https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2409

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **CAUSE NO. E680 OF 2021** **STEPHEN JOHN RICHARD FRANCE CLAIMANT** *VERSUS* **CHRONICLE GROUP INTERNATIONAL LIMITED RESPONDENT** **JUDGMENT** The Claimant was employed by the Respondent under a contract dated 16 March 2015 as the Chief Operating Officer, earning a gross monthly salary of USD 3,000.00. The claim is that on 28 February 2016, the Respondent abolished the claimant's position, thereby bringing his employment to an end. Upon cessation of his employment, it was agreed that the Respondent would pay outstanding salary arrears amounting to Kshs. 2,046,565.57. However, despite the agreement, the Respondent failed to pay. Thereafter, the parties entered into negotiations and executed a Deed of Settlement dated 25 March 2021. Under the terms of the settlement, the Respondent acknowledged the debt and undertook to pay the sum of Kshs. 2,046,565.57 in four equal monthly instalments of Kshs. 511,641.39 each, commencing on 31st May 2021. The claim is that the Respondent refused to honour the terms of the Deed of Settlement by failing to make the agreed instalment payments. The Deed provided that, upon default and failure to remedy the same within seven days after notice, the entire outstanding balance would become immediately due and payable together with interest at the rate of 12% per annum. The claim is that, due to the acts of the Respondent, the claimant has suffered financial hardship and emotional suffering, and that these have adversely affected his family, who depend on him. The claimant is seeking the following: 1. *Judgment against the Respondent for the sum of KShs. 2,046,565.57;* 2. *Interest on (a) above at the rate of 12% per annum from 31 May 2021 until payment in full as prayed for in the Deed of Settlement dated 25 March 2021;* 3. *Costs of this suit.* In reply to the Respondent’s Response, the Claimant maintains that the Deed of Settlement dated 25 March 2021 was voluntarily negotiated and executed by both parties following discussions aimed at amicably resolving the dispute over his terminal dues. The Claimant further reiterates the terms of his contract of employment dated 16 March 2015, stating that he diligently discharged his duties as the Respondent's Chief Operating Officer until 28 February 2016 when his position became untenable following a breakdown in the parties' working relationship. Following the Respondent's default in honouring the Deed of Settlement, he duly served a notice of breach in accordance with the terms of the agreement, but the Respondent failed to remedy the default. In evidence, the Claimant testified that he resigned from his employment by mutual consent; however, he did not have a letter of resignation. He signed the Deed of Settlement and the contract of employment with the Respondent's Chairman, which the Respondent failed to honour and to pay the terminal dues. In response to the Claim, the Respondent denied the employment relationship. That the Claimant was never an employee and no employment contract was entered into between the parties. The Respondent disputes the authenticity of the letter of appointment dated 16 March 2015, denying that it was executed by its Chairman or any authorised officer, and contends that the document is fraudulent. The Respondent further denies that the Claimant was appointed as its Chief Operating Officer, served in that capacity, or earned the salary pleaded. Hence, it denies any liability for the alleged terminal dues claimed. The Respondent also disputes the validity and enforceability of the Deed of Settlement dated 25 March 2021. The settlement was procured through the Claimant's non-disclosure and misrepresentation of material facts, particularly the alleged existence of an employment relationship between the parties. The Deed of Settlement was executed under a mistaken belief that the Respondent had lawfully employed the Claimant and would not have been entered into had the facts been disclosed. No notice was issued alleging a breach of the Deed of Settlement, nor was a valid demand served. The Respondent does not owe the Claimant Kshs. 2,046,565.57 or any other amount and maintains that there was no privity of contract or employment between the parties capable of giving rise to the claim. The claim should be dismissed with costs. The Respondent did not call any witnesses. **Determination** On the pleadings, evidence and submissions, the issues which merge for determination are whether there was an employment relationship between the parties and whether the Claimant is entitled to the reliefs sought. The claim is founded on a contract of employment dated 16 March 2015 by which the Respondent appointed the Claimant as the Chief Operating Officer at a monthly salary of $3,000.00. The claimant testified that he served until 28 February 2016, when the Respondent abolished his position, and both parties mutually agreed to enter into a Deed of Settlement dated 25 March 2021, for payment of Kshs. 2,046,565.57. The Claimant relied on documentary evidence to establish the existence of an employment relationship with the Respondent. He produced documents: 1. contract of employment dated 16 March 2015, 2. a copy of P9 KRA tax Deduction Card stamped by the Respondent, 3. immigration entry permit application, and 4. the Deed of Settlement dated 25 March 2021. The Respondent, on his part, denied the employment relationship and that the contract of employment was fraudulent. It also denied that its Chairman executed the contract. Although the Respondent filed a Statement of Response raising allegations of fraud and denying the employment relationship, it elected not to call any witness in support of those allegations. It is trite that pleadings are not evidence and allegations of fraud must not only be specifically pleaded but must also be proved, as held in **Vijay Morjoria v Nansingh Madhusingh Darbar & Another (2000) eKLR**. Although Pleadings are the bedrock upon which all the proceedings derive, the evidence in support of the given facts must be through affidavits or call of witnesses. Otherwise, the pleadings remain empty, as held in **Kenfreight (Ea) Limited v Reibel SA [2026] KEHC 7485 (KLR).** It hence follows that any evidence adduced in a matter must align with the pleadings. Therefore, any evidence, however strong, that tends to be at variance with the pleadings must be disregarded in the case of **Independent Electoral and Boundaries Commission & Ano. v Stephen Mutinda Mule & 3 others (2014) eKLR.** Without evidence, pleadings become bare. See **Spring Valley Machinery Services Limited v Njuguna [2026] KEHC 1913 (KLR).** The burden of proving fraud rests upon the party making the allegation. In **Ndolo v Ndolo (2008) 1 KLR**, the Court held that allegations of fraud must be proved to a standard higher than a balance of probabilities, though not beyond reasonable doubt. Similarly, in **Urmila w/o Mahendra Shah v Barclays Bank International Ltd & Another [1979] KLR**, the Court held that the onus of proving fraud lies upon the party alleging it. In this case, while the Respondent pleaded fraud, it called no witnesses and tendered no evidence to substantiate those allegations. The assertions contained in the Statement of Response therefore remained mere allegations incapable of displacing the documentary evidence produced by the Claimant. The employment contract forms a primary record of employment under section 10(3) of the Employment Act (the Act). Under such record, further support is given through the reduction and remittance of statutory payments under P9 Form to KRA. The court finds there was an employment relationship between the parties. Under it, the claimant is entitled to payment for work done. Pursuant to sections 17 and 18 of the Act, whatever reason(s) led to termination of employment, the employee must be paid for days worked. On the Deed of Settlement dated 25 March 2021, the response that it was fraudulently procured has no basis. As outlined above, for work done, the employee is entitled to the earnings thereof under the Act. The Deed Agreement was essentially about how to pay Kshs. 2,046,565.57 owed to the claimant by the respondent. This was not paid as agreed. The Respondent contends that the Deed was procured through material non-disclosure and misrepresentation. However, no evidence was called to support such responses. There was nothing to challenge the evidence by the claimant. Parties to a contract of employment are at liberty to terminate the relationship by mutual agreement, as held in **Muyiwa Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd & Another (2016) ZACC 33.** In **Max Masoud Roshankar & Another v Sky Aero Limited [2015] eKLR**, the court held that termination of employment may be effected by mutual consent of the contracting parties, just as an employee may resign or an employer may terminate employment in accordance with the contract. Therefore, where parties elect to terminate an employment relationship by mutual agreement, the agreement embodying that separation ordinarily sets out the essential terms governing the parties' rights and obligations upon separation. Such an agreement would ordinarily identify the employment relationship giving rise to the settlement, the effective date of separation, the intention of the parties to terminate the contract by mutual consent, the terminal benefits agreed upon, including salary arrears, leave pay, gratuity, severance or any other agreed dues, and any waiver or release of further claims. These are not mere formalities; they provide certainty regarding the source and character of the obligations assumed by the parties and demonstrate that the agreed-upon payment indeed arises from the employment relationship. The Court has carefully examined the Deed of Settlement dated 25 March 2021 produced by the Claimant. Although the Deed acknowledges an indebtedness and prescribes the mode and timeline of payment, the particulars of the payment are not gone into. The Respondent alleged only that it was fraudulently procured. Indeed, during cross-examination, the Claimant testified that the parties separated by mutual consent but conceded that there was no resignation letter or any written agreement evidencing the mutual separation. In **National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] eKLR,** the court held that a court of law cannot rewrite a contract between the parties and is bound to give effect to the intentions of the parties as expressed in the agreement, unless coercion, fraud or undue influence is pleaded and proved. In the present case, the Deed proves the existence of an indebtedness. The contract of employment proves the existence of an employment relationship. The sum of Kshs. 2,046,565.57 is thus due and owing for work done and benefits thereof. **Accordingly, the Court finds that the Claimant is owed the sum of Kshs. 2,046,565.57 acknowledged in the Deed of Settlement dated 25 March 2021 together with interest thereon at the contractual rate of 12% per annum from 31 May 2021 until payment in full. The claimant is also entitled to costs herein.** **Delivered in open court this 14th day of August 2026** **M. MBARŨ** **JUDGE** **In the presence of:** Court Assistant: Kemboi ……………………………………………… and …………………………………..………