https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1649

**IN THE COURT OF APPEAL AT NAIROBI** **(CORAM: GATEMBU, ODUNGA, & ONG’UDI JJ.A.) CIVIL APPEAL NO. 178 OF 2020** **BETWEEN** **ISHMAEL OMULA EGALA 1ST APPELLANT** **STEPHEN NDONGA AGADE…………………….…2ND APPELLANT BENSON LUBANG’A OGADA…………………….…3RD APPELLANT NATHAN MUINDE KIMATU… 4TH APPELLANT** **MANASSEH AGANYA OTEGO 5TH APPELLANT** **MARTIN OTIENO OLUNYA 6TH APPELLANT** **GEORGE MAKORI ORINA 7TH APPELLANT** **EVERSE TIBETEGEREZA BWIRE 8TH APPELLANT** **AND** **THE ATTORNEY GENERAL RESPONDENT** *(An appeal against the Judgment of the Employment and Labour Relations Court at Nairobi (Hon. Lady Justice Maureen Onyango) dated 29th November 2019* *in* ***ELRC Cause No. 1255 of 2014 (Formerly*** ***HC Civil Case No. 1412 of 2002 Consolidated with HC Civil Case No. 8 of 2021)*** \*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\* **JUDGMENT OF THE COURT** 1. The appellants who were the plaintiffs in the Employment and Labour Relations Court suit, sued the respondent on behalf of the Public Service Commission vide their plaints dated 6th January 2002 and 20th January 2002. They pleaded that they were each as at 31st August 2000 serving as permanent and pensionable public officers (meteorological assistants) in the Kenya Meteorological Department. This was after being issued with appointment and confirmation letters by the Public Service Commission in form of G.P 24A. 1. The appellants further stated that on 31st August 2000, the Permanent Secretary of the Ministry of Transport and Communication being the authorized officer under the Service Commission Act Cap. 185 of the Laws of Kenya for the Meteorological Department, issued them with retrenchment letters. The appellants appealed against the decision to terminate their services by the Public Service Commission but they were not successful. They therefore, filed the two suits before the superior Court challenging their retrenchment on the ground that the proper procedure was not followed. 2. In the impugned judgment, the learned Judge’s findings were as follows: ***“Conclusion*** ***The claimants are each awarded- Ishmael Omula Egala- 1st Claimant*** * 1. ***Compensation at 3 months’ salary*** ***(21,906.50 x 3) Kshs. 65,719.50*** * 1. ***Exemplary damages Kshs. 500,000.00*** ***Total: Kshs. 565,719.00 Stephen Ndonga Agade – 2nd Claimant*** ***1.Compensation at 3 months’ salary*** ***(25,370 x 3)…………………..……………..Kshs. 76, 110.00*** ***2. Exemplary damages……………………..Kshs. 500,000.00*** ***Total: Kshs. 576,110.00 Benson Lubang’a Ogada – 3rd Claimant*** ***1. Compensation at 3 months’ salary*** ***(15,363.50 x 3)……………….…………….Kshs. 46,090.50*** ***2. Exemplary damages…………….……..Kshs. 500,000.00*** ***Total:Kshs. 546,090.50 Nathan Muinde Kimatu- 4th Claimant*** ***1. Compensation at 3 months’ salary*** ***(18,775.50 x 3)……………….…………….Kshs. 56,326.50*** ***2. Exemplary damages……...….………..Kshs. 500,000.00*** ***Total: 556,326.50*** ***Manasseh Aganya Otego – 5th Claimant*** 1. ***Compensation at 3 months’ salary*** ***(24,864.50 x 3) Kshs. 74, 593.50.50*** 1. ***Exemplary damages………….…………Kshs.500,000.00*** ***Total: Kshs: 574,593.50 Martin Otieno Olunya – 6th Claimant*** ***1. Compensation at 3 months’ salary*** ***(17,148 x 3)………………..………………..Kshs. 51, 444.00*** ***2. Exemplary damages………….…..…...Kshs. 500,000.00*** ***Total:Kshs. 551,444.00 George Makori Orina - 7th Claimant*** ***1. Compensation at 3 months’ salary*** ***(26,615 x 3)……………..……………..…….Kshs. 79,845.00*** ***2. Exemplary damages…….……………..Kshs. 500,000.00*** ***Total: Kshs. 579,845.00 Everse Tibetegereza Bwire – 8th Claimant*** ***1. Compensation at 3 months’ salary*** ***(18,775.50 x 3) Kshs. 56,326.50*** ***2. Exemplary damages…………….……..Kshs. 500,000.00*** ***Total: Kshs.556,326.50*** 1. This aggrieved the appellants provoking the instant appeal. The 17 grounds as set out in the Memorandum of Appeal dated 17th April 2020, can be condensed as follows: 1. ***The learned Judge erred in law in holding that the appellants’ entitlement to damages was governed by the repealed Employment Act (Cap 226) and in consequently applying principles and limitations under that Act, instead of considering the appellants’ employment relationship as governed by the former Constitution, the Service Commission Act (Cap 185 repealed), the Public Service Regulations, their letters of appointment, schemes of service, and applicable common law principles.*** 2. ***The learned Judge erred in law and fact by failing to consider, or adequately consider, the appellants’ pleadings, evidence and submissions demonstrating that public officers were entitled to a minimum twelve*** ***(12) months’ notice before retirement or retrenchment and that such entitlement was neither traversed nor controverted by the respondents.*** 1. ***The learned Judge erred in law by relying on and applying authorities founded on the repealed Employment Act (Cap 226), including Directline Assurance Company Ltd v Jeremiah Wachira Ichaura and Joseph Ileli Kikumbi v Central Bank of Kenya, without appreciating the appellants’ distinct status as public officers and the different legal framework governing their employment.*** 2. ***The learned Judge erred in law and fact by limiting compensation to three months’ gross salary on the basis that the Employment Act, 2007 was inapplicable and by treating damages as compensation only*** ***for a reasonable period of sensitization and preparation for retrenchment, despite having found the retrenchment unconstitutional and unlawful.*** 1. ***The learned Judge erred in law and fact by failing to properly evaluate and apply the appellants’ submissions, evidence and cited authorities regarding the applicable measure of damages, and by adopting the respondents’ submissions and authorities without adequately distinguishing the appellants’ unique circumstances.*** 2. ***The learned Judge erred in principle and in the exercise of discretion in assessing and awarding exemplary damages at Kshs. 500,000 per claimant, thereby applying wrong principles and arriving at an inordinately low award.*** 3. ***The learned Judge erred in law and fact by assessing compensation and exemplary damages on the basis of salaries applicable at the date of retrenchment, without accounting for the lapse of time, inflationary trends, and other relevant factors warranting assessment based on salaries prevailing at the date of judgment.*** 4. ***The learned Judge erred in law by failing to*** ***award interest on the damages awarded and by failing to award interest on costs from 16th June 2003, being the date of interlocutory judgment.*** 1. ***The learned Judge erred in law and fact by failing to award the appellants the costs of the assessment of damages proceedings as a distinct and substantial component of the litigation.*** 2. When the appeal came up for hearing on 17th March 2026, learned counsel Mr. Mwenesi appeared for the appellants while learned counsel Mr. Munene represented the respondent. They both made brief oral highlights of their written submissions at plenary. 1. The appellants’ submissions are dated 25th February 2021 and were filed by the firm of S. Musalia Mwenesi Advocates. Learned counsel submitted that the trial court fundamentally erred by applying the repealed Employment Act (Cap 226) retrospectively to a case that was *sui generis*, involving public officers whose appointment, removal and disciplinary control over public officers was governed by the former Constitution of Kenya**.** Further, that the appellants termination fell under regulation 20 of the Public Service Commission Regulations under the Public Service Commission’s Act (Cap 185) (repealed). 2. He contended that the learned trial Judge failed to take full account of paragraph 16 (w) of the plaint in Civil Case No. 1512 of 2002 and paragraphs 44 to 52 of their submissions. Further, that the learned Judge was influenced by the decision in **Directline Assurance Company Limited v Jeremiah Wachira Ichaura [2016] eKLR** and gave no reasons why she did not favour the appellants’ submissions that the reasonable period of notice was 12 months. He added that the learned Judge erred in relying on the case of **Joseph Ileli Kikumbi v Central Bank of Kenya** (cited in **Directline Assurance Company Limited vs Jeremiah Wachira Ichaura** (supra) yet the appellants had not been given any notice but were ambushed and hounded out of office. 1. He faulted the learned Judge for holding that the measure of damages for breach of contract of employment was the loss the employee incurred during the stipulated period of the termination clause or notice. He stated that the learned Judge did not take full account of the appellant’s uncontroverted and non-traversed pleading at paragraph 18 in the plaint in Civil Case No. 1512 of 2002 (the lead file). 2. Learned counsel further argued that the learned Judge's failure to award a notice period of twelve (12) months was a manifest error of law and fact. He asserted that under the principle of *stare decisis* and established precedents such as the case of **Kenya Revenue Authority v Menginya Salim Murgani [2010] eKLR**, the trial court had the power to determine a reasonable period of notice, which for public officers of their standing ranges from six to twelve months. He asserted that their claim for a twelve-month notice period was an uncontroverted pleading that the respondent failed to traverse in their defense. 1. He placed reliance on the decisions in **Raghbir Singh Chatte v National Bank of Kenya Limited [1996] eKLR** and **Choitram v Nazari [1984] KLR 327 at 339**. Furthermore, he argued that the failure of the respondent to respond to specific factual allegations in the petition required the Court to accept the said factual positions as uncontroverted. He urged the Court to be guided by the cases of **John Murethii Kiagayu v Hon. Attorney General [2013] eKLR** and **Rumba Kinuthia vs Attorney General Nairobi HCCC 1408 OF 2004**. 2. Regarding the quantum of damages, learned counsel submitted that the learned Judge only relied on the authority cited by the respondent (**Kenya Bus Services Limited v Meleksadik Okutoi Civil Appeal No. 145 of 1998**) and failed to consider inflation while awarding damages. Further, that if the same was considered, then the 3 months’ wages pegged at August 2000 rates were manifestly low in the year 2019. He cited the decision in **Ali v Muhozozo [1983] KLR 602 at 605** and submitted that Judges must account for the effect of inflation when determining appropriate awards. He further cited the cases of **D.K. Njagi Marete v Teachers Service Commission [2020] eKLR** and **Mariga v Musila [1984] KLR 251** and argued that the appellants are entitled to twelve months’ pay and compensation for the loss of economic value. 1. Learned counsel also challenged the inadequacy of the exemplary damages awarded, asserting that the learned Judge was too lenient and merciful to the respondent (government). He argued that the trial Judge’s reluctance to award higher exemplary damages was influenced by the case of **Benedict Munene Kariuki &14 others v The Attorney General [2013] eKLR,** and so he failed to deter the government from harming citizens and violating Article 28 of the Constitution of Kenya, 2010, regarding human dignity. He cited the case of **CPC Industrial Products Ltd v Angima Civ. App. No. 197 of 1992**, where a twelve-month salary award served as punishment for an oppressive employer. Further, that in the case of **Marete v Attorney General [1987] KLR 690** an exemplary damages award equivalent to 100 months' salary was considered relevant. He thus urged the Court to allow the appeal as prayed. 1. The respondent’s submissions are dated 16th March 2026 and were filed by Martin Munene, a state counsel. He identified four issues for determination and submitted that the trial court's judgment was legally sound and should not be disturbed. 2. The first issue, is whether the trial Judge applied the correct principles in awarding three months’ gross salary as damages for unlawful termination. Learned counsel asserted that the trial Judge correctly applied the law by making the said award rather than the twelve months requested by the appellants. He placed reliance on the decisions in **Butt v Khan [1978] KECA 24 (KLR)** and **Kemfro Africa Ltd t/a “Meru Express Services (1976)” & Another v Lubia & Another (No.2) [1985] KECA 137 (KLR)** and submitted that an appellate court should only intervene if the trial Judge applied wrong principles, considered irrelevant factors, or if the award is so inordinately low or high. 3. He cited the decisions in **Directline Assurance Company Limited versus Jeremiah Wachira Ichaura [2016] eKLR** and **Securicor Courier (K) Limited v Benson David Onyango & Another [2008] KECA 349 (KLR)**. He thus argued that the measure of damages must be limited to the notice period specified in the contract or a reasonable period required to terminate it lawfully. He further cited the case of **Joseph Ileli Kikumbi versus Central Bank of Kenya 2012 eKLR** and **Kenya Bus Services Ltd v Gituma (2004) 1 EA 91**, where this Court held that damages for wrongful dismissal are limited to the salary an employee would have earned during the notice period. It was his argument that the rationale behind that principle is that employment contracts are contracts of service and damages must be confined to compensation for breach rather than speculative future earnings. He added that the appellants’ claim arose from the Employment Act 2007, which introduced statutory remedies including compensation of up to twelve months’ salary. 4. The second issue is whether the learned Judge erred in awarding exemplary damages of Kshs. 500,000/= per claimant. Learned counsel argued that the trial Judge exercised considerable caution in awarding the said award. He placed reliance on the case of **Godfrey Julius Ndumba Mbogori & Another v Nairobi City County [2018] eKLR** which cited the landmark case of **Rookes v Barnard [1964] AC 1129**, and submitted that Courts have consistently emphasized that exemplary damages should be awarded cautiously and in modest amounts. He added that enhancing the award to such high levels as sought by appellants would undermine the established principles governing damages and would unjustifiably be a burden to the public purse. 1. Learned counsel asserted that the trial Judge’s award of Kshs. 500,000 per claimant was lawful and proportionate, whereas the appellants' demand for Kshs. 2,000,000/- is excessive and unsupported by precedent. He further asserted that the appellants were reinstated and paid salary arrears and so the government’s conduct was not oppressive. That the trial Judge actually exercised significant judicial restraint and caution in making the award. He argued that exemplary damages are intended to punish and deter rather than compensate and are strictly reserved for categories such as oppressive or unconstitutional government action. 1. The third issue is whether the learned Judge erred in awarding interest and costs. Learned counsel submitted that the award of interest and costs was a proper exercise of judicial discretion under Section 26 of the Civil Procedure Act. He stated that the said section vests the Court with the authority to determine the appropriate rate and commencement date for interest. Citing the case of **Supermarine Handling Services Ltd v Kenya Revenue Authority [2010] KECA 373 (KLR)**, he argued that an appellate court will only interfere with such discretion if it was exercised injudiciously or on wrong principles. He added that the appellants have failed to demonstrate any improper exercise of this discretion, and therefore, there was no legal basis for appellate intervention. 2. This is a first appeal. **Rule 31(1)(a)** of the **Court of Appeal Rules, 2022** provides as follows: ***“(1) On an appeal from a decision of a superior court acting in the exercise of its original jurisdiction, the Court shall have power—*** 1. ***to re-appraise the evidence and to draw inferences of fact;*** 2. ***…”*** 3. Further, our mandate is stated in the case of **Neepu Auto Spares Limited v Narendra Chaganlal Solanki & 3 others [2014] KECA 383 (KLR)** as follows: ***“Being a first appeal, we must re-evaluate the evidence and come to our own conclusions, but always bearing in mind that we did not hear the witnesses nor observe their demeanour. We may only interfere with the findings of the trial Judge if the Judge failed to take into account particular circumstances or based his impression on demeanour of witnesses which was inconsistent with the evidence – see the judgment of this court in Maimuna s/o Patrick Mutoo v Wilson Njau Nyaki Civil Appeal No. 131 of 1994. In Peters v Sunday Post Limited [1958] EA 424 it was held that while an appellate court has jurisdiction to review the evidence to determine whether the conclusions of the trial Judge should stand this jurisdiction is exercised with caution; if there is no evidence to support a particular conclusion, or if it is shown that the trial Judge has failed to appreciate the weight or bearing of the circumstances admitted or proved, or has plainly gone wrong, the appellate court will not hesitate to so decide.”*** 1. Upon carefully considering the grounds of appeal, the record of appeal, the rival submissions and the authorities relied upon, we are of the view that the following issues arise for determination: 2. ***Whether the applicable law was the repealed Employment Act (Cap 226) or the*** ***Employment Act, 2007.*** 1. ***Whether the learned trial Judge erred in law and in fact in failing to properly consider and give effect to the claimants’ pleadings, evidence and submissions.*** 2. ***Whether the learned trial Judge erred in law and in fact in applying wrong principles in the assessment of damages by limiting compensation to three (3) months’ salary as a reasonable preparation period, rejecting the claim for twelve (12) months’ notice, and improperly confining damages to a notice- period measure despite the retrenchment having been declared unlawful and unconstitutional.*** 3. ***Whether the learned trial Judge erred in law and in fact in the overall assessment of relief by awarding inadequate exemplary damages, failing to account for delay and inflation and failing to award interest on damages, interest on costs from the date of interlocutory judgment, and costs of the assessment proceedings.*** 4. Regarding the first issue, we wish to address ourselves first on the question of the trial court applying the law retrospectively against the backdrop of the well-known principles of law that legislation is deemed to apply prospectively unless of course the legislation provides for its retrospective application. The appellants contend that this misapplication of the law ignored the fact that their terms of service explicitly bound them to regulations for officers of the Public Service of Kenya, and not the private-sector focused limitations of the repealed Employment Act. 5. The learned trial Judge in the impugned judgment held as follows; ***“On the issue of how much the Claimants are entitled to; the applicable law is the Repealed Employment Act which was in force at the time of their retrenchment. The law does act retrospectively…….”*** 1. The law is settled that statutes are presumed to operate prospectively unless Parliament expressly provides otherwise. The Employment Act, 2007 contains no provision granting it retrospective effect. To the contrary, Courts have consistently held that the Act created new rights, obligations and remedies which were unknown under the repealed Employment Act and therefore cannot be applied to employment relationships that had terminated before its commencement. In **National Social Security Fund Board Trustees & Others vs Central Organization of Trade Union (K) [2015] eKLR**, the Court held as follows; ***“We have no hesitation in addition in upholding that once an Act of Parliament is repealed it ceases to exist completely unless the Repealing Act provides otherwise and that the repealed law cannot form an order of mandamus…”*** 1. Further, the issue of retrospective application of statutes was settled by the Supreme Court in the case of **Samuel** **Kamau Macharia and Another vs. K.C.B & 2 Others [2012] eKLR** where it was held as follows; ***“As for non-criminal legislation, the general rule is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or evidence are prima facie prospective, and retrospective effect is not to be given to them unless, by express words or necessary implication, it appears that this was the intention of the legislature. (Halsbury’s Laws of England, 4th Edition Vol 44 at p 570).”*** 1. In the instant Appeal, there is no dispute that the appellants' employment was terminated through retrenchment before the commencement of the Employment Act, 2007. The latter statute came into force on 2nd June 2008 through Legal Notice No. 61 of 23rd May 2008. The appellants' cause of action had therefore accrued before the enactment and commencement of the said Act. In **Gerald Muli Kiilu v Barclays Bank of Kenya Ltd [2016] KECA 641 (KLR)**, this Court held that the **Employment Act, 2007** does not have retrospective application and that causes of action arising before its commencement are governed by the repealed Employment Act. The Court stated that the appellant's employment having been terminated in 2005 the cause of action was governed by the repealed Employment Act, Cap 226 and the repealed Trade Disputes Act Cap 234 through the saving provisions in the new laws that replaced them. The Court further stated that it was wrong for the appellant to base his claim on the new laws and seek remedies that were not available in the repealed laws. 1. Similarly, in the case of **Kiambu Unity Finance Co- operative Union Ltd v Warwathe & Another [2024] KECA 663 (KLR)**, this Court noted that the employment contract between the appellant and the respondents were entered into on 18th September 1989 and 2nd January 1992 and were terminated on 30th October 2004. The Court held that at the time the said contracts were entered into, the applicable law was the Employment Act, Cap 226. It was further held that the Employment Act, 2007 did not have any provisions providing for its retrospective application. Additionally, that the said Act could not apply retrospectively because it created rights, obligations and liabilities that did not exist under contracts governed by the repealed Employment Act, Cap 226. 2. The same principle was applied in **Mary Wakhabubi Wafula v British Airways PLC [2015] KECA 354 (KLR)**, where this Court held as follows; ***“All that said, then, is to say that this Court only has jurisdiction to award the remedies available at the time of the wrongful dismissal or unfair termination, that is, when the cause of action arose. These are the remedies that are provided for under the repealed Employment Act, Cap 226, Law of Kenya and the repealed Trade Dispute Act, Cap 234, Law of Kenya.”*** 1. More recently, in the case of **Taabu v Nairobi Evangelical Graduate School of Theology [2025] KECA 1737 (KLR)**, this Court noted that the appellant was dismissed summarily by a letter dated 9th August 2006 and therefore, it could not be disputed that the applicable law at the time was the repealed Employment Act, Cap 226 and not the Employment Act, 2007. The trial Judge’s decision to grant only the damages which were provided for under the law the applicable then, was upheld. 2. Guided by the law and the authorities cited above, we are satisfied that the learned Judge correctly held that the applicable law was the repealed Employment Act, Cap 226 which was the law in force at the time the appellants were retrenched. In our view, the Employment Act, 2007 could not be invoked to confer rights or remedies that did not exist at the time the cause of action accrued. Accordingly, the appellants' claims had to be determined exclusively under the provisions of the repealed Employment Act since any reliance on the provisions of the Employment Act, 2007 by the learned Judge would amount to an impermissible retrospective application of the statute. 1. Consequently, we find no error in the learned Judge's conclusion that the repealed Employment Act, Cap 226 governed the appellants’ claim and that the Employment Act, 2007 was not applicable. 2. On the second issue as to whether the appellants’ pleadings, evidence and submissions were properly considered, the record demonstrates that the learned Judge identified the issues arising from the pleadings and rendered findings supported by reasons. In the case of **Daniel Toroitich Arap Moi vs. Mwangi Stephen Muriithi & Another [2014] eKLR** this Court held as follows: ***“Submissions cannot take the place of evidence. The 1st respondent had failed to prove his claim by evidence. What appeared in submissions could not come to his aid. Such a course only militates against the law and we are unable to countenance it. Submissions are generally parties’ “marketing language”, each side endeavouring to convince the court that its case is the better one. Submissions, we reiterate, do not constitute evidence at all. Indeed, there are many cases decided without*** ***hearing submissions but based only on evidence presented.”*** 1. In view of the above, it is our finding that a trial court is not under a duty to reproduce every submission or piece of evidence in its judgment so long as the judgment shows that the court addressed the issues in controversy and arrived at a reasoned determination. It is trite law that an appellate court will not interfere with findings of fact by a trial court unless it is shown that the court acted on no evidence, misapprehended the evidence, considered irrelevant matters, failed to consider relevant matters, or arrived at a plainly wrong conclusion. No such error has been demonstrated before us. See **Mbogo & Another vs Shah [1968] EA at 15**. 2. The third issue is on assessment of damages. The appellants argued that the learned Judge's failure to award a notice period of twelve months was a manifest error of law and fact. That she never understood their arguments based on the uncontroverted pleading that the said period of notice was in order. 3. It was the trial Judge’s finding that the appellants were not entitled to 12 months’ compensation since the current Employment Act was not applicable to their situation. She proceeded to award them compensation equivalent to 3 months’ gross salary. In the case of **Kenya Revenue Authority & 2 others v Darasa Investments Limited [2018] eKLR (Civil Appeal No. 24 of 2018)** this Court held as follows: ***“The Court ought not to interfere with the exercise of such discretion unless it is satisfied that the Judge misdirected himself in some matter and as a result arrived at a wrong decision, or that it be manifest from the case as a whole that the Judge was clearly wrong in the exercise of discretion and occasioned injustice.”*** 1. **Section 49 (1)** of the [**Employment Act**](https://new.kenyalaw.org/akn/ke/judgment/kesc/2023/112/new.kenyalaw.org/akn/ke/act/2007/11/eng%402024-04-26)**, 2007** provides for remedies for wrongful dismissal and unfair termination as follows; 1. ***Where in the opinion of a labour officer summary dismissal or termination of a contract of an employee is unjustified, the labour officer may recommend to the employer to pay to the employee any or all of the following —*** 1. ***the wages which the employee would have earned had the employee been given the period of notice to which he was entitled under this Act or his contract of service;*** 2. ***where dismissal terminates the contract before the completion of any service upon which the employee's wages became due, the proportion of the wage due for the period of time for which the employee has worked; and any other*** ***loss consequent upon the dismissal and arising between the date of dismissal and the date of expiry of the period of notice referred to in paragraph (a) which the employee would have been entitled to by virtue of the contract;*** * + 1. ***the equivalent of a number of months wages or salary not exceeding twelve months based on the gross monthly wage or salary of the employee at the time of dismissal.*** 1. Further, **Section 49 (4)** of the said Act provides as follows; 2. ***A labour officer shall, in deciding whether to recommend the remedies specified in subsections (1) and (3), take into account any or all of the following—*** 1. ***the wishes of the employee;*** 2. ***the circumstances in which the termination took place, including the extent, if any, to which the employee caused or contributed to the termination; and*** 3. ***the practicability of recommending reinstatement or re- engagement;*** 4. ***the common law principle that there should be no order for specific performance in a contract for service except in very exceptional circumstances;*** 5. ***the employee’s length of service with the employer;*** 6. ***the reasonable expectation of the employee as to the length of time for which his employment with that employer might have continued but for the termination;*** 7. ***the opportunities available to the employee for securing comparable or suitable employment with another employer;*** 8. ***the value of any severance payable by law;*** 9. ***the right to press claims or any unpaid wages, expenses or other claims owing to the employee;*** 10. ***any expenses reasonably incurred by the employee as a consequence of the termination;*** 11. ***any conduct of the employee which to any extent caused or contributed to the termination;*** 12. ***any failure by the employee to reasonably mitigate the losses attributable to the unjustified termination; and any compensation, including ex gratia payment, in respect of termination of employment paid by the employer and received by the employee; and*** 13. ***any compensation, including ex gratia payment, in respect of termination of employment paid by the employer and received by the employee.*** 3. In **Ken freight (EA) Limited v Benson K Nguti SC Pet No 37 of 2018 [2019] eKLR** this court explained the applicability of the provisions of **section 49** as hereunder; ***“…..What then should the correct award on damages be based on? Having keenly perused the provisions of section 49 of the*** [***Employment***](https://new.kenyalaw.org/akn/ke/judgment/kesc/2023/112/new.kenyalaw.org/akn/ke/act/2007/11/eng%402024-04-26)[***Act***](https://new.kenyalaw.org/akn/ke/judgment/kesc/2023/112/new.kenyalaw.org/akn/ke/act/2007/11/eng%402024-04-26)***, we have no doubt that once a trial court finds that a termination of employment as wrongful or unfair, it is only left with one question to determine, namely, what is the appropriate remedy? The Act does provide for a number of remedies for unlawful or wrongful termination under Section 49 and it is up to the Judge to exercise his discretion to determine whether to allow any or all of the remedies provided thereunder. To us, it does not matter how the termination was done, provided the same was challenged in a court of law, and where a court found the same to be unfair or wrongful, section 49 applies….”*** 1. In the instant appeal, the trial Judge made an award equivalent to 3 months gross salary at the time of termination which to her, would have been a reasonable period for them to be sensitized and prepared for their retrenchment, had the right procedure been followed. She declined to award compensation based on the twelve-month period as provided under the Employment Act, 2007 on the ground that the said Act did not apply to the appellants’ case. We do not find this to have been a misdirection of law as we note that an award of compensation for unfair termination under **section 49(1)(c)** of the Employment Act, 2007 is discretionary. 1. Looking at the said section, we note that it only provides for a maximum limit of twelve months’ gross salary and does not create an automatic entitlement to the maximum award. In exercising that discretion, the Court is required under section 49(4) of the Employment Act, 2007 to consider the circumstances of each case. Section 50 of the Act further obligates the court to take into account the factors enumerated under section 49(4) in exercising that discretion. Consequently, we find that the learned Judge expressly considered the circumstances surrounding the termination and specifically that the appellants had been reinstated and their salary arrears paid. Therefore, the learned Judge cannot be said to have acted outside the statutory parameters. 1. We further find no basis for interfering with the rejection of the claim for twelve (12) months’ salary and as earlier stated, the Employment Act does not guarantee the maximum award merely because termination is found to be unfair. The appellants bore the burden of demonstrating circumstances warranting the maximum compensation, which burden was not discharged. 2. In the end, we are not persuaded that the learned Judge misdirected herself either in law or fact, or that the award of three (3) months’ salary was so manifestly low as to warrant this Court’s interference. Additionally, this Court would have considered the issue of further compensation had the appellants filed a cross-appeal. However, no such appeal was filed. 3. The last issue is on the award of exemplary damages. The appellants contended that the exemplary damages awarded were inadequate. They argued that the respondent’s conduct of ignoring the reinstatement orders for over ten years warranted a much higher punitive award. From the record it is apparent that the appellants’ retrenchment was unlawful and Ojwang, J and Mwera, J ordered for reinstatement. In the impugned judgment, the learned trial Judge awarded the appellants exemplary damages in the sum of Kshs. 500,000/= each. This was to compensate them for the delay by the Public Service Commission to reinstate them to their former positions and for the suffering they underwent for over 7 years before their reinstatement. 1. It is now trite that the assessment of damages is a matter peculiarly within the discretion of the trial court, and an appellate court will not interfere merely because it would itself have awarded a different figure. Interference is only warranted where the trial court acted upon a wrong principle of law, took into account irrelevant considerations, failed to consider relevant matters, or where the award is so inordinately low or high as to represent an entirely erroneous estimate. 2. In the case of **Obonyo and Another v Municipal Council of Kisumu** (supra) at 94 where the predecessor of this Court, referring to the decision in **Rookes v Barnard and Others (1964) AC 1129** held as follows: ***“It will be convenient to begin summarizing very briefly the effect of Rookes v Barnard. In the first place, it was held that exemplary damages for tort may only be awarded in two classes, of case (apart from any case where it is authorized by statute, these are first, where there is oppressive, arbitrary or unconstitutional action by the servants of the government (emphasis in original) and secondly where the defendant’s conduct was calculated to procure him some benefit, not necessarily financial, at the expense of the plaintiff. As regards the actual award, the plaintiff must have suffered as a result of the punishable behavior, the punishment imposed must not exceed what would likely have been imposed in criminal proceedings if the conduct were criminal; and the means of the parties and everything which aggravates or mitigates the defendant’s conduct is to be taken into account.”*** 1. In the present matter, the learned Judge expressly appreciated the punitive character of exemplary damages and considered the nature of the respondent’s conduct. We are unable to discern any misdirection in principle therefore, the award of Kshs. 500,000/= cannot by any objective standard be said to have been so inordinately low as to justify appellate interference. Further, the complaint that the learned Judge failed to factor delay and inflation is unpersuasive. It is evident from the court record that the learned Judge considered all relevant circumstances before arriving at the impugned award. The appellants have not demonstrated that the court ignored any material factor or that the resulting award occasioned a wholly erroneous estimate of damages. 1. With respect to interest, it is settled that the award of interest, including the date from which it should run, is a matter within the discretion of the trial court, to be exercised judicially and in accordance with the applicable procedural rules and in the interest of justice. In the case of **South Nyanza Sugar Company Limited v Oreko (Civil Appeal 138 of 2017) [2022] KECA 570 (KLR)** this Court held as follows; ***“…The objective for awarding interest is to ameliorate the loss suffered by a party who has been kept out of use of money that would otherwise be due to him. Although, by dint of the words of Section 26, the grant of interest is discretionary, it is a discretion to be exercised judiciously. One way of proper exercise of this discretion is to make an award that is in consonance with the underlying objective for which an order of interest is made…”*** 1. We reiterate that an appellate court will not interfere unless that discretion was exercised capriciously or upon wrong principles. We find no such error here. The learned Judge was entitled to decline interest from the date of the interlocutory judgment and instead order interest from the date of the impugned judgment. 1. Equally, the issue of costs, including costs of assessment proceedings, lies within the discretion of the trial court. In the case of **Supermarine Handling Services Ltd v Kenya Revenue Authority [2010] eKLR**, this court held as follows: ***“Costs of any action or other matter or issue*** ***shall follow the event unless the court or Judge shall for good reason otherwise order. It is well established that when the decision of such a matter as the right of a successful litigant to recover his costs is left to the discretion of the Judge who tried his case, that discretion is a judicial discretion, and if it be so its exercise must be based on facts. If, however, there be, in fact, some grounds to support the exercise by the trial Judge of the discretion he purports to exercise, the question of sufficiency of those grounds for this purpose is entirely a matter for the Judge to decide, and the Court of Appeal will not interfere with his discretion in that instance. “Costs of any action, cause or other matter or issue shall follow the event unless the court or Judge shall for good reason otherwise order.” It is trite law that the issue*** ***of costs is a discretionary one that is awarded*** ***to a successful party. Furthermore, this discretion must be exercised judiciously and a party cannot be denied costs unless it can be shown they acted unreasonably.”*** 1. In light of the above cited authority, the general rule that costs follow the event is not inflexible and a court may, for good reason, depart from it. Nothing has been placed before us to show that the learned Judge exercised that discretion injudiciously or upon improper considerations. 1. Accordingly, we find no basis upon which this Court may properly interfere with the trial court’s exercise of discretion in the award of damages, interest and order as to costs. 2. We therefore find no merit in this appeal and the same is dismissed. Each party to bear its own costs. 3. Orders accordingly. **Dated and delivered at Nairobi this 31st day of July, 2026** **S. GATEMBU. KAIRU, FCIArb, C.Arb** **….………………..………….** **JUDGE OF APPEAL** **G.V. ODUNGA** **……………….…………… JUDGE OF APPEAL** **H. I. ONG’UDI** **…………………………. JUDGE OF APPEAL** *I certify that this is the true copy of the original* *signed* ***DEPUTY REGISTRAR***