1. By a memorandum of claim dated 24th November, 2022, the claimant pleads inter alia:-
a. The Claimant was employed some times in 1996 as an instructor. He rose through the ranks due to his stellar performance in the various sectors he was deployed and resigned on the 9th November 2021, as a General Manager Guarding earning a gross salary of Kshs. 320,550/=. The Claimant was issued with a confirmation letter at each stage of his promotion and salary increment respectively. He was not given an appointment letter as required by the law however he has documents to prove his relationship with the Respondent.
b. The Claimant upon commencing his duties as afore stated served the respondent with loyalty and diligence until the month of November, 2021 when the claimant resigned due to his personal reasons. The respondent has failed to pay the claimant his terminal benefits and gratuity despite having admitted in their acceptance letter that the same is due.
i. Leave earned and not taken 326.192.31
ii. November and December Salary for days worked for...395,345
iii. Gratuity at the rate of 18 days for each complete year in 26years, a basic salary of Kshs 257,000/= 257,000/30*18*26 = 4,009.200,000/=
TOTAL AMOUNT KSHS. 4,730,737.31
2. The claimant therefore prayed for:
a. the sum of Kshs.4,730,737.31 inclusive of gratuity.
b. Costs of this suit
c. Certificate of service
3. The respondent through an amended statement of response dated 21st February, 2025 pleaded among others that:
a. In response to Paragraph 4, the Respondent avers that the Claimant indeed worked for it for the periods between 1996 and 09/11/2021 when the Claimant suddenly tendered his resignation, where he alleged that the resignation was due to “personal reasons” as claimed.
b. FURTHER TO PARAGRAPH 4 ABOVE AND PROPERLY CONTEXUALISE THE RESIGNATION; the Claimant herein was issued with a Show Cause Letter dated 08/11/2021 with the subject; “Show cause on allegations of abuse of office-"
c. The ‘Show Cause’ letter had been preferred against the Claimant after the company carried out an audit of the expenditure in his docket on three headers;
i. Excess Shift Billing;
ii. Billing of. Wrong rates;
iii. Billing of fictitious guards;
d. The Claimant did submit a response dated 09/11/2021 to which he gave his version of events albeit not satisfactory AND a resignation letter dated the same day, clearly appreciating the gravity of the matter, but opting to take off;
e. The Respondent by a Letter dated 10/11/2021, acknowledged receipt and set in motion the clearance process of the Claimant;
f. IN ADDITION TO PARAGRAPH 8 ABOVE; the Respondent gave the Claimant an opportunity to present his explanation within 14 days, and also be shown the glaring evidence of misappropriation that had exposed the company to losses over a period of time to a tune of Kshs. 6,553,326.96/-;
g. The Respondent being a senior employee, holding the position of General Manager - Guarding, was in charge of hundreds of employees across the country, and also was the direct liaison person with Sub-contracting companies;
h. The Respondent herein sent an invitation letter to the Claimant via a letter dated 30/11/2021 to attend a meeting where the details of the audit would be discussed on 04/01/2022 and unravelled but the same did not happen due tjo unforeseen circumstances on the part of the Respondent.
i. The respondent sent a further invite dated 26/01/2022, for another meeting that was to be held on 02/02/2022 at the Respondent’s premises where both the Claimant and the Respondent agreed.
j. The Respondent avers that the purpose of the meeting was to give the Claimant a chance to appear before the disciplinary committee and answer to the audit report in his defence as all the queries raised were directly from his department, where he was the overall head, and responsible person;
k. FURTHER TO PARAGRAPH 13 ABOVE; the meeting was held on 02/02/2023, where the Claimant was given an opportunity to table his case, and recommendations arrived at;
l. In Response to paragraph 5 of the Memorandum of Claim, the Respondent avers that the same is a misrepresentation of facts as;
i. The Claimant herein, was asked by the Respondent to conclude clearance processes and have a tabulation of his dues;
ii. The Claimant, in the meeting held on 02/02/2022, accepted deduction for negligence due to his omission or otherwise commission;
iii. The Respondent, by a Letter dated 13/07/2022, sent to the Claimant his dues a follows;
DESCRIPTION | DAYS | AMOUNT | |
1. | Accrued Leave days | 33 f I' | 326, 192.31 |
2. | November 2021 Salary ■ | 30 | 320, 550.00 |
3. | December 2021 Salary | 9 | 74, 795.00 |
| TOTAL |
| 721,537.31 |
| LESS STATUTORY DEDUCTIONS |
| 221,553. 69 |
| TAX FOR UNACCOUNTED NIGHT OUT ALLOWANCE |
| 5,092.50 |
| RECOVERY- ADMITTED. NEGLIGENCE |
| 75, 000.00 |
| TOTAL PAYABLE |
| 419, 891.12 |
m. The Respondent avers that the Claimant has disputed the tabulations therein, claiming gratuity;
n. IN ADDITION TO PARAGRAPH 15 HEREIN ABOVE; and acknowledging that the Claimant had been in service for a period of time, it was assumed by the Respondent that he was familiar and well conversant with the provisions of the law, more so -
i. Legal Gazette Notice No. 24 of 1998, (Subsidiary Legislation) The Regulation of Wages and Conditions of Employment Act, which provides; The regulation of Wages (Protective Security Services) Order, 1998.S.17 thereto provides; “An employee who is summarily dismissed for lawful cause, or who terminates his services for reasons other than ill-health or retirement age, shall not be entitled to gratuity”
o. The Claimant has been subject to this section of the law ever since his initial employment, rising to be the General Manager Guarding services, and given that he willing fully, and voluntarily tendered his resignation letter, he is bound by the provision;
p. IN ADDITION TO PARGARAPH 17 ABOVE, the Demand and Claim for gratuity goes in direct violation of the S. 35(6)(d) of the Employment Act, as the Claimant has been a member of the the National Social Security Fund, to which the Respondent has religiously remitted his contribution;
q. FURTHER TO THE ABOVE AND WITHOUT PREJUDICE TO THE FOREGOING; the Claimant sometimes in October 2018, the Claimant herein applied for a loan facility from Radio Guards Co-operative Savings and Credit Society Ltd, for a sum of Kshs. 3, 000, 000/-;
r. The Respondent further avers that, the Claimant offered his final dues, Shares and guarantors as security;
s. The Respondent avers that sometimes in November 2019, the Claimant took a further loan of Kshs. 1, 900, 000/-;
t. The Respondent avers that, as of July 2022, the outstanding loan balance was KShs. 713, 920/- and as of January 2023, die outstanding sums are KShs. 657,215.68 which ideally means, the KShs. 419, 891.12/- has to be remitted to Radio Guards Co-operative Savings and Credit Society Ltd towards a partial repayment of the loan, and he at personal level clears the balance;
u. The Respondent avers that the existing relationship between the Radio Guards Co-operative Savings and Credit Society Ltd and the Respondent company, is that any clearing/exiting employee must clear any/all financial obligations taken out from the Sacco, or agree to their dues being channeled to the Sacco, on priority basis, and the balance released to them, in the event there is a balance;
v. The respondent avers that the Claimant has refused, declined and/or neglect to sign off the release of the funds to the Sacco, despite having the loan, and unnecessarily causing a stale mate of the final clearance with the Respondent;
4. The Claimant in the counter claim reiterates the contents of Paragraphs 1-28 of the Statement of Response herein above;
a. The Claimant in the counter claim avers that sometimes in 2021 it instructed ERIC NDEVENI, an Operations Auditor at the Claimant company, to carry out an audit of the third contracts and invoices that they would raise from time to time demanding for payments;
b. This were Contracts specifically under the Guarding department, where the Respondent in the counter claim was the General Manager - Guarding; had the general oversight, control, supervision and duty to, oversee on behalf of the Claimant on a dayto day basis;
c. Several audits were carried out, but of concern to this case, was the audit findings of the contract between Night Security Organization_EtcL(NS_Q) and the Claimant in the counterclaim company; the nature of the contract was:-
i. NSO was a service provider which provided/deployed guards to the claimant in the counterclaim to service its contractual obligations to its clients; T
ii. he claimant company has existing offices across, the, country, where they have field supervisors who carry out daily, 24-hour spot checks to confirm attendance of the guards as deployed by NSO and fill attendance registers;
iii. The field supervisors submits the attendance forms to Easy Roaster Officers (ERO) who key in the data of attendance and absenteeism fro each site-client’s premises into the system
iv. The Claimant further deploys sector managers who receive the reports from the field supervisors and verify;
v. The ERO would at the end of the day/month be able to ascertain how many guards did attend and those who failed to attend as this would eventually determine payment at the monthly cycle.
vi. The NSO would on a monthly basis send out invoices to the claimant company for settlement, where the NSO would pay the guards;
vii. On that background, the Claimant carry out the audit analysis from the month of April 2020 to August 2021 where several issues were flagged out; For avoidance of doubt, the audit involved;
a. An analysis of the data sheets from the field and the system data as keyed in by the Easy Roaster Officers (ERO);
b. An analysis of the monthly billings by the NSQ against the system data;
c. Following the audit, it was discovered that the Claimant had lost over KShs, 6,553,326.96/- as a result of the abuse.
d. The Claimant in the counterclaim claim’s against the Respondent is total of Kshs. 6,553, 326.00/= being the total amount of the loss incurred as a result of the Respondent’s abuse of office-
5. At the trial, the claimant gave evidence and adopted his witness statement and documents both dated 24th November, 2022 as his evidence in chief and exhibits and stated in cross-examination that at the time of dismissal, he was General Manager In-Charge of Guarding Services. In charge of the guarding force, discipline, business growth, partly in charge of marketing and client retention and that client retention involved tracking and tracing of payments by clients. In the course of his duties, he interacted with NSO Limited. They were sub-contractors and provided the respondents with guards and were responsible for payment of guards. It was further his testimony that the duty rooster was maintained by the Respondent and that the Respondent provided supervisors who were its employees. His role was to confirm the authenticity of payroll from NSO.
6. The claimant further stated that there was an audit of bills from NSO and concerns were raised which he responded to. He further stated that he responded to the show cause letter dated 8th November 2021 and that he understood what a show cause meant. He further stated that the audit raised the issue of excess shift billing by NSO and billing of wrong rates and fictitious guards. He denied that there were cases of excessive billing and that it was a case of error in computation. It was his evidence that there were different methods of billing. Nairobi had a different method of billing. Once a guard works for more than twenty one days, he would be paid for the whole month.
7. It was the claimant’s contention that the Respondent lost no money and that he resigned the same day after giving his response. He further stated that the audit was still going on when he resigned. He claimed tha the Country Director told him that the chief executive officer wanted him out and he opted to resign. I have not stated in my witness the issue of the chief executive officer wanting me out. The claimant further admitted that he had come across the Protection Security Wages Order but had not come across its provisions on resignation pending investigations. Regarding loans he admitted taking loans during his employment and that he owed approximately Kshs.713,000/= at the time he resigned and that he had not been repaying the loan after leaving the respondent and that he was depending on his gratuity to be able to offset the loan and that the guarantors were being deducted for the loan and further that he was obligated to repay the loan
8. The respondent on its part called two witnesses. The first witness RW1, Mr. Eric Ndeveni stated that he was the Operations Auditor for the Respondent and that he wrote a witness statement on 6th February, 2023 which he adopted as his evidence in chief. He further stated that there were issues between NSO and the Respondent and that the NSO used to provide guards and we used to pay them. There were discrepancies between the shifts at NSO and the ones received and that the Claimant was Manager Guarding. It was further his evidence that the there were differences in shifts and billing and that the respondent lost about 6 million shillings.
9. In cross-examination he stated that as an employee of the Respondent he was doing audit between NSO and the Respondent and was aware of how the contract came about. Further that that the relationship with NSO was reviewed in 2012 but started earlier. It was further his evidence that he knew the agreed billing system and that in Mombasa they were using shift basis. According to him, under the shift system payment was on daily basis but aggregated. Nairobi was paid monthly if one worked for more than twenty days and that the Nairobi system was in writing and that he was focusing on Nairobi. It was his evidence that he did not do audit Mombasa and did not compare the two billing systems. He wanted to compare the shift rooster the respondent had and the one the NSO was using billing the Respondent. It was further his evidence that he was aware that the Claimant gave explanation on the discrepancies and that he was tasked to do audit and give the outcome to the management and further that in his report he did not implicate the Claimant.
10. The respondent’s second witness RW2 stated that she was called Joan Birech and that she recorded a statement on 6th February 2023 which she adopted as her evidence in chief and also relied on the attached documents. She further stated that she was aware when the Claimant left the company and that the claimant was issued with a notice to show cause to explain the anomalies in the billing. He responded to the notice to show cause and also resigned at the same time (9th November). After resigning, the respondent could not convene a disciplinary committee. The Respondent acknowledged the resignation.
11. She further stated that the Claimant worked for thirty days in November and for seven days in December. Concerning gratuity, it was her evidence that the same was extended as standard payment to employees who leave under normal circumstances. The Claimant caused the Respondent loss hence was not entitled to gratuity.
12. In cross-examination she stated that the received the resignation letter and responded to the same (10th November 2021) and that it was standard practise to pay gratuity to employees who left with a clean record and that the acknowledgment of resignation letter mentioned that gratuity would be paid.
13. Concerning terminal dues, she stated that from the claimant’s final dues, Kshs.75,000/= was deducted and that the Claimant admitted to it. Further that the claimant after resignation was called upon to come and defend himself over the lost amount. Regarding NSO contract, she stated that she was aware of the same and how it operated. Nairobi billing was on basis of days worked but the Claimant issued a direction that anyone working for more than twenty days should be paid for the whole month. This caused discrepancy in the billing. She however stated that she did not have the email before the Court and that the agreement with NSO was terminated after the incident and further that they had not claimed any money from NSO and further that the claimant had not collected his final dues because he is demanding to be paid gratuity.
14. In reexamination she stated that the respondent held meetings with the Claimant over the incident and that they met on 2nd February and 16th June 2022 and this was after the claimant had already left employment. The meetings were to give the Claimant a chance to defend himself against the allegations against him. He admitted to repayment of Kshs.75,000/=
15. In his submissions in support of the claim, Mr. Odegi for the claimant submitted among others that although the Employment Act, 2007, did not explicitly mandate the payment of gratuity to employees upon resignation, however, section 35(5) of the Act provided that an employee was entitled to payment for any leave days accrued but not taken. Furthermore, where an employer has a practice or policy of paying gratuity, such practice may form part of the contractual obligations between the employer and the employee. In this regard Counsel relied on the case of Kenga v. Petrocity Enterprises Limited (Cause E051 of 2022), where the Court noted that the Respondent had a tradition of paying gratuity to employees upon termination, which was upheld by the Court. This practice was deemed binding, and the Court awarded the Claimant gratuity based on the Respondent's established policy. Similarly, in the present case, the Respondent's acknowledgment of the Claimant's resignation and the subsequent offer to pay gratuity at the rate of 18 days for each complete year of service establishes a practice or policy of paying gratuity. This practice was binding upon the Respondent, and the Claimant was entitled to gratuity as outlined in the correspondence dated 11th October, 2019. Counsel further relied on the case of Bamburi Cement Limited v William Kilonzi (2016) eKLR, where the Court of Appeal stated:-
“Gratuity, as the name implies, is a gratuitous payment for services rendered. It is paid to an employee or his estate by an employer either at the end of a contract or upon resignation or retirement or upon death of the employee, as a lump sum amount at the discretion of an employer. The employee does not contribute any sum or portion of his salary towards payment of gratuity. An employer may consider the option of gratuity in lieu of a pension scheme. Being a gratuitous payment the contract of employment may provide that the employer shall not pay gratuity if the termination of employment is through dismissal arising from gross or other misconduct. But where, like here, the dismissal is not justified and is wrongful the employee will be awarded gratuity if it is provided for in the contract of employment.”
16. Counsel conceded that whereas the claimant was a member of NSSF, the respondent while accepting his resignation promised to pay him his gratuity. In the circumstances the promise crystalized at that point and the respondents could not renege on the same. In addition to the Respondent’s acknowledgment, there was external evidence that Respondent pays gratuity to other employees, such as in the case of Zachary Magadi Isanda and that during the hearing of the Respondent’s case, the witness called by the Respondent confirmed that gratuity was payable upon retirement or resignation. Mr. Odegi further contented that since the claimant did not resign under duress or misconduct in order to avoid liability, gratuity was payable. He further argued that whilst the Respondent had raised allegations of misconduct in the show cause notice, there was no evidence that the misconduct was legally proven or that the Claimant was found guilty and disciplined in a manner that legally justified withholding gratuity.
17. The respondent’s Counsel Mr. Olao on the other hand submitted among others the Court could not compel a a dissatisfied employer to say “Thank You!” It was further his submission that both the Claimant and the Respondent agreed on the definition and the background of gratuity, therefore the court could not the respondent to pay the claimant gratuity. In this regard, counsel relied on the case of Kenga v Petrocity Enterprises Limited [2025] KEELRC2495 (KLR) where the court stressed thus; stated:-
“Repeatedly, this Court has stated that gratuity is not a statutory benefit. It is a contractual benefit or one that can flow from a practice within an enterprise. The Claimant admitted that his contract of service did not provide for gratuity. He asserted that his claim under this head was anchored on a practice within the Respondent company. In my view, the assertion was a bald assertion without sufficient evidential support. I reject the claim. ” (Emphasis ours)
18. Counsel submitted that the Claimant’s claim for gratuity was anchored on two things Respondent’s Human Resource Manager’s letter of 10/11/2021 and the Respondent’s acknowledgement letter to another employee, one ZACHARY MAG ADI ISANDA, dated 11/10/2019. With these, the Claimant made the argument that gratuity was an implied term of the employment contract, and that it was an established custom/practice at the Respondent’s establishment. According to counsel, the Claimant argued that the letter of 10/11/2021, where gratuity was listed among his terminal benefits, legally entitled him to gratuity. He asserts in his submissions that “Because the Respondent acknowledged in writing that gratuity was due upon his resignation, this created an express term or at least an implied contractual obligation.
19. According to Mr. Olao, despite the Claimant’s creative use of words, the letter of 10/11/2021 could not have possibly created an implied contractual obligation for many reasons, least of which was that the purported ‘acknowledgement’ was made after the termination of the employment contract by the Claimant through his letter of resignation of 09/11/2021. For the avoidance of doubt, the Claimant resigned with immediate effect and there was no room to create new terms of engagement post the termination period. It was further contended that even the elements necessary for the creation of a legally binding contract were glaringly absent and the most important of which was a meeting of the minds. At the hearing of the matter, the Respondent’s witness, who was the author of the letter dated 10/11/2021, testified and categorically stated that the inclusion of gratuity in the said letter had been her mistake not the Respondent’s. In this respect counsel quoted the case of Muiri v East Africa Cables Limited 120231KEELRC 3412 (KLR) where the Court, faced with fairly similar circumstances, held thus;
"The separation agreement did not indicate at all that the severance pay was to be computed on 10 years and not 29 years. This much the respondent’s witness admitted. The witness further admitted that the purported computation by the respondent of the claimant’s severance pay was done after the execution of the separation agreement and without the involvement of the claimant. In my view, there was no meetins of the minds on this aspect.” (Emphasis ours)
20. Counsel therefore contended that it was plainly evident that the Respondent could not be held liable to pay Kshs. 4,009,200/= based on an error by its Human Resource Manager in a letter of acceptance of resignation which could not have sufficed to create contractual obligations as between the parties. At any rate, that letter was superseded by the letter of 13/07/2022 which properly tabulated the Claimant’s dues. The letter of 10/11/2021 was a letter of acceptance of resignation and cannot be used to argue an entitlement to gratuity. The Claimant’s argument must fail on that score. Mr. Olao further contended that as was aptly stated by the Court of Appeal in Pathfinder International Kenya Limited v Stephen Ndegwa Mwangi (supra), gratuity must be provided in the contract of employment or provided for in a Collective Bargaining Agreement or a statute before an employee can claim entitlement to the same. The Claimant’s argument that the Respondent had a ‘practice’ of paying out gratuity is therefore neither here nor there.
21. Counsel further urged the Court to bear in mind that ZACHARY MAGADI whose acknowledgment of resignation the claimant was relying on did not resign from the Respondent’s employment while under investigation for unethical conduct and that there were no losses tagged to his name. On the contrary, ZACHARY MAGADI ISANDA, unlike the Claimant, had a mutual separation with the Respondent on quite amicable terms yet the Claimant, admitted to having cost the Respondent at the very least Kshs. 75,000/=, could not use the letter of acknowledgment dated 11/10/2019 to draw parallels between his resignation and that of another employee.
i. Concerning the claim for unpaid salary, counsel submitted that whereas the claimant sought to be paid unpaid salary for November and December, 2021, the letter of tabulation dated 13/07/2022 clearly demonstrated that the Claimant’s salary for the said months was factored into his final dues, the balance of which was paid to Factory Guards Sacco. The veracity of that letter was not challenged by the Claimant. It was therefore evident that the Claimant was paid his salary for the months of November and December, 2022. The Claim for unpaid salary must therefore fail. Counsel similar submitted regarding the claim for unpaid leave stating that the same were tabulated as evidenced in the letter dated 13/07/2022 and paid out after deduction of Kshs. 75,000/= as decided in the meeting of 02/02/2022.
22. Conncerning the counterclaim, counsel submitted that the Respondent's counterclaim against the Claimant was for the loss of Kshs. 6,553,326.96/= and that it was the Respondent’s contention that the said sums were lost through overpayment to NSO Company Limited, including fictitious payments and on the very day the Claimant was suspended to pave wav for independent investigations, he resigned. Further that the said investigations ultimately concluded that the Claimant was culpable. In his testimony, RW1 confirmed that the Claimant had used a billing method and/or system that largely led to overpayment of guards working for NSO. Indeed, in his response to the show cause letter issued regarding the lost sums, the Claimant admitted to one of the three charges levelled against him, denying two.
23. At trial, however, the Claimant walked back on his position, instead denying having lost money through wrong billing. However, the Claimant’s response to Show cause speaks for itself. Coupled with the timing of the Claimant's resignation, it became evident that the Claimant was indeed culpable and in fact resigned to avoid going through the disciplinary process. In this respect counsel relied on the case of Chege v. Timsales Limited (Civil Appeal 29/2020) where it was held that an employee cannot resign to avoid disciplinary action. The Court of Appeal held that;
“Even if we are to accept the appellant’s version that his notice of retirement dated 30th June 2019 was served upon the respondent on 1st July 2019, the notice raises a pertinent question on its validity. The question here is whether an employee seeking to retire, (which is by all means a termination of employment), can wake up and retire without notice to the employer. In our considered opinion, an employee cannot escape the disciplinary process by tendering a resignation or a retirement ‘with immediate effect…The key legal principle here is the need to avoid subverting due process. This is because such a retirement notice can be lawfully disregarded if it is a tactic to escape disciplinary proceedings. (See Supreme Court of India in Mahanadi Coalfields Ltd. Vs. Rabindranath Choubey , [2020] 18 SCC 71).” (Emphasis ours)
24. According to Mr. Olao, the court was faced with the decision whether to hold the Claimant liable or allow the Claimant to escape the consequences of his actions which led to loss of the Respondent's property while coming to court to seek a benefit from the said Respondent. The Respondent had therefore proved its counterclaim on a balance of probabilities and urge the court to so find and order the Claimant to pay back the Respondent all the monies admittedly lost through his negligence and/or misconduct.
DETERMINATION AND DISPOSITION
25. The Court has reviewed and considered the claim, response thereto, documents for and against it, witness testimomies as well as submissions by counsel and has become of the view that there are only two major issues to be determined in this claim, namely:-
a. Whether the claimant is entitled to gratuity
b. Whether the respondent is entitled to judgment on the counterclaim.
26. On the issue whether the claimant is entitled to gratuity, it was common ground and deriving on judicial decisions cited by both counsel that gratuity is not payable as of right. It is either provided for in the contract of employment or at the discretion of the employer as a policy or in appreciation of the service of an employee leaving service. In this particular case, the claimant’s claim for gratuity was based on the fact that in the letter acknowledging his resignation the respondent stated that the payment of his terminal dues would include gratuity at 18% of his basic pay. The respondent however has refuted this allegation for the reason that Legal Notice No. 24 of 1998 provided that an employee who is summarily dismissed for lawful cause, or who terminates his service for reasons other than ill-health or retirement age, shall not be entitled to gratuity and further that the mention of payment of gratuity in the letter acknowledging the claimant’s resignation was a mistake by the Human Resource person who wrote the letter.
27. Legal Notice No. 24 of 1998 invoked by the respondent in its defence is a subsidiary legislation hence an applicable law governing circumstances in which gratuity may be paid. The regulation provided that gratuity is not payable to an employee who terminates his service for reasons other than ill-health or retirement age. The claimant herein terminated his service to the respondent at his own volition and by reason of the fact that he wanted to pursue other interests. The resignation letter was issued by the claimant soon after he had been issued with a show cause letter dated 8th November, 2021 to which he responded on 9th November, 2021 accompanied by a resignation letter dated the same day. In the letter acknowledging his resignation the respondent stated noted and informed the claimant that he resigned while undergoing a disciplinary process. The claimant however responded through a letter dated 14th November, 2021 denying knowledge of the fact that he was under any investigation. This however cannot be true since the show cause letter to the claimant dated 8th November, 2021 to which he responded to the next day, was clear on its face on the allegations against the claimant which included flouting the respondent’s procedures and code of ethics by being involved directly or indirectly in fraudulent cases which were detailed in the letter. The claimant responded in detail to the show cause letter and concurrently therewith tendered his resignation. He did not wait for any further communication over the matter. That is to say whether his response was satisfactory or not. It might not be wrong to deduce that he contemplated the response would be adverse to him so he chose to resign to avoid facing the consequences of the allegations he was accused of.
28. Having observed above that the Legal Notice No. 24 of 1998 was a subsidiary legislation hence a law, a miscommunication thereon cannot be held against a person issuing a communication contrary to its provisions. It is a settled principle that estoppel cannot lie against a law. That is to say a party cannot benefit from an error in implementing a law. Besides as noted above, the resignation by the claimant was circumventive and suspect. In the case of Chege v. Timsales Limited (Civil Appeal 29/2020) cited by counsel for the respondent it was clearly stated by the Court of Appeal that:-
“In our considered opinion, an employee cannot escape the disciplinary process by tendering a resignation or a retirement ‘with immediate effect…The key legal principle here is the need to avoid subverting due process. This is because such a retirement notice can be lawfully disregarded if it is a tactic to escape disciplinary proceedings…”
I cannot agree more. It is plainly clear that the claimant herein did not resign in good faith but to avoid the consequences of the allegations he was accused of. To award him gratuity, I would agree with counsel for the respondent, the court would be thanking him for his alleged fraud which if he was innocent, he could have stayed and defended himself against. The claim for gratuity is therefore rejected.
29. Concerning the counterclaim for Kshs. 6,553, 326.00/=, the Court takes the view that this must be pleaded and strictly proved. The respondent although pleaded that it lost Kshs. 6,553, 326.00/=, did not provide any evidence in support of such loss. The alleged fraud was claimed to have been committed directly or indirectly by the claimnant in collusion with the NSO, a third party. There was no evidence of for instance, audited accounts showing such loss or that the claimant received any of the alleged lost funds. Besides, the actions by the claimant without proof that he received the alleged lost funds was simply an act of either negligence or gross misconduct which warranted summary dismissal. Any action for the restitution of such funds would lie against the NSO and not the claimant. The counterclaim is therefore found unmerited and is hereby dismissed.
30. Concerning the claimant’s terminal benefits, these are hereby ordered to be paid as computed if not paid already less any statutory deductions and or liabilities owed to the respondent.
31. In conclusion the claim and the counterclaim are both found unmerited and are hereby dismissed with each party bearing their own costs.
32. It is so ordered.
Dated at Nairobi this ……… day of…………. 2026
Delivered virtually this……… day of ………….2026
Abuodha Nelson Jorum
Presiding Judge-Appeals Division
| Judgment cause 871 of 2022 |