https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1693

Olaka v Mibrinesh Investments (Employment and Labour Relations Appeal E211 of 2025) [2026] KEELRC 1693 (KLR) (19 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1693 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Appeal E211 of 2025 NJ Abuodha, J June 19, 2026 Between Benson Willingtone Olaka Appellant and Mibrinesh Investments Respondent (Being an Appeal against the Judgment of D. Milimu (SPM), in Thika MCELRC E029 of 2022; Benson Willingtone Olaka vs Mibrinesh Investments which was delivered on 23rd June 2025 at Nairobi) Judgment 1.Through the Memorandum of Appeal dated 7th July, 2025, the Appellant appeals against the judgment and decree of the Hon. D. Milimu (SPM) delivered on 23rd June 2025. 2.The Appeal was based on among other grounds that the trial magistrate erred by holding that the actions of the Respondent to summarily dismiss the Appellant from employment were lawful and thus did not amount to unlawful and unfair dismissal. That the trial court erred in not awarding the Appellant his terminal dues and awarding him half costs despite proving his case on balance of probabilities. 3.The Appellant prayed that the Appeal be allowed with costs and the trial court’s judgment delivered on 23rd June 2025 be set aside in its entirety. 4.The Respondent filed a response to memorandum of appeal, dated 26th November 2025 where they prayed that the appeal in its entirety be dismissed with costs and that the judgment and decree of the Honourable Diana Milimu delivered on 23rd June 2025 in Thika MCELRC No. E029 of 2022 be upheld. 5.The Appeal was disposed of by written submissions. Appellant’s Submissions 6.The Appellant’s Advocates Olaka & Company Advocates filed written submissions dated 3rd December, 2025. Counsel relied on the case of Selle & Another V. Associated Motor Boat Co. (1968) E.A 123 on the duty of the first appellate court and on the issue of whether or not the Appellant was unlawfully and unfairly terminated from employment counsel relied on section 43 of the Employment Act on proof of reasons for termination failure of which the termination would be deemed unfair under section 45 of the Act. Further reliance was placed on the case of Daniel Kiplagat Kipkeibut v Smep Deposit Taking Micro Finance Limited (2016) eKLR cause No 213 of 2015 where failure to prove reason of termination amounted to unfair termination. Counsel also relied on section 35 of the Act on termination notice and submitted that the Appellant was dismissed without notice and that summary dismissal could only be effected if an employee was found guilty of misconduct within the meaning of section 44 of the Act. 7.It was submitted that in the present case, the Appellant was accused of stealing on 10th March 2022, forced into an impromptu meeting, his co-accused colleagues intimidated and threatened into implicating him and he was dismissed from employment on the same day. 8.On the fair hearing counsel relied on section 41 of the Act which provides for fair hearing before termination even where the employer has a valid reason for terminating the service of an employee and further the case of Walter Ogal Anuro V Teachers Service Commission [2013] KEELRC 386 (KLR) Cause 955 of 2011 which emphasised the need for both substantive and procedural fairness before termination. 9.Counsel further relied on the case of Osire v Mega Pack (K) Limited [2023] KEELRC 1504 (KLR) Cause 66 of 2018 on procedural fairness and adherence to natural justice in termination of employment. Counsel highlighted that the Appellant, after the incident of 10th March 2022, was not given a written notice to show cause letter indicating the offenses he was accused of and adequate period to respond to the same. The Appellant was asked to write a report, which he did and the same was dated 10th March 2022 in which he categorically stated that he was innocent of any wrongdoing. It was submitted that there was no evidence before the lower court, other than the Respondent’s word, that the Appellant was given any written notification of the outcome of the notice to show cause and invited to a disciplinary hearing that supposedly took place on 10th March 2022. 10.Counsel submitted that the Respondent averred that they issued him on 10th March 2022, the same date of the incident, with a verbal notice to show cause and a verbal invitation for a disciplinary hearing scheduled for the same day. It was therefore admitted that he was not given any time to prepare his defence. In fact, the Respondent’s witnesses termed the meeting of 10th March 2022 as an impromptu meeting, not a disciplinary hearing and confirmed that the Appellant was never issued with a written invitation to a disciplinary hearing containing the offenses he was accused of and time and venue of the hearing; evidence against him was never supplied to him; and the witnesses were never disclosed to him and their testimonies given to him in advance to allow him prepare his defence. Further, the Appellant was never informed of his right to be accompanied on the hearing by any other person of his choice. 11.Counsel cited among other cases the case of Michael Odhiambo Opiyo v Bidco Africa Limited [2021] eKLR Cause 2559 of 2016 to support their submissions on the above set out the principles of the natural justice and the right to fair hearing and the requirement for sufficient time to prepare a defence. 12.It was submitted that under minute 6 of the minutes of the purported disciplinary hearing produced before the court and on cross-examination, it was evident that witnesses were threatened during the purported disciplinary hearing, and as a result, they implicated the Appellant saying that he was involved in their schemes to steal. Counsel submitted that a fair hearing could not be achieved through threatening witnesses to achieve a pre-determined outcome. That was the very definition of a violation of the natural justice principles. 13.Counsel stated that courts have equally held that a hearing was not merely technical appearance before a disciplinary panel, but the person conducting the hearing should explain to the employee the nature of the allegations, call in evidence showing the truthfulness of the allegations and if witnesses are called, the employee ought to be allowed to question the witnesses. Evidence contained in documents which were relied on by the employer must also be produced and the employee in question must also be granted an opportunity to state his case, ask questions, adduce evidence and call witnesses, if any. 14.It was submitted that the Appellant was not accorded any of the above prior to termination of his employment thus was never given a fair hearing. Counsel relied on the case of Kenya Union of Commercial Food and Allied worker’s vs Meru north Farmers Sacco Limited cause No. 74 of 2013 where it was stated that the process provided under s. 41 was mandatory before terminating employment. This was reiterated in the cases of Ol Pejeta Ranching Limited v David Wanjau Muhoro [2017] eKLR. 15.It was submitted that the conduct of the Respondent violated the Appellant’s Constitutional right to fair administrative action under article 47; and under Section 4(3) and 4(4) of the Fair Administrative Action Act no 4 of 2015. 16.On the issue of whether the Appellant was entitled to the reliefs sought before the lower court, counsel submitted that the Appellant having been terminated from employment unlawfully and unfairly was entitled to 12 months’ loss of earnings pursuant to Sections 49 (1) (c) and 50 of the Act. Counsel further submitted that the Appellant had a legitimate expectation to continue working for the Respondent and to future earnings and since his dismissal was abrupt and unfair he was entitled to a 12 months’ salary in damages to the tune of Kshs. 172,800/= 17.In this respect, Counsel relied on the case of Kenya Broadcasting Corporation vs George Wakio Civil Appeal 352 of 2017. Counsel submitted that the Appellant was also entitled to general damages for the loss he suffered for failing to be allowed to serve for the period provided for in the termination clause. To support this submission, counsel cited the case of Kenfreight (E.A.) Limited v Benson K.Nguti [2016] eKLR Civil Appeal No. 31 of 2015. It was further submitted that considering that the Appellant was never issued with a written termination notice, a fact that was confirmed by the Respondent’s witnesses, he was entitled to a statutory one-month salary as compensation (Kshs. 14,400/=) pursuant to Section 36 of the Employment Act. 18.On the issue of unpaid salary for February, 2022 and 10 days worked in March, 2022 (Kshs. 20,400/=), Counsel submitted that that this was the only award that the trial learned magistrate granted, and so the Appellant was entitled to the same. 19.Counsel submitted that the Appellant worked for three full years without taking his leave days and as such he was entitled to 63 leave days as per clause 5 of his employment contract, which translated to Kshs. 37,800/= as unpaid leave days. On service pay, counsel submitted that having worked more than three whole years, the Appellant was entitled to service pay equivalent to 21 days’ salary multiplied by the total number of complete years worked which amounted to Kshs. 37,800/=. 20.It was submitted on non-remittance of NSSF & NHIF, that since the commencement of the Appellant’s employment with the Respondent in September, 2018, the Respondent deducted a sum of Kshs. 400/= every month from the Appellant’s salary but did not remit the same for September, October, November and December 2018, and January, February and march of 2022. That he was therefore entitled to a refund of the unremitted statutory deductions of Kshs. 2,800/=. Respondent’s Submissions 21.The Respondent’s Advocates Nyambura Mwangi & Company Advocates filed written submissions dated 28th January 2026 and on the issue of whether the Appellant was unlawfully and unfairly terminated from employment counsel submitted that the Appellant was employed as a General Worker-Dispatch which entailed loading and off-loading goods. That the Appellant on 10th March, 2022 while in his line of duty was involved in theft of luggage in particular Bahari Fry 121 try pack which was later found inside the motor vehicle where the Appellant was conducting his duties and this amounted to gross misconduct. In so submitting, counsel relied on clause 10.2 of the Human Resource Manual and Clause 8(b)(c)(d) of the Employment contract which provided for the definition of gross misconduct and when an employee is liable for gross misconduct and was to be summarily dismissed. That these provisions were a replica of section 44(c)(d) of the Employment Act and that the Appellant did not perform his duties as required resulting in to loss of the Respondent’s property. 22.Counsel submitted that the Appellant did not explain why the item was in the lorry before clearance by the supervisor and why he failed to immediately report the irregularity to his supervisor. That the Appellant’s summary dismissal was substantively fair and justified as the conduct of the Appellant on 10th March, 2022 depicted misconduct, negligence and wilful breach of duties amounting to gross misconduct befitting a summary dismissal. 23.On the procedural fairness counsel submitted that the Appellant did not raise the issue of the alleged insufficient notice before disciplinary proceedings at the lower court hence he could not raise the same at this stage as the Respondent could not give his defence on the same. 24.Counsel confirmed that the hearing took place on 10th March, 2022 but relied on section 44 (1) of the Act which provided that an employee can be summarily with no notice or less notice. Counsel relied on section 41 of the Act on procedural fairness and submitted that the disciplinary hearing complied with the provisions of section 41 as the Appellant was explained in a language he understood the reasons for the termination of his service, he appeared with Evans Wanjala and Elijah Owino and the Respondent heard and considered the representations which the Appellant had on the grounds of misconduct. Counsel relied on the case of Modern Mail Limited v Omolo(2025) KEELRC 1043 (KLR) concerning the value of minutes in related disputes and that fair hearing was an all-encompassing principle. 25.Counsel submitted that a keen read of the provisions of section 41 does not mandate an employer to issue written notice, invitation to a disciplinary hearing or written charge letter in instances of summary dismissal. That a written response from the employee should be submitted as per the above case as demonstrated by minute 9 of the Minutes. The Appellant was therefore afforded a fair hearing. 26.Counsel submitted that should the Appellant have been dissatisfied with the hearing, an immediate recourse was available in the grievance and appeal mechanism in the Respondent’s HR Manual (Clause 18). In this regard, counsel relied on the case of Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others [2019] eKLR, to submit that the reasons that cause the termination of employment of an employee were those it reasonably believed to exist causing it to terminate the employee’s service. 27.On the issue of whether the Appellant was entitled to the reliefs sought, counsel submitted that the Appellant failed to exhaust the grievance and appeal mechanisms in the Respondent’s HR Manual before filing the claim which went against Article 159(2)( c) of the Constitution on promotion of ADRs while relying on the case of Imwatok(MCA) v Nairobi City County & 7 others; Attorney General & Another (Interested Parties)(Civil Appeal 300 of 2018) (2024) KECA 509 (KLR ) (26 April 2024 (Judgment). According to counsel therefore, the case was prematurely filed hence fit for dismissal. 28.On the employment tenure, counsel submitted that the Appellant in his claim alleged that he was employed in 2018 but during cross examination he signed employment contract on 12/10/2021 which would end on 30/4/2022. In the submissions he however alleged that he was employed in 2006 yet submissions were not pleadings and in this regard relied on the case of Mohammed Fugicha vs Methodist Church in Kenya (Suing through its registered trustees) & 3 Others (2016) eKLR where it was stated that parties are bound by their pleadings. 29.Counsel submitted that the Appellant shifting his tenure of employment presented an afterthought calculated to defeat the ends of justice. Counsel relied on section 10(2)(d) and (e) of the act on written contracts and section 10(7) of the act where the burden of disproving alleged term would be on employer. That the Respondent provided the Appellant’s written contract which showed that the Appellant’s employment ran from 12th October, 2021 to 30th March, 2022 hence discharging its burden under section 10(7). 30.On the salary for February and 10 days of March 2022 counsel submitted that the Appellant’s monthly salary was Kshs. 14,400/= and not Kshs 15,000/=. For 10 days worked in March 2022 the Appellant would be paid Kshs 6,000/= hence the total unpaid salary due was therefore Kshs. 20,400/-. 31.Counsel submitted specifically that the claim for salary in lieu of notice should be dismissed as Section 44 of the Employment Act permitted summary dismissal with little or no notice where gross misconduct was involved; the claim for leave accrued should also be dismissed as the Claimant was employed from 12th October 2021 to 10th March 2022 i.e for less than a year, hence under Section 28(1) of the Employment Act annual leave had not accrued; the claim for pension and service pay should be dismissed as the Claimant was a member of NSSF pursuant to Section 35(5) and (6) of the Act; and the claim for NHIF contributions should be dismissed for failure to plead non-remittance and the same were first raised at submission stage. Counsel submitted that the Claimant’s certificate of service was ready for collection. Determination 32.The court has considered the grounds of appeal, the record of appeal and submissions filed by the both parties herein and notes that the Judgment of the trial court was that the trial court dismissed the Appellant’s claim while finding that the summary dismissal was fair both procedurally and substantively hence amounting to lawful termination of employment. The Claimant was awarded only salary for February and 10 days of March 2022 salary amounting to Kshs 20,400/= and a certificate of service. The Claimant was further awarded half costs of the suit and interest. 33.The Appellant was aggrieved by the above judgment and fronted four grounds of Appeal which this court will merge into two main issues namely: -i.Whether the trial court erred in finding that the Appellant’s summary dismissal was lawful and whether it did or not amount to unfair and unlawful termination.ii.Whether the trial court erred by not awarding the reliefs sought by the Appellant. Whether the trial court erred in finding that the Appellant’s summary dismissal was lawful and whether it did or not amount to unfair and unlawful termination 34.The employment contract produced by the Respondent showed that the Appellant had a fixed term contract of between 12th October, 2021 to 30th April, 2022 and he was terminated on 10th March, 2022 before his contract ended on account of theft. 35.The courts have always held that for termination to pass fairness test there should be both substantive and procedural fairness. This court is guided by the holding in Janet Nyandiko versus Kenya Commercial Bank Limited (2017) eKLR among others. On the issue of substantive test, the employer must give a fair and valid reason as per section 43 of the Employment Act. Section 45 of the Employment is clear that where there is no valid and fair reasons, such termination is unfair. Section 44 of the Employment Act, 2007 stipulates when summary dismissal can occur in particular breaches under Section 44(4) (g) of the Employment Act, warrant summary dismissal on grounds of gross misconduct and especially in a case where one is charged with a criminal offence and in the loss of property belonging to the employer. 36.The Respondent claimed that the Appellant was summarily dismissed for theft particularly of Bahari Fry 121 try pack found on the motor vehicle where he was working and which occurred on 10th March, 2022 and that his colleagues confirmed the incident. The Appellant denied taking part in the said theft and in his written response he stated that someone else put the stolen property in the motor vehicle. The Respondent faulted the Appellant for not reporting when the item was placed on the motor vehicle. 37.It was the Appellant’s allegations that the witnesses were threatened to implicate him and there being no evidence implicating the Appellant such as CCTV evidence this court finds the reason for termination not properly proved. There were no investigations carried out to implicate the Appellant in the theft. In this respect, the court is guided by the case of Pius Machafu Isindu v Lavington Security Guards Limited [2017] eKLR, the Court of Appeal stated:“There can be no doubt that the Act, which was enacted in 2007, places a heavy obligation on the employers in matters of summary dismissal (Emphasis mine) for breach of employment contract and unfair termination involving breach of statutory law. The employer must prove the reasons for terminating (section 43) – prove that the grounds are justified (section 47 (5), among other provisions. A mandatory and elaborate process is then set up under section 41 requiring notification and hearing before termination.” 38.From the forgoing, this court disagrees with the trial court and finds that the said reason was never proved by the Respondent and the court aquo erred in holding that the respondent had valid grounds for terminating the appellant’s service. This ground of appeal therefore succeeds. 39.On the procedural fairness as provided for under section 41 of the Employment Act, the court notes that the same was never adhered to as the Respondent never issued any show cause letter to the Appellant on the issue of the theft, the Appellant was never invited for any disciplinary hearing and the said disciplinary hearing, if considered one, was improtu meeting held on the same date the Appellant was charged therefore never gave him time to respond to the accusations against him and call witnesses if any. 40.The court emphasises that disciplinary hearing is not just for formality and that an employee must know the charges against him or her, be explained to in a language he or she understands the accusations against them and if invited to a disciplinary hearing, given an opportunity attend with a colleague of his choice and be given enough time to prepare. Irrespective of the offence committed by an employee the right to be heard is paramount before termination hence the Respondent violated the clear provisions of section 41 of the Act. In this respect, the court is guided by the holding in the case of Kenya Union of Commercial Food and Allied Workers v Meru North Farmers Sacco Limited [2014] eKLR where it was stated that: -Section 41 of the Employment Act is couched in mandatory terms. Where an employer fails to follow these mandatory provisions, whatever outcome of the process is bound to be unfair as the affected employee has not been accorded a hearing in the presence of their union representative. 41.In conclusion this court disagrees with the trial court decision that the Appellant’s termination was both substantively and procedurally lawful and fair and finds that the same was wrongful hence unfair. Whether the trial court erred by not awarding the reliefs sought by the Appellant 42.This court having found that the Appellant was unfairly terminated proceeds to assess the amount of compensation he is entitled to as a result of unfair termination of his service. In this regard, section 49(4) of the Employment Act serves as a guide. The Appellant had a fixed term contract which was due to expire in April, 30th 2022. He was terminated three weeks short of his contract on allegations that were never proved against him and further that in carrying out his termination. The claimant being on a fixed term contract, had no guarantee that his contract would be renewed. In that regard an award of two months’ salary as compensation would be sufficient in the circumstances. The Appellant was entitled to one month notice pay since he was terminated without notice and the same was not paid in lieu of notice. 43.The court also upholds the salary for February and 10 days in March awarded by the trial court. On leave pay since the Appellant had not completed 12 months, he is not entitled to leave pay. Service pay does not apply where an employee is a member of NSSF and NHIF hence the court agrees with the trial court on this claim. 44.On the NSSF and NHIF remittances it was only in the month of February it was not remitted and as observed by the trial court the same was considered in the February pay hence cannot be claimed. 45.In the upshot the Appeal succeeds with costs to the Appellant while upholding the February and March 2022 salaries as follows: -a.2 months’ salary as compensation for unfair termination Kshs 28,800/=b.Notice pay……. Kshs 14,400/=c.February and March 2022 salary Kshs 20,400/=Total 63,600/= 46.It is so ordered. DATED AT NAIROBI THIS 19TH DAY OF JUNE, 2026DELIVERED VIRTUALLY THIS 19TH DAY OF JUNE, 2026ABUODHA NELSON JORUMPRESIDING JUDGE-APPEALS DIVISION.