erred in law and fact by taking into account extraneous matters and ignored the evidence tendered by the Appellant and the Appellant is aggrieved by the same and intends to pursue the Appeal.
4) THAT the Learned Trial Magistrate erred in law and fact by disregarding and misconstruing the evidence laid out in support of the Counter-Claim and the Statement of Defence.
5)
THAT the resulting Judgment reflected only one side of the matter wherein substantive justice was not done.
6) THAT the Learned Magistrate erred in law and in fact by holding that the Claimant was unlawfully terminated from employment when there was compelling evidence that the respondent had absconded from work.
7) THAT the Learned Magistrate erred in finding that the Respondent was not subjected to a disciplinary process.
8) THAT the Learned Magistrate erred in Law and in fact by awarding excessive damages to the Respondent.
9) THAT the Learned Magistrate erred in law and in fact by allowing the Respondent herein's claim as prayed and by awarding the Respondent remedies that were not legally available.
10) THAT the Learned Trial Magistrate erred in law and in fact by disregarding and misconstruing the evidence laid out by the Appellant and its submissions.
3. The Respondent in response filed notice of cross appeal dated 2nd November 2023 contesting the award and seeking for the following orders:-
a) The cross-appeal made be allowed.
b) The Judgment of Principal Magistrate Hon. C.A. Okello (Mrs.) of the Employment & Labour Court at Nairobi delivered on 12.09.2023 in the Employment and Labour Relations Court in CAUSE NO. 784 OF 2020 be set aside in part forthwith.
c) The appeal be dismissed with costs to the Cross-Appellant.
4. The cross-appeal was premised on the ground that the Learned Magistrate erred in law and fact in computing terminal benefits based on the 2017 salary of Kshs 30,600/= instead of using the salary of Kshs 40,000/= payable at the time of termination.
BACKGROUND TO THE APPEAL
5. The appeal and cross-appeal arose from the judgment in Milimani Commercial courts CMEL Case No. E784 of 2020 where the Respondent had filed a memorandum of claim dated 6th July 2020 and alleged unlawful and unfair termination of employment. He sought for following reliefs:-
a. A declaration that the termination of the claimant was illegal and unlawful.
b. The respondent to pay to the claimant amount of Kshs. 2,770,096.15 as stated in paragraph 20 above.
c. The respondent to pay the claimant compensation of Kshs. 900,000.00
d. The Respondent to pay to the claimant exemplary damages.
e. Costs of the suit and interest.
6. Together with the claim, the claimant filed his verifying affidavit, his witness statement and list of documents all of 6th July 2020 and the bundle of documents(pages 4-17 of ROA was the claimant’s case). The claimant filed an additional list of documents dated 14th September 2021 and a further witness of a former colleague, Chrispin Otieno Asin of even date(Pages 29-43 of ROA)
7. The claim was opposed by the appellant who entered an appearance through the law firm of S.M.Muhia & Company advocates and filed a statement for defence and counterclaim dated 2nd June 2021. In the counterclaim, the appellant sought judgment against the claimant for:-
a. Kshs. 36000 being payment in lieu of notice
b. Kshs. 548,364 being the monies that the claimant had defrauded the respondent off
c. Costs and interest on the above at court rates.
8. The appellant in support of the response filed a list of documents dated 16th February 2023 and the bundle of documents (pages 54-72 of ROA). The appellant filed a supplementary list of documents dated 20th February 2023 a resolution authorizing Gurmeet Singh to execute all documents in the suit and Benard Abel Nyakundi to be their witness. The Respondent’s/appellant’s witness statement of Benard Abel Nyakundi was dated 6th December 2022 (pages 26-28 of ROA).
9. The trial court heard the claimant’s case on the 20th of February 2023 where he testified on oath as CW1, produced his documents, and was cross-examined by counsel for the appellant, Mwangi. On the 15th of March 2023, the claimant called CW2 Chrispin Otieno Asin who testified on oath as a witness of fact and was cross-examined by counsel for the appellant, Mwangi. On even date the appellant’s case proceeded with Benard Abel Nyakundi testifying on oath as RW1. He adopted his witness statement as his evidence in chief, produced as the respondent’s evidence all filed documents as R-Exh 1-13. He was cross-examined by counsel for the claimant, Khalwale. The parties then took directions for filing of written submission (proceedings at pages 87-95 of ROA).
10. The trial court delivered its judgment on the 12th of September 2023 in favour of the claimant as follows:-
a. A declaration is hereby made that the respondent’s act of terminating the claimant’s employment was illegal and unlawful.
b. Kshs. 897,646 awarded in paragraph 20 of the claim.
c. Kshs. 108 ,000(36000*3 months ) being compensation for unfair termination.
TOTAL Kshs. 1,005,646.
d. Costs of the suit and interest thereon.
11. On the counterclaim, the Trial Magistrate held that the appellant had not proved the case against the claimant on a balance of probabilities. There was no evidence the claimant had been found guilty of fraud by any court of law. The police abstract produced as evidence of the crime having been reported did not relate to the claimant hence no direct evidence of collusion. The counterclaim was dismissed with no order as to costs.
DETERMINATION
12. The appeal was canvassed by way of written submissions. Both parties complied.
13. This being a first appellate court, it was held in Selle v Associated Motor Boat Co. [1968] EA 123 that:- “The appellate court is not bound necessarily to accept the findings of fact by the court below. An appeal to the Court of Appeal from a trial by the High Court is by way of a retrial and the principles upon which the Court of Appeal acts are that the court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular the court is not bound necessarily to follow the trial Judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”
14. The court is further guided by principles at appeal set out in Mbogo v Shah [1968] EA where De Lestang V.P (as he then was) observed at page 94: -“I think it is well settled that this Court will not interfere with the exercise of its discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.’’
Issues for determination
15. The parties addressed all the grounds of the appeal and of the cross-appeal in the submissions.
16. The court having perused the appeal and cross-appeal was of the considered opinion that the issues placed before the court for determination in the appeal were as follows:-
a. Whether the trial court erred in facts and law in finding that the termination of the claimant’s employment was unlawful and in dismissing the counterclaim.
b. Whether the trial court erred in the applied monthly salary as related to the cross-appeal and Whether the trial court erred in fact and law in the remedies granted.
Whether the trial court erred in facts and law in finding that the termination of the claimant’s employment was unlawful and unfair and in dismissing the counterclaim
17. The appellant, on the reasons for termination, as per the Counterclaim was on the basis that the claimant had defrauded Kshs. 548,364 from the Respondent by irregular salary increments and had not given notice of absconding work.
18. The appellant submitted that the claimant’s evidence on the disputed increments was done to evade tax. That both Respondent’s witnesses alleged tax evasion but never reported to the authorities. The appellant relied on the provisions of sections 107-109 of the Evidence Act that he who alleges must prove. That CW2 admitted that for one to get salary increment one had not make a written request to the director but the respondent did not produce any application and he refused to produce his bank statement when he was requested by the appellant.
19. The respondent on the issue of fraud, submitted that the evidence of the appellant before the trial court was inconclusive. The trial court could not act on an unproved allegation of fraud. The police abstract tendered was irrelevant to the case as reflected in paragraph 103 of ROA. The Respondent submitted that the trial court acted on the right principles of proof.
Decision
20. Section 43n of the Employment Act places the burden to prove reasons for termination on the employer. The trial court held that the appellant had not proved the case against the claimant on balance of probabilities. There was no evidence the claimant had been found guilty of fraud by any court of law. The police abstract produced as evidence of the crime having been reported did not relate to the claimant hence no direct evidence of collusion. The counterclaim was dismissed with no order as to costs. (page 102 of ROA).
21. At the trial RW1 during cross-examination relied on a report by consultants showing the money stolen and stated that the letter dated 18th May 2020 the respondent confirmed he received a certain amount of money and received the most. The appellant also produced a police abstract on report of the said lost monies.
22. The court siting on first appeal is obliged to evaluate the evidence before the trail court and reach its own conclusion (Selle v Associated Motor Boat Co. [1968] EA 123). The Court perused the said consultants report for the years 2017 to 2020 on the said excess payment of Kshs. 514,000. The said report was not supported by documents of the payroll and banking deposits. There was no evidence that the claimant was involved in preparation of the report. the report was not produced by the author. The court taking into consideration the foregoing found no probative value of evidence in the said report. The police abstract produced (page 69) related to another person(CW2) and did not mention the claimant. The standard of proof of fraud is higher than balance of probabilities as it falls under crime. The evidence before the trial court by the Respondent of the alleged fraud was wanting. The court found no basis to disturb the finding the trial court that the counterclaim was not proved.
23. On whether the Respondent absconded, the trial court found that the claimant was told to leave by one Irungu on the 19th May 2020 hence not absconded. This evdience was not controverted. The court held that the claimant was dismissed from employed without a justified reason and hence no basis to disturb the decision of the trial court.
24. On procedural fairness, according to section 45(2) of the Employment Act, a termination of employment is only fair if it meets both the reasons and procedure requirements under section 41 of the Act. Section 45(2) states:- ‘’(2) A termination of employment by an employer is unfair if the employer fails to prove—
(a) that the reason for the termination is valid;
(b) that the reason for the termination is a fair reason—
(i) related to the employees conduct, capacity or compatibility; or
(ii) based on the operational requirements of the employer; and
(c) that the employment was terminated in accordance with fair procedure.’’
24. The court having evaluated the claimant’s evidence that he was verbally dismissed on 19th may 2020 by the supervisor Irungu and found it was not controverted. Indeed the show cause letter 22nd May 2020 did not mention absconding of duty yet he had been away from duty since 19th May 2020. The court agreed with trial court that the show cause was after termination. After termination of employment, there is no employee employer relations and the employer can not purport to take any disciplinary process against the ex-employee.
25. The court upheld the trial court decision that the termination of the employment of the respondent was unlawful and unfair.
Whether the trial court erred in the applied monthly salary as related to the cross-appeal and Whether the trial court erred in fact and law in the remedies granted.
26. On the remedies awarded the court on perusal of the claimant’s testimony at cross-examination was that his salary was Kshs. 30000 and a house allowance of 5400 form 2017. The appellant produced the contract indicating basis salary of Kshs. 30600 and house allowance of Kshs. 5400 totals Ksh. 36000(page 71 of ROA) The court found no basis to interfere with the finding of trial court on the salary of Kshs. 36000 as pleaded by the respondent and as per contract of 2017 produced which was higher than admitted at trial by the claimant. The cross-appeal was held to lack merit and dismissed.
27. On the remedies awarded, on housing allowance RW1 stated that between 2011 and 2017 there was no house allowance appearing in the payslip. He said the practice was to pay a consolidated salary in that period. In 2017 house allowance was reflected in the contract. The claimant claimed for unpaid house allowance 2011 to 2017. RW1 admitted salary for May was not paid stating the claimant had absconded duty. RW1 stated employees were paid in lieu of leave. That they never went on leave for 5 years . He stated they were on NSSF hence service pay was not payable.
28. The court perused the payslips before 2017 and found the payment was basic salary only and house allowance was 0(Page 30-31 of ROA) The claim for house allowance was for the period before 2017 hence merited. The appellant’s witness at the trial, admitted employees did not go on leave. there was no evidence of the alleged payment in lieu. The award on leave was justified. Notice pay was due for lack of procedural fairness. The compensation equivalence of 3 months salary was fair. The claimant under payslip was entitled to NSSF hence ought not to have been awarded service pay.
29. The claimant /Respondent was awarded service pay which is disputed by the appellant on basis of having been under NSSF. Service pay is awardable under section 35(5) and (6) of the Employment Act as follows:-
(5) An employee whose contract of service has been terminated under subsection (1)(c) shall be
entitled to service pay for every year worked, the terms of which shall be fixed.
(6) This section shall not apply where an employee is a member of—
(a) a registered pension or provident fund scheme under the Retirement Benefits Act;
(b) a gratuity or service pay scheme established under a collective agreement;
(c) any other scheme established and operated by an employer whose terms are more favourable
than those of the service pay scheme established under this section; and
(d) the National Social Security Fund’’ The Claimant produced before the trial court payslips indicating he was deducted NSSF. The service pay was thus irregularly awarded and is set aside.
30. In conclusion, all the awards are upheld save for service pay which is set aside.
31. In the upshot, the appeal is allowed partially concerning service pay only. The cross-appeal is dismissed. The Judgment of the Principal Magistrate Hon Christine Asuna Okello at Milimani Court delivered on 12th September, 2023, in CMEL No. E784 of 2020 is set aside and substituted as follows:-
Judgment is entered for the claimant against respondent as follows:-
a. A declaration is hereby made that the respondent’s act of terminating the claimant’s employment was illegal and unlawful.
b. Kshs.712,800 awarded for Notice pay, unpaid salary May 2020, House allowance for 72 months and leave allowance for 7 years as pleaded in paragraph 20 of the claim.
c. Kshs. 108 ,000(36000*3 months ) being compensation for unfair termination.
TOTAL Kshs. 820,800 .
d. Costs of the suit and interest thereon from judgment date.
32. Each party to bear own costs in the appeal and the cross-appeal.
33. It is so Ordered.
DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 21st DAY OF FEBRUARY, 2025.
a) The Appeal be allowed.
b) The Judgment delivered on the 12th September 2023 be set aside and this Honourable Court do make a finding in favour of the Appellant.
c) The costs of the Appeal be borne by the Respondent.
2. Grounds of the appeal
1) THAT the Learned Trial Magistrate erred in law and misdirected herself on the law and principles on the law relating to the burden of proof.
2) THAT the Learned Trial Magistrate erred in law and fact by holding that the Respondent herein had proved his case.
3) THAT the Learned Trial Magistrate erred in law and fact by taking into account extraneous matters and ignored the evidence tendered by the Appellant and the Appellant is aggrieved by the same and intends to pursue the Appeal.
4) THAT the Learned Trial Magistrate erred in law and fact by disregarding and misconstruing the evidence laid out in support of the Counter-Claim and the Statement of Defence.
5)
THAT the resulting Judgment reflected only one side of the matter wherein substantive justice was not done.
6) THAT the Learned Magistrate erred in law and in fact by holding that the Claimant was unlawfully terminated from employment when there was compelling evidence that the respondent had absconded from work.
7) THAT the Learned Magistrate erred in finding that the Respondent was not subjected to a disciplinary process.
8) THAT the Learned Magistrate erred in Law and in fact by awarding excessive damages to the Respondent.
9) THAT the Learned Magistrate erred in law and in fact by allowing the Respondent herein's claim as prayed and by awarding the Respondent remedies that were not legally available.
10) THAT the Learned Trial Magistrate erred in law and in fact by disregarding and misconstruing the evidence laid out by the Appellant and its submissions.
3. The Respondent in response filed notice of cross appeal dated 2nd November 2023 contesting the award and seeking for the following orders:-
a) The cross-appeal made be allowed.
b) The Judgment of Principal Magistrate Hon. C.A. Okello (Mrs.) of the Employment & Labour Court at Nairobi delivered on 12.09.2023 in the Employment and Labour Relations Court in CAUSE NO. 784 OF 2020 be set aside in part forthwith.
c) The appeal be dismissed with costs to the Cross-Appellant.
4. The cross-appeal was premised on the ground that the Learned Magistrate erred in law and fact in computing terminal benefits based on the 2017 salary of Kshs 30,600/= instead of using the salary of Kshs 40,000/= payable at the time of termination.
BACKGROUND TO THE APPEAL
5. The appeal and cross-appeal arose from the judgment in Milimani Commercial courts CMEL Case No. E784 of 2020 where the Respondent had filed a memorandum of claim dated 6th July 2020 and alleged unlawful and unfair termination of employment. He sought for following reliefs:-
a. A declaration that the termination of the claimant was illegal and unlawful.
b. The respondent to pay to the claimant amount of Kshs. 2,770,096.15 as stated in paragraph 20 above.
c. The respondent to pay the claimant compensation of Kshs. 900,000.00
d. The Respondent to pay to the claimant exemplary damages.
e. Costs of the suit and interest.
6. Together with the claim, the claimant filed his verifying affidavit, his witness statement and list of documents all of 6th July 2020 and the bundle of documents(pages 4-17 of ROA was the claimant’s case). The claimant filed an additional list of documents dated 14th September 2021 and a further witness of a former colleague, Chrispin Otieno Asin of even date(Pages 29-43 of ROA)
7. The claim was opposed by the appellant who entered an appearance through the law firm of S.M.Muhia & Company advocates and filed a statement for defence and counterclaim dated 2nd June 2021. In the counterclaim, the appellant sought judgment against the claimant for:-
a. Kshs. 36000 being payment in lieu of notice
b. Kshs. 548,364 being the monies that the claimant had defrauded the respondent off
c. Costs and interest on the above at court rates.
8. The appellant in support of the response filed a list of documents dated 16th February 2023 and the bundle of documents (pages 54-72 of ROA). The appellant filed a supplementary list of documents dated 20th February 2023 a resolution authorizing Gurmeet Singh to execute all documents in the suit and Benard Abel Nyakundi to be their witness. The Respondent’s/appellant’s witness statement of Benard Abel Nyakundi was dated 6th December 2022 (pages 26-28 of ROA).
9. The trial court heard the claimant’s case on the 20th of February 2023 where he testified on oath as CW1, produced his documents, and was cross-examined by counsel for the appellant, Mwangi. On the 15th of March 2023, the claimant called CW2 Chrispin Otieno Asin who testified on oath as a witness of fact and was cross-examined by counsel for the appellant, Mwangi. On even date the appellant’s case proceeded with Benard Abel Nyakundi testifying on oath as RW1. He adopted his witness statement as his evidence in chief, produced as the respondent’s evidence all filed documents as R-Exh 1-13. He was cross-examined by counsel for the claimant, Khalwale. The parties then took directions for filing of written submission (proceedings at pages 87-95 of ROA).
10. The trial court delivered its judgment on the 12th of September 2023 in favour of the claimant as follows:-
a. A declaration is hereby made that the respondent’s act of terminating the claimant’s employment was illegal and unlawful.
b. Kshs. 897,646 awarded in paragraph 20 of the claim.
c. Kshs. 108 ,000(36000*3 months ) being compensation for unfair termination.
TOTAL Kshs. 1,005,646.
d. Costs of the suit and interest thereon.
11. On the counterclaim, the Trial Magistrate held that the appellant had not proved the case against the claimant on a balance of probabilities. There was no evidence the claimant had been found guilty of fraud by any court of law. The police abstract produced as evidence of the crime having been reported did not relate to the claimant hence no direct evidence of collusion. The counterclaim was dismissed with no order as to costs.
DETERMINATION
12. The appeal was canvassed by way of written submissions. Both parties complied.
13. This being a first appellate court, it was held in Selle v Associated Motor Boat Co. [1968] EA 123 that:- “The appellate court is not bound necessarily to accept the findings of fact by the court below. An appeal to the Court of Appeal from a trial by the High Court is by way of a retrial and the principles upon which the Court of Appeal acts are that the court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular the court is not bound necessarily to follow the trial Judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”
14. The court is further guided by principles at appeal set out in Mbogo v Shah [1968] EA where De Lestang V.P (as he then was) observed at page 94: -“I think it is well settled that this Court will not interfere with the exercise of its discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.’’
Issues for determination
15. The parties addressed all the grounds of the appeal and of the cross-appeal in the submissions.
16. The court having perused the appeal and cross-appeal was of the considered opinion that the issues placed before the court for determination in the appeal were as follows:-
a. Whether the trial court erred in facts and law in finding that the termination of the claimant’s employment was unlawful and in dismissing the counterclaim.
b. Whether the trial court erred in the applied monthly salary as related to the cross-appeal and Whether the trial court erred in fact and law in the remedies granted.
Whether the trial court erred in facts and law in finding that the termination of the claimant’s employment was unlawful and unfair and in dismissing the counterclaim
17. The appellant, on the reasons for termination, as per the Counterclaim was on the basis that the claimant had defrauded Kshs. 548,364 from the Respondent by irregular salary increments and had not given notice of absconding work.
18. The appellant submitted that the claimant’s evidence on the disputed increments was done to evade tax. That both Respondent’s witnesses alleged tax evasion but never reported to the authorities. The appellant relied on the provisions of sections 107-109 of the Evidence Act that he who alleges must prove. That CW2 admitted that for one to get salary increment one had not make a written request to the director but the respondent did not produce any application and he refused to produce his bank statement when he was requested by the appellant.
19. The respondent on the issue of fraud, submitted that the evidence of the appellant before the trial court was inconclusive. The trial court could not act on an unproved allegation of fraud. The police abstract tendered was irrelevant to the case as reflected in paragraph 103 of ROA. The Respondent submitted that the trial court acted on the right principles of proof.
Decision
20. Section 43n of the Employment Act places the burden to prove reasons for termination on the employer. The trial court held that the appellant had not proved the case against the claimant on balance of probabilities. There was no evidence the claimant had been found guilty of fraud by any court of law. The police abstract produced as evidence of the crime having been reported did not relate to the claimant hence no direct evidence of collusion. The counterclaim was dismissed with no order as to costs. (page 102 of ROA).
21. At the trial RW1 during cross-examination relied on a report by consultants showing the money stolen and stated that the letter dated 18th May 2020 the respondent confirmed he received a certain amount of money and received the most. The appellant also produced a police abstract on report of the said lost monies.
22. The court siting on first appeal is obliged to evaluate the evidence before the trail court and reach its own conclusion (Selle v Associated Motor Boat Co. [1968] EA 123). The Court perused the said consultants report for the years 2017 to 2020 on the said excess payment of Kshs. 514,000. The said report was not supported by documents of the payroll and banking deposits. There was no evidence that the claimant was involved in preparation of the report. the report was not produced by the author. The court taking into consideration the foregoing found no probative value of evidence in the said report. The police abstract produced (page 69) related to another person(CW2) and did not mention the claimant. The standard of proof of fraud is higher than balance of probabilities as it falls under crime. The evidence before the trial court by the Respondent of the alleged fraud was wanting. The court found no basis to disturb the finding the trial court that the counterclaim was not proved.
23. On whether the Respondent absconded, the trial court found that the claimant was told to leave by one Irungu on the 19th May 2020 hence not absconded. This evdience was not controverted. The court held that the claimant was dismissed from employed without a justified reason and hence no basis to disturb the decision of the trial court.
24. On procedural fairness, according to section 45(2) of the Employment Act, a termination of employment is only fair if it meets both the reasons and procedure requirements under section 41 of the Act. Section 45(2) states:- ‘’(2) A termination of employment by an employer is unfair if the employer fails to prove—
(a) that the reason for the termination is valid;
(b) that the reason for the termination is a fair reason—
(i) related to the employees conduct, capacity or compatibility; or
(ii) based on the operational requirements of the employer; and
(c) that the employment was terminated in accordance with fair procedure.’’
24. The court having evaluated the claimant’s evidence that he was verbally dismissed on 19th may 2020 by the supervisor Irungu and found it was not controverted. Indeed the show cause letter 22nd May 2020 did not mention absconding of duty yet he had been away from duty since 19th May 2020. The court agreed with trial court that the show cause was after termination. After termination of employment, there is no employee employer relations and the employer can not purport to take any disciplinary process against the ex-employee.
25. The court upheld the trial court decision that the termination of the employment of the respondent was unlawful and unfair.
Whether the trial court erred in the applied monthly salary as related to the cross-appeal and Whether the trial court erred in fact and law in the remedies granted.
26. On the remedies awarded the court on perusal of the claimant’s testimony at cross-examination was that his salary was Kshs. 30000 and a house allowance of 5400 form 2017. The appellant produced the contract indicating basis salary of Kshs. 30600 and house allowance of Kshs. 5400 totals Ksh. 36000(page 71 of ROA) The court found no basis to interfere with the finding of trial court on the salary of Kshs. 36000 as pleaded by the respondent and as per contract of 2017 produced which was higher than admitted at trial by the claimant. The cross-appeal was held to lack merit and dismissed.
27. On the remedies awarded, on housing allowance RW1 stated that between 2011 and 2017 there was no house allowance appearing in the payslip. He said the practice was to pay a consolidated salary in that period. In 2017 house allowance was reflected in the contract. The claimant claimed for unpaid house allowance 2011 to 2017. RW1 admitted salary for May was not paid stating the claimant had absconded duty. RW1 stated employees were paid in lieu of leave. That they never went on leave for 5 years . He stated they were on NSSF hence service pay was not payable.
28. The court perused the payslips before 2017 and found the payment was basic salary only and house allowance was 0(Page 30-31 of ROA) The claim for house allowance was for the period before 2017 hence merited. The appellant’s witness at the trial, admitted employees did not go on leave. there was no evidence of the alleged payment in lieu. The award on leave was justified. Notice pay was due for lack of procedural fairness. The compensation equivalence of 3 months salary was fair. The claimant under payslip was entitled to NSSF hence ought not to have been awarded service pay.
29. The claimant /Respondent was awarded service pay which is disputed by the appellant on basis of having been under NSSF. Service pay is awardable under section 35(5) and (6) of the Employment Act as follows:-
(5) An employee whose contract of service has been terminated under subsection (1)(c) shall be
entitled to service pay for every year worked, the terms of which shall be fixed.
(6) This section shall not apply where an employee is a member of—
(a) a registered pension or provident fund scheme under the Retirement Benefits Act;
(b) a gratuity or service pay scheme established under a collective agreement;
(c) any other scheme established and operated by an employer whose terms are more favourable
than those of the service pay scheme established under this section; and
(d) the National Social Security Fund’’ The Claimant produced before the trial court payslips indicating he was deducted NSSF. The service pay was thus irregularly awarded and is set aside.
30. In conclusion, all the awards are upheld save for service pay which is set aside.
31. In the upshot, the appeal is allowed partially concerning service pay only. The cross-appeal is dismissed. The Judgment of the Principal Magistrate Hon Christine Asuna Okello at Milimani Court delivered on 12th September, 2023, in CMEL No. E784 of 2020 is set aside and substituted as follows:-
Judgment is entered for the claimant against respondent as follows:-
a. A declaration is hereby made that the respondent’s act of terminating the claimant’s employment was illegal and unlawful.
b. Kshs.712,800 awarded for Notice pay, unpaid salary May 2020, House allowance for 72 months and leave allowance for 7 years as pleaded in paragraph 20 of the claim.
c. Kshs. 108 ,000(36000*3 months ) being compensation for unfair termination.
TOTAL Kshs. 820,800 .
d. Costs of the suit and interest thereon from judgment date.
32. Each party to bear own costs in the appeal and the cross-appeal.
33. It is so Ordered.
DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 21st DAY OF FEBRUARY, 2025.