https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1020

H Young Company (EA) Ltd v Kenya Building, Construction, Timber & Furniture Industries Employees Union (Civil Appeal 497 of 2019) [2026] KECA 1020 (KLR) (29 May 2026) (Judgment) Neutral citation: [2026] KECA 1020 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal 497 of 2019 SG Kairu, P Nyamweya & WK Korir, JJA May 29, 2026 Between H Young Company (EA) Limited Appellant and Kenya Building, Construction, Timber & Furniture Industries Employees Union Respondent (Being an against the Judgment of the Employment and Labour Relations Court of Kenya at Nairobi (H. Wasilwa, J.) dated 20th December 2018 in ELRC Case No. 1602 of 2013 Cause 1602 of 2013 ) Judgment 1.In this appeal, the appellant, H. Young & Company (E. A) Limited is aggrieved by the judgment of the Employment and Labour Relations Court (ELRC) (H. Wasilwa, J.) delivered on 20th December 2018. In that judgment, the ELRC awarded each of six of the appellant’s former employees (the grievants): salary in lieu of notice; 8 months’ salary as compensation for unlawful and unfair termination; wages for days worked in January 2013; accrued leave; and service gratuity in accordance with the respondent’s Collective Bargaining Agreement (CBA). The judgment translated into awards in favour of the grievants as follows: Michael Odhiambo, Kshs. 416,000; Patrick Muthee Njeru, Kshs. 211,083; James Gichuhi Kshs. 346,322; Moses Kamau Kimani, Kshs. 277,672; Ronfestus Kioko Kimeu, Kshs. 313, 211, and Pius Gathai Kagori, Kshs. 611,222. 2.The background in brief is that the grievants were members of the respondent trade union, Kenya Building, Construction, Timber & Furniture Industries Employees Union, with which the appellant had a concluded CBA. The grievants were employed by the appellant on varying dates as either electricians or as plant mechanics. Sometime in or before February 2013, electrical motor parts, namely, a fuel pump, a battery, alternator and a starter, went missing from the appellant’s premises. 3.By undated internal memos, the appellant directed each one of the grievants “to provide a written explanation regarding the issue of...” the missing parts. Such written explanation was to reach the appellant’s Human Resources Department at its head office before Monday 4th February 2013. Those memos contained a postscript:“The Company can decide to send you to a Polygraph Test and you have the rights (sic) to refuse if you don't want to undergo the test but if you are willing to cooperate to undergo a Polygraph Test kindly affect your name and signature below.” 4.The grievants duly complied with the directive. They all tendered written explanations asserting that they knew nothing about the missing parts. Michael Odhiambo, for instance, pointed out that he is the one who realized that a fuel pump was missing and brought the matter to the attention of the foreman. 5.Thereafter, the appellant referred the grievants to Truth Tracker Polygraph Limited, a company where polygraph tests were administered. In each case, seven questions were put to each grievant. Based on the polygraph examination reports, each of grievants was “found to be deceptive” with respect to some of the answers they gave to the questions and “non deceptive’ with respect to others. Based on those polygraph reports, and without further ado, each of the grievants was summarily dismissed by letters dated 19th February 2014 under the hand of the Human Resources Manager of the appellant. 6.The respondent thereafter took up the matter on behalf of the grievants, reported a trade dispute to the Ministry of Labour. A conciliator was appointed who, after consideration of submissions by the parties, recommended in a letter dated 10th June 2013, that the dismissal be reduced to normal termination with full benefits in accordance with the CBA; and that each of the grievants be paid eleven (11) months wages based on the employees gross wage at the time of dismissal for unfair termination. 7.The respondent thereafter invited the appellant to a meeting for purpose of calculating the actual dues each grievants was to receive but according to the respondent the appellant ignored the invitation. The respondent was then constrained to institute suit by a Memorandum of Claim dated 4th October 2013 contending that the dismissal of the grievants was unfair. The appellant in answer to the claim maintained that the grievants’ employment was lawfully terminated. 8.After conducting a trial in which the respondent called three witnesses while the appellant called its Human Resource Manager as its witness, and after considering the submissions by the parties, the learned trial Judge found that the appellant’s letters dismissing the grievants “did not assign any reason to the dismissal”. The Judge stated:“It is not clear why the grievants were dismissed without assigning any reason to (sic) their dismissal in the dismissal letter and therefore respondent did not have any valid reason to dismiss the grievants.The grievants were also dismissed without following due process. There is no indication that the grievants were ever taken through any disciplinary hearing before their dismissal. This definitely offends the provisions of Section 41 of the Employment Act.” 9.The Judge then awarded each of the grievants the reliefs we have set out above and hence this appeal. In its Memorandum of Appeal, the appellant faults the Judge for: holding that it did not have a valid reason to terminate the grievants’ employment; concluding that due process was not followed; and finding that the dismissal was unfair. It is also the appellant’s case that the awards given by the trial court are manifestly excessive and unfair. 10.During the hearing of the appeal before us on 4th November 2025, learned counsel Miss. Nadongo holding brief for Miss. Awour for the appellant relied entirely on the appellant’s written submissions dated 18th September 2020. Ms. Chege, a legal officer in the respondent relied entirely on the respondent’s written submissions dated 29th October 2025 and asked the Court to expunge the respondent’s earlier written submissions dated 16th October 2023 and 10th June 2024. 11.For the appellant, it was submitted that it had valid reasons under the Employment Act for terminating the grievants’ employment, specifically relating to the theft of equipment under the employees' charge. It was urged that the trial court focused solely on the dismissal letters rather than investigating the facts presented. 12.As regards the process, whilst conceding that the appellant did not "strictly adhere" to Section 41 of the Employment Act regarding disciplinary hearings, it was urged that the process was not "completely flawed" because they provided show-cause letters and investigated the matter through polygraph tests. 13.Regarding the awards, it was submitted that the 8-month salary award was manifestly excessive and punitive; that the trial court failed to consider factors such as the employees' length of service and their potential for securing other employment. 14.In opposition to the appeal, it was submitted for the respondent that there is no basis for interfering with decision of the trial court; that the appellant failed to follow Section 41 of the Employment Act, which mandates a hearing before termination; that a polygraph test is not a substitute for a disciplinary hearing; and that the appellant failed to provide valid reasons for the dismissal in the termination letters. Furthermore, it was urged, other security personnel had access to the area where the alleged theft is said to have occurred but were not investigated. 15.Regarding the compensation awards, it was submitted that the award of 8 months’ compensation was a proper exercise of the trial judge's discretion under Section 49 of the Employment Act, and there is no basis for this Court to interfere with the award absent demonstration of any abuse of power by the judge. 16.We have considered the appeal in keeping with our mandate as the first appellate court. Three issues arise. First, is whether the trial Judge erred in holding that no valid reasons were given by the appellant to justify the dismissal. The second issue is whether the judge erred in holding that due process was not followed. The third issue is whether the relief given is manifestly excessive and whether there is a basis for the Court to interfere with the awards. We will address the first two questions together as they are intertwined in this case. 17.As stated by the Court in the case of Nyandiko vs. Kenya Commercial Bank Limited (Civil Appeal 305 of 2014) [2017] KECA 798 (KLR), under Section 45 of the Employment Act, termination of an employee is deemed to be unfair if the employer fails to prove that the reason for the termination was valid. The Court in that case went on to say that:13.The parameters for determining whether the employer acted in accordance with justice and equity in determining the employment of the employee are inbuilt in the same provision. In determining either way, the adjudicating authority is enjoined to scrutinize the procedure adopted by the employer in reaching the decision to dismiss the employee; the communication of that decision to the employee and the handling of any appeal against the decision. 18.And later in the same case, the Court expressed as follows:14.Section 41 of the Act enjoins the employer in mandatory terms, before terminating the employment of an employee on grounds of misconduct, poor performance or physical incapacity to explain to the employee in a language that the employee understands the reasons for which the employer is considering… [terminating]… the employee’s employment with them. The employer is also enjoined to ensure that the employee receives the said reasons in the presence of a fellow employee or a shop floor union representative of own choice; and to hear and consider any representations which the employee may advance in response to allegations leveled against him by the employer. 19.The appellant’s letters 19th February 2014 by which it summarily dismissed each of the grievants was in the following terms:“RE; Summary DismissalThis is to inform you that you have been summarily dismissed from employment with effect from 19th of February 2013.Your final dues shall be calculated and paid to you as follows:Salary up to and including 19th of February 2013 Outstanding leave days.Less any company liabilityPlease collect your final dues from the accounts department during working hours.Faithfully ...” 20.It is immediately discernible from that letter that no reason at all was given as to why the grievants were dismissed. Without any reason having been given for the dismissal, it follows that an inquiry as to validity of reasons cannot arise. Existence of a reason for dismissal is an essential condition, an absolute prerequisite, a sine qua non, for inquiry as to validity. As already indicated, Section 41(1) of the Employment Act requires that before terminating the employment of an employee on grounds of misconduct, the employer should explain to the employee the reasons for which it is considering the termination. In effect an explanation of the reason for termination is contemplated and should be given prior to the termination. 21.In the same spirit, under Section 41(2) of the Employment Act, before summarily dismissing and employee, the employer is enjoined to hear and consider any representations which the employee may make. In that regard Section 41(2) provides for the procedure to be adhered to before an employee can be summarily dismissed. It stipulates that:“(2)Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1), make”. [Emphasis added]. 22.Summary dismissal is therefore no longer a secret weapon that an employer unleashes on an employee without giving reasons why the employer is considering terminating or dismissing the employee and without according the employee an opportunity to make representations in that regard. 23.Regarding the polygraph examination results as the basis on which the appellant terminated the grievants employment, as already noted, the examination results were based on answers to questions posed to the grievants. The grievants were found to be “deceptive” in their answers to some of the questions posed and “non-deceptive” with respect to others. In that regard, we echo the words of the ELRC in the case of William Kiaritha Gacheru vs. East African Packaging Industries Limited [2016] KEELRC 1633(KLR) where that court stated:“The Court is in agreement that polygraph testing as presently stands can do no more than show the existence of or non-existence of deception. Due to its several limitations and margin of error, it is not safe to rely on and cannot itself be used as a conclusive proof of guilt of crime or misconduct. Besides a person can lie without necessarily being guilty of the crime or misconduct he is alleged to have been involved in.”We respectfully agree. 24.Based on the foregoing, the learned trial Judge was absolutely right, and we uphold her conclusion that:“In view of the fact that the grievants were not informed of the reasons for their dismissal and they were not given any fair hearing before dismissal, I find their dismissal unfair in terms of section 45 (2) of the Employment Act.” 25.As regards the complaint that award of the equivalent of 8 months’ salary as compensation for unlawful and unfair termination is manifestly excessive, the award involved exercise of judicial discretion by the learned Judge. As this Court stated in the case of National Bank of Kenya vs. Mutonya (Civil Appeal 118 of 2017) [2019] KECA 404 (KLR):“Whenever this Court is called upon to interfere with the exercise of judicial discretion, as in this appeal, it is guided by the principles enunciated in numerous case law from this Court. In the case of Coffee Board of Kenya V. Thika Coffee Mills Limited & 2 Others [2014] eKLR, it was stated that 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.” 26.It is a long-standing principle as pronounced many years gone in the case of Butt vs. Khan [1981] KLR 349 that an appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate and it must be shown that the Judge proceeded on wrong principles, or that he misapprehended the evidence in some material respect, and so arrived at a figure which was either inordinately high or low. 27.With that in mind, Section 49 of the Employment Act sets out some of the factors for consideration in weighing the appropriate relief for wrongful termination of employment. As the Supreme Court of Kenya stated in Kenfreight (EA) Limited vs. Nguti (Petition 37 of 2018) [2019] KESC 79 (KLR) when giving an award under section 49 of the Employment Act, a court of law is expected to exercise judicial discretion on what is fair in the circumstances and that in as much as the trial court does have a discretion in the quantum of damages to award for unfair or wrongful termination of employment, it must be guided by the principles and parameters set under section 4 of section 49 of Employment Act. 28.In the present case, the learned Judge made absolutely no mention of the factors that informed her decision to make the award that she did. It is therefore unclear how she arrived at the award that she made. Ideally this Court would have referred the matter back to the trial court for reconsideration on that aspect. However, a lot of time has passed. The termination was on 19th February 2013. That is just over 13 years ago. In our view, justice will not be served by sending the matter back to the trial court. That said, and without condoning the approach taken by the Judge, and bearing in mind the parameters set under Section 49(4) of the Employment Act, we note that the grievants did not in any way cause or contribute to their termination. Although the object of compensation is not to punish the employer, the appellant in this case paid no heed to, but disregarded the statutory requirements on termination.Moreover, there was an opportunity, as early as June 2013 to resolve the matter based on the Conciliator’s recommendation for the payment of eleven (11) months wages on account of unfair termination. All things considered we are not inclined to interfere with the award made by the learned Judge. 29.In conclusion, we find no merit in this appeal. It is accordingly dismissed with costs to the respondent. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY 2026.S. GATEMBU KAIRU, FCIArb, CArb.....................................JUDGE OF APPEALP.NYAMWEYA....................................JUDGE OF APPEALW. KORIR....................................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR