The appeal arises from the judgment delivered on 25 March 2025 in Mombasa MCELRC No. E551 of 2024.
The appellant is aggrieved by the judgment on the basis that the learned magistrate erred in law and fact in failing to establish that there was no employment relationship between the appellant and the 1st respondent, who never accepted the employment offer by the appellant. The 1st respondent never interacted with the appellant before the circumstances that led to the claim.
Other grounds of appeal are that the employment contract between the respondents came to an end on 24 March 2024. This was after the 2nd respondent had engaged the 1st respondent in 2023.
The trial court failed to consider the main issue of the suit between the appellant and the 1st respondent, which was whether the employment relationship had been established between the 1st respondent and the appellant. The award of maximum compensation at Ksh. 840,000 was excessive and not justified.
The background to the appeal is a claim filed by the 1st respondent against the appellant and the 2nd respondent. The claim was that the 2nd respondent employer hired her in 2022 as a sales officer earning Ksh. 70,000 per month, exclusive of commissions and other emoluments, at the time of departure on 24 March 2024. She was then referred to the appellant for recruitment as an outsourcing agent on behalf of the 2nd respondent. The appellant proceeded to offer the 1st respondent her employment through a letter dated 3 April 2023 for the position of business development officer, commencing on the same day for a term of 6 months. She executed it, returned, and was prepared to report to work on 8 April 2024 as directed. However, on 5 April 2024, the appellant, under the instructions of the 2nd respondent, unfairly terminated the employment without due process. There was no show cause notice or adherence to section 41 of the Employment Act (the Act). By referring to the 1st respondent as an outsourcing agent, the 2nd respondent knew this to be false, leading to unfair termination of employment.
The 1st respondent claimed the following from the appellant and the 2nd respondent;
- An order of reinstatement.
- Notice pay Ksh.70, 000.
- 12 months’ compensation Ksh. 840,000.
- Leave days for 2023 Ksh.70, 000.
- Pay for the remainder of the contract Ksh.420, 000.
- Severance pay for 2 years Ksh.70, 000.
- Unpaid commissions Ksh.100, 000.
- 3 days worked in April 2024 Ksh. 8,077.
- Damages for the shock of losing employment.
- Unreserved apology in line and style as the dismissal letter.
- Costs of the suit.
In reply, the appellant denied the claims and denied that the 1st respondent was referred for recruitment. The appellant provides labour services to the 2nd respondent. It offered the 1st respondent employment through a letter dated 3 April 2024. She was required to sign the letter of offer and return it with the necessary documents by 5 April 2024, but she failed to do so. She also failed to turn up for the intended employment. Employment did not take place. There was no employment between the parties. The claims made cannot be issued against the appellant.
The 2nd respondent did not attend or file a response.
The learned magistrate heard the parties and held that constructive dismissal can be inferred from the conduct of the employer and relied on the case of Coca Cola East & Central Africa Limited v Maria Kagai Liganga [2015] eKLR, and hence held that the appellant failed to adhere to the due process in terminating the 1st respondent''s employment, leading to unfair termination of employment. The trial court awarded maximum compensation of 12 months'' gross salary.
The appellant submitted that the employment relationship between the 1st respondent and the 2nd respondent ended on 24 March 2024, and at that point, there was no connection between the appellant and the 1st respondent. The 1st respondent alleged that she had been offered employment by the appellant through a letter dated 3 April 2024 for six months and was preparing to report on 8 April 2024, but that the appellant terminated her employment without notice or due process.
The appellant denied ever employing the 1st respondent, explaining that although an offer letter had been issued, it required her to sign and return it along with several mandatory documents, such as her certificate of good conduct, HELB and CRB clearances, NHIF, NSSF, KRA PIN, and certified academic certificates by 5 April 2024. The respondent failed to comply, and thus, the offer was revoked before acceptance, meaning no employment relationship was formed.
The appellant challenges the trial court’s finding of unfair termination, arguing that the court erred in law and fact by failing to determine whether an employment relationship existed. Relying on Section 2 of the Employment Act, the appellant submits that a contract of service arises only where there is a valid offer, acceptance, and consideration. The appellant relied on the case of Stanley Mungai Muchai v National Oil Corporation of Kenya (2012) eKLR, where it was held that only a contract of service, as opposed to a contract for service, qualifies for the statutory protections provided under employment laws. This distinction is emphasised in the definitions of “employee,” “employer,” and “contract of service” as set out in the Employment Act, 2007 and the Industrial Court Act, 2011.
In Charles Mwirigi Miriti v Thananga Tea Growers Sacco Limited & Another (2014) eKLR, the Court of Appeal affirmed that a valid contract must include offer, acceptance, and consideration. The appellant in this case maintains that these elements were absent. It was the 1st respondent’s duty to prove that she had accepted the offer. In Anne Wambui Ndiritu v Joseph Kiprono Ropkoi & Another (2005) 1 EA 334, the Court of Appeal emphasised that the burden of proof lies with the party asserting a claim under Section 107 of the Evidence Act.
The appellant also relied on Vincent M. Kimwele v Diamond Shield International Limited [2018] KEHC 5957 (KLR), where it was held that there must be an offer and acceptance for the formation of a legally binding contract as established in Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ. Since the respondent in this case neither communicated acceptance nor submitted the required documents, no consensus ad idem (meeting of the minds) occurred, and thus no contract existed.
In the case of Joseph Munene Murage v Salome Ndungu [2019] KEELRC 1660 (KLR), which affirmed that claims of unfair termination must fail if an employment relationship is not proven. In this case, the trial court’s failure to first establish whether such a relationship existed rendered its finding of unfair termination and award of Kshs. 840,000 erroneous.
The appellant concluded that the offer letter did not result in employment, as it was revoked before acceptance. Consequently, no contract existed to terminate, and the award of 12 months’ salary was baseless, given that the offer was for only six months. The appellant prays that the appeal be allowed, the judgment and decree of the lower court be set aside, and the claim be dismissed with costs, including costs of this appeal.
The 1st respondent submitted that she filed a claim after her employment was unfairly and unlawfully terminated on 5 April 2024. She contends that she had accepted the employment offer sent by the appellant on behalf of the 2nd respondent. The appellant’s argument that she never accepted the offer is unfounded. The 1st respondent received the offer on 3 April 2024, signed and returned it, and the appellant acknowledged receipt the same day before issuing a revocation email at 17:37 hours, citing changes in the staffing structure. The content of that email confirmed that she was already an employee and that her termination was not due to failure to sign the offer, but rather because of alleged restructuring. Evidence from Ms Gathoni also confirmed that the 1st respondent was employed and that the revocation was due to a variation in the number of employees required by the 2nd respondent. The 1st respondent, therefore, maintains that she was validly employed as of 3 April 2024, and her termination was unlawful.
The 1st respondent submitted that, despite being on probation, she was entitled to procedural fairness under Section 41 of the Employment Act, as confirmed in the case of Monica Munira Kibuchi & 6 others v Mount Kenya University; AG (Interested Party) [2021] eKLR, where the court held that excluding probationary employees from procedural safeguards is unconstitutional.The revocation of her appointment without notice or a hearing violated due process.
In this case, the purported reason for terminating the 1st respondent, which was restructuring, was neither substantiated nor genuine. In Akubu v County Secretary, County Government of Meru & 4 others [2023] KEELRC 2863 (KLR), the court held that revocation of an appointment by the employer amounts to termination of the petitioner’s employment. The employee should therefore be heard before termination.
The respondent further submitted that the alleged changes in staffing structure amounted to redundancy. In Msa ELR No. 249 of 2013, Stephen Karisa Jefwa v Elsek & Elsek (K) Ltd, the court held that redundancy must comply with Section 40 of the Employment Act, which requires a written notice to both the employee and the labour officer. Failure to do so renders termination unfair.
In Kenya Union of Domestic, Hotels, Educational Institutions & Hospitals Workers v Mombasa Sports Club [2014] eKLR, the court held that the law requires an employer to demonstrate that the reasons for declaring redundancy are both valid and fair, and that they arise from the employer’s operational needs. In this case, the respondent’s redundancy notice dated 16 November 2013 cited financial losses and high expenditures as the basis for closing the kitchen facility. It was therefore the respondent’s duty to prove that these reasons were genuine, fair, and connected to its operational requirements.
In Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, the court held that the Employment Act requires employers to notify both the union and the Labour Officer of any planned redundancies. Although the Act is silent on consultations, the ILO Termination of Employment Convention of 1982, ratified by Kenya, adds that employers must also engage trade unions in consultations before retrenchments. Under Article 2(6) of the Constitution, this Convention forms part of Kenyan law. Therefore, beyond notification, employers must also consult with unions and relevant authorities.
Regarding reliefs, the respondent relies on Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, where the court held that unlawful termination causes significant hardship and warrants damages.
on costs, the respondent argues that costs follow the event and the appellant has not demonstrated any valid ground to disturb the trial court’s judgment. Therefore, the 1st respondent prays that the appeal be dismissed with costs, asserting that it is an abuse of court process and devoid of merit.
Determination
This is a first appeal. The court is required to review the record, reassess the trial court findings and make a conclusion. However, consider that the trial court had the chance to hear and see the witnesses in court.
It is common cause that the 2nd respondent employed the 1st respondent until 24 March 2024.
It is also not in dispute that through the letter of offer dated 3 April 2024, the appellant offered the 1st respondent employment to commence the same day. She was to accept the offer and submit various documents.
The appeal is that the 1st respondent did not submit the offer acceptance, the necessary documents, or attend work as required. The 1st respondent asserts that she was prepared to report to work on 8 April 2024, but on 5 April 2024, her employment was terminated without due process.
Indeed, paragraph (5) of the Memorandum of Claim states:
The 1st respondent [the appellant] indeed proceeded and offered the claimant a letter of offer dated 3rd April 2024 for the Position of Business Development Officer that was to commence on the same date for a period of six (6) months.
The 1st respondent did not take up the employment offer. She did not report to work on 3 April 2024 as directed by the offer letter. She filed the acceptance of the offer letter dated 5 April 2024. The appellant has filed an offer letter that the 1st respondent did not accept.
The employment relationship was not actualised. There was no employer-employee relationship between the appellant and the 1st respondent.
The trial court''s findings that there was constructive dismissal were not pleaded. No evidence was called to claim under such a concept as held in Kenya Shell Limited v Benjamin Karuga Kibiru & another [1986] KECA 94 (KLR) that constructive dismissal must be pleaded and proved by a claimant seeking to rely on such a matter. See Poa Link Services Co. Ltd & another v Sindani Boaz Bonzemo [2021] KEELRC 2012 (KLR) that constructive dismissal must be specifically pleaded and proved.
Without an employment relationship accruing between the parties, the claims for an order of reinstatement do not arise. Notice pay and compensation cannot occur where the 1st respondent failed to take up the offer of employment or report to work to offer her labour to the appellant.
No damages accrued for what the 1st respondent considered to be her shock, loss, and damage after failing to take up the offer of employment by the 1st respondent.
In conclusion, there was no particular claim against the 2nd respondent. It was not necessary to enjoin such a party to the suit.
Accordingly, the appeal is with merit and is allowed. The judgment in Mombasa CMELRC No. E551 of 2024 is set aside. The appellant is awarded costs.
Delivered in open court at Mombasa, this 23rd day of October 2025.
M. MBARŨ
JUDGE
In the presence of:
Court Assistant: Japhet
……………………………………………… and ………………….………………………
'