Cheruo & another v Milenium Cinemax Limited (Appeal E252 of 2025) [2026] KEELRC 1304 (KLR) (18 May 2026) (Judgment)

Cheruo & another v Milenium Cinemax Limited (Appeal E252 of 2025) [2026] KEELRC 1304 (KLR) (18 May 2026) (Judgment) Neutral citation: [2026] KEELRC 1304 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Mombasa Appeal E252 of 2025 M Mbarũ, J May 18, 2026 Between Jacob Naibei Cheruo 1st Appellant Patrick Mutunga Muli 2nd Appellant and Milenium Cinemax Limited Respondent (Being an appeal from the judgment of Hon. G. Sogomo delivered on 21 November 2025 in Mombasa CMELRC Cause No. E289 of 2023) Judgment 1.The appeal arises from the judgment delivered on 21 November 2025 in Mombasa CMELRC No. E289 of 2023. The appellants, aggrieved by the judgment, have filed the appeal on three (3) grounds:1.The learned magistrate erred in law and fact in finding that the termination of the appellant's employment by the respondent was lawful and in compliance with section 41 of the Employment Act despite the respondent failing to issue a show cause letter to the appellant and failing to prove that the appellant attended any disciplinary meeting.2.The learned magistrate erred in law and fact in failing to consider the appellants’ evidence and the circumstances leading to their dismissal, which proved on the balance of probabilities that they were not accorded a fair hearing before being dismissed from work.3.The learned magistrate erred in law and fact in failing to award the appellants' terminal dues and costs of the suit, having been unlawfully dismissed from work by the respondent. 2.The appellants seek that the judgment of the trial court be set aside and that the claims be assessed with an award of costs. 3.The background of the appeal is a claim filed by the appellants against the respondent. Their case was that the 1st appellant was employed as a cinema attendant on 2 January 2013 and that this was confirmed on 1 March 2014. The 2nd appellant was employed as a clearer on 6 October 2016 and confirmed on 1 November 2019, earning Ksh. 22,521 per month. The work site was Nyali Cinemax in Mombasa. The appellants worked until 10 October 2022, when their employment was terminated by the director, Dipan Shah, in contravention of due process. On 1 October 2022, two customers arrived late at the movie theatre, and the 1st appellant asked the 2nd appellant to assist them into the theatre hall. The 1st appellant was sent to deliver food in the respondent’s residential home using the motor bike. When he returned, he noted receipt of Ksh. 1,430 in his phone number could not immediately confirm the payment. The manager, Lawrence, called him to his office and accused him of colluding with the 2nd appellant to steal from customers and failing to submit the same to the respondent. On 3 October 2022, the 1st appellant reported to work but was sent away. On 10 October 2022, he was called to the office, summoned, forced to name an alleged accomplice, and then his employment was terminated without warning. 4.On his part, the 2nd appellant’s case was that on 1 October 2022, 10 customers came to the movie theatre and said that two others would arrive later. He left two tickets for them. He later allowed them into the movie hall. On 3 October 2022, he was called by the manager and sent away. He reported back on 10 October 2022 when his employment was terminated without due process. 5.The applicants’ claim was that employment was terminated unfairly and unlawfully. In October 2020, to May 2022, they had a salary deduction of Ksh. 15,000 which is due. They claimed the following:1.1st appellant:a.Notice pay Ksh, 22,521b.Unpaid salary for September 2022, Ksh. 22, 251.c.Unpaid salary for 1o days in October 2022 Ksh. 7,507.d.Salary arrears from October 2020 to May 2022 for 19 months, Ksh. 142,899.e.10 years' unpaid leave Ksh. 157,647.f.12 months competition Ksh 270,252.g.Service pay for 10 years Ksh. 112,605.1.2nd appellant:a.Notice pay Ksh, 22,521b.Unpaid salary for September 2022, Ksh. 22, 251.c.Unpaid salary for 1o days in October 2022 Ksh. 7,507.d.Salary arrears from October 2020 to May 2022 for 19 months, Ksh. 142,899.e.5 years' unpaid leave Ksh. 58,823.f.12 months competition Ksh 270,252.g.Service pay for 5 years Ksh. 56,302.50.The appellants claimed for costs and interest on their awards. 6.In reply, the respondent denied the claims and that the 1st appellant’s employment commenced through a letter dated 1 March 2014, earning a wage of Ksh. 12,000 per month. The 2nd appellant was employed on 1 November 2019, earning ksh. 15,650 per month. Employment was terminated following a fundamental breach of the employment contract. Under company policy, customers should pay for services through the company-registered toll numbers and not through employees’ personal numbers. The 1st appellant fraudulently caused money from a customer to be set directly to this phone, contrary to company policy. The 1st appellant did not accidentally receive Ksh. 1,430 as alleged. When the respondent became aware of his conduct, an inquiry was conducted, and he admitted that a customer had sent him money to his personal phone number, and he wrote a letter of apology with the details. He was summoned for a meeting on 3 December 2022, and the indictment was discussed; he apologized for his conduct. The 1st appellant was aware of allowing customers into the theatre without receipts, and the 2nd appellant was aware that receipts had not been issued since money was received through a personal phone number, contrary to the policy. Upon deliberations and admission with an apology, the respondent lawfully terminated employment, and the claims should be dismissed with costs. 7.The learned magistrate heard the parties and found that there were justified grounds for terminating the employment. The claims were dismissed with no orders on costs, save for unpaid wages at Ksh. 2,666.67.On the appeal, only the appellants attended and filed written submissions. 8.The appellants submitted that the trial court erred in failing to evaluate the evidence before it and that employment had terminated unlawfully and unfairly. There was no hearing conducted before the termination of employment, nor was any notice to show cause issued to the appellants by the respondent, as held in Galgalo Jarso Jillo v Agricultural Finance Corporation [2021] eKLR. Before employment can be found to have been earned fairly, the due process under section 41 of the Employment Act (the Act) should be adhered to. Such procedures are mandatory as held in Josephine M Ndungu & others v Plan International Inc. [2019] eKLR. 9.The appellants submitted that the trial court erred in failing to assess each claim on the merits. The lapse in undertaking the due process dictated that notice pay and compensation be awarded, together with salary arrears and unlawful deductions, with costs.The claims should be reviewed and reassessed with costs. Determination 10.As this is a first appeal, the court may review the record, reassess the findings, and render its conclusion. However, take into account that the learned magistrate had the chance to hear the witnesses and observe them during the hearing. 11.Through a notice dated 5 October 2022, the respondent terminated the employment of the appellants on the basis that the 1st appellant had defrauded a client by transferring sales to his personal M-Pesa number instead of the company pay bill number, as shown in a screenshot. Hence, the respondent had lost faith and trust in him, leading to the termination of employment. 12.The 2nd appellant's employment was terminated following a disciplinary hearing on 3 October 2022. They were found to have used fake receipts to allow two clients into the movie hall, which was captured on CCTV, and the clients sent a photo of the same. Hence, the respondent had lost faith in them due to a lack of trust and credibility. These were the grounds leading to the termination of employment with effect from 5 October 2022. 13.The appellants maintain that employment was terminated without due process, that no notices to show cause were issued, and that no disciplinary hearing was conducted pursuant to section 41 of the Act. 14.Part of the records filed by the respondent in response were letters from the appellants explaining their conduct regarding events on 1 October 2022. The 1st appellant wrote an apology letter on 3 October 2022, noting that he had received Ksh. 1,340 from a client, and it had taken time for him to realise that it was a client who had sent the money to his phone number. He regretted the offence and asked for forgiveness. According to his apology letter, he thought he was playing games. … it was my first time. It will never happen again. … 15.The 2nd appellant was also noted to have participated in fraudulent transactions, including allowing clients into the cinema hall without payment or using fake tickets. A client shared the communications and the payment due to the 1st appellant, which was facilitated by the 2nd appellant. 16.Under section 44 of the Act, the employer is entitled to sanction summary dismissal where the employee is found to be in breach of the employment contract due to gross misconduct. Section 44(3) and (4) allow termination of employment summarily where the employee fails to adhere to the fundamental conditions of the employment contract. 17.In this case, the 1st appellant was found to have committed fraud by receiving funds from clients via his phone, contrary to the established policy, while the 2nd appellant was found to have facilitated the fraud by issuing fake tickets to clients. Under section 44(4) of the Act, this conduct allows for summary dismissal as held in Postal Corporation of Kenya v Tanui [2019] KECA 489 (KLR). 18.The 1st appellant admitted his gross misconduct and asked for an apology. This allowed the respondent the chance to issue an appropriate sanction. A show-cause notice or hearing upon the admissions of gross misconduct was not necessary. However, the respondent was magnanimous and invited the appellants for a disciplinary hearing on 3 October 2022. This was in adherence to the provisions of section 41(2) of the Act. See Ngugi & 3 others v Board of Management Kenya Hospital Association t/a Nairobi Hospital & another [2026] KEELRC 489 (KLR) 19.The court finds that, on the standards of section 43 of the Act, the termination of employment was fair and lawful. 20.In this case, the Respondent has brought evidence to demonstrate that it genuinely believed that the appellants were guilty of serious misconduct and hence it has met the burden of justifying the grounds of termination required under Section 47 (5) of the Act. The admission of the 1st appellant and the records submitted by the clients confirm that the appellants were of gross misconduct as held in Kenya Revenue Authority v Reuwel Gitahi & 2 others [2019] KECA 300, that: 21.The standard of proof is on a balance of probability and not beyond a reasonable doubt, and all the employer is required to prove are the reasons that it genuinely believed to exist, causing it to terminate the claimant’s services. That is a partly subjective test. 22.The learned magistrate analysed the evidence and the law well and reached a correct finding. These are affirmed.On the claims, notice pay and compensation are not available.On the unpaid salary, these were assessed properly. 23.The claim for salary arrears accrued as at May 2022. The claim was filed in May 2022. As a continuing injury, this ought to have been addressed within the provision of section 89 of the Act, which is couched in mandatory terms. 24.In support of the claim for unpaid leave days, the respondent produced records showing the appellants took annual leave when due.Service pay is claimed; however, the respondent's payment statements show evidence of statutory payments. 25.Accordingly, the appeal is without merit and is hereby dismissed. The respondent did not attend, and therefore, no orders on costs for the appeal. DELIVERED IN OPEN COURT AT NAIROBI, THIS 18TH DAY OF MAY 2026M. MBARŨJUDGEIn the presence of:Court Assistants: Catherine, Kemboi and Omar……………………………………………… and…………………………………..…………..