Aringo v Blue Nile Rolling Mills (Appeal E165 of 2025) [2026] KEELRC 2438 (KLR) (31 August 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **APPEAL NO. E165 OF 2025** *[formerly Thika High Court Appeal No. E099 of 2025]* **JOSEPH SEDA ARINGO APPELLANT** **-**VERSUS- **BLUE NILE ROLLING MILLS RESPONDENT** **(Being an appeal from the judgment of Hon. J.N Wabilyanga delivered on 25 March 2025 in Thika MCELRC No. 10 of 2019)** **JUDGMENT** The appeal arises from the judgment delivered on 25 March 2025 in Thika MCELRC No. 10 of 2019. The appeal is on the grounds that the trial magistrate erred in law and fact by finding that the respondent had lawfully dismissed the appellant under the principle of summary dismissal despite the absence of evidence of gross misconduct as relied upon by the Respondent. The trial magistrate erred in law and fact by finding that the respondent had lawfully dismissed the appellant despite the absence of evidence on record of a disciplinary process as required by the law. The background of the appeal is a claim filed by the appellant. His case was that he was employed by the respondent as a supervisor in the building department permanently on or about 26 August 2014. On 28 January 2019, the respondent issued the appellant with a Notice to Show Cause accusing him of overseeing the loading of unauthorised steel bars on a customer’s vehicle with the knowledge that the same would cause loss to the respondent. The respondent later confirmed the appellant’s innocence but then intimidated him, demanding that he resign from his employment. The respondent proceeded to tabulate the appellant’s dues at Ksh. 32,703 when he refused to resign. The appellant asked the court for 1. A declaration that the termination of the claimant’s employment was unfair, illegal, wrongful and unlawful 2. The respondent retabulates and pays the claimant his terminal dues, including leave days 3. Compensation for wrongful termination tabulated as his salary for a period of twelve months 4. An order that the respondent furnishes the claimant with his p9 form for the year 2018 in line with tax regulations 5. Costs of the claim. In reply, the respondent averred that the appellant was involved in conspiracy to defraud the company. He oversaw the loading of offcuts contrary to instructions, and it was later found that some full-length materials were also offloaded. It was also not his duty to oversee the loading of the offcuts. After carrying out due process on the dispute between it and the appellant, and after interviewing the relevant employees, with the appellant given time to respond, the appellant's explanation was found unsatisfactory. Instead of summarily dismissing the appellant, the respondent terminated the appellant's services in accordance with all laid-down procedures. The respondent also paid all the appellant’s dues and even added an ex gratia payment. The appellant signed for his final dues and discharge, but the respondent realised the mischief caused by the incorrect signature and called him back to sign correctly. He declined to do so, prompting the respondent to stop the payment of the cheque. The appellant was notified of the same. The respondent denied the court's jurisdiction and asked that the claim be dismissed with costs. The learned magistrate assessed the evidence given by the parties and concluded that the appellant met the lady who purchased the off-cuts. In the process, he acted contrary to the respondent company's rules. The court also found, after reviewing the evidence of record and the documents produced, that the respondent was justified in summarily dismissing the appellant. The court dismissed the appellant’s case against the respondent but held that he was entitled to his final dues, which had already been tabulated and were subject to proper signing, and that he was also entitled to obtain his P9 form for the year 2018 as required. The parties attended court on 8 May 2026, and directions were issued. There was no compliance. There are no submissions. **Determination** Based on the records filed, in the absence of any written submission on the appeal, the court is left to review the record and the findings by the learned magistrate. This is done in acknowledgement that the learned magistrate had the chance to take evidence from the parties. The appellant’s case is that on 28 January 2019, the Respondent issued him with a notice to show cause on the allegations that he oversaw the loading of unauthorised steel bars on a customer’s vehicle leading to loss for the company. He responded to the matter, and upon the respondent reviewing the CCTV footage, it was established that the allegations were not true. He was asked to resign but declined. The respondent attributed the termination to the terminal dues, which led to the termination of employment. The respondent asserted that, upon the notice to show cause against the appellant, several other employees were interviewed, and his explanation was established to be unsatisfactory. Instead of a summary dismissal, termination of employment was found justified. His terminal dues were tabulated and a discharge executed, but the appellant deliberately used a wrong signature, and the payment cheque was cancelled. The claims made are without merit. Under section 44 of the Employment Act, an employer may impose summary dismissal where the employee has committed gross misconduct. Equally, under section 41(1) of the Act, the employer has the right to terminate the employee where the employee is found to have engaged in misconduct. However, due process under section 41 of the Act is mandatory, including in cases of gross misconduct. Upon the notice to show cause, the employee must be invited to the shop floor for a hearing and allowed to make his representations in the presence of another employee of his choice. Section 41(2) of the Act requires 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.*** Even in a case where the employer finds mercy on the employee and converts a possible summary dismissal to a termination of employment, the due process under section 41 of the Act is mandatory. In **Isindu v Lavington Security Guards Ltd [2017] KECA 225 (KLR),** the court held that a mandatory and elaborate process is set out under section 41 of the Act, requiring notification and a hearing before termination of employment. In hearing the employee, the rules of evidence under the Evidence Act and the Civil Procedure Act, and the Rules thereto, are not applicable. Hence, the mandatory nature of section 41 of the Act is emphasised. In **Postal Corporation of Kenya v Tanui [2019] KECA 489 (KLR),** the court elaborated the provisions of section 41 of the Act and held: *There can be no doubt that the Act, enacted in 2007, imposes heavy legal obligations on employers regarding summary dismissal for breach of an employment contract and unfair termination involving breach of statutory law. The employer must prove the reasons for termination/dismissal (section 43); prove the reasons are valid and fair (section 45); prove that the grounds are justified (section 47 (5), amongst other provisions. A mandatory and elaborate process is then set up under section 41 requiring notification and hearing before termination. The Act also provides for most of the procedures to be followed, thus obviating reliance on the Evidence Act and the Civil Procedure Act/Rules. …* The conclusion by the learned magistrate that due process was followed was in error, since the appellant was not taken through any form of disciplinary hearing under the law or the respondent's internal policies. None are claimed to have been applied. Such record was not filed. The offer to pay terminal dues cannot sanitise the lapse in due process and accord the appellant justice by allowing him to attend and make his representations before another employee of his choice. Section 41 of the Act sets out the minimum standards for a fair procedure that an employer ought to comply with. In this case, the lapse in adhering to the mandatory provisions of the law rendered the termination of employment unlawful and unfair in terms of sections 41 and 45 of the Act. Notice pay and compensation are due to the appellant. In response, the respondent raised the issue that the appellant had signed the discharge and his dues were tabulated. Under section 35(4) of the Act, the discharge does not stop the appellant as the employee from claiming what is lawfully due, and where there is unfair labour practice. A discharge voucher can rightly be challenged if not in tandem with the law. The payment of Ksh. 32,703 has since been stopped on the basis that the appellant did not use his correct signature. Payment of terminal dues should be unconditional. Such would put the employer in good standing in view of section 45(5) of the Act. Since employment terminated in January 2019, the appellant has been denied the benefit of his terminal dues. This is without justification. On the findings above, the appellant is entitled to one month's notice pay in terms of section 35 of the Act. He was earning a gross wage of Ksh. 30,160, which is due. The appellant worked for the respondent from 2014 to February 2019. There is no record filed indicating a warning or other disciplinary matter. Save for the unfair labour practices visited against him by the respondent, he ought to have continued in his employment and earned a living. Such right was denied. He diligently served for over 5 years. A compensation of 5 months is hereby found appropriate. On the wage of Ksh. 30,160 x 5 = Ksh. 150,800 in compensation. In the cancelled payment of terminal dues, the offer to pay Ksh. 32,703 for days worked, dues earned in employment, all stand. On costs, the appeal is on good foundation. Costs are due. **Accordingly, the judgment of the trial court in Thika MCELRC No. 10 of 2019 is hereby set aside. Judgment is entered for the appellant against the respondent in the following terms:** 1. **A declaration that the employment terminated unlawfully and unfairly.** 2. **Compensation Ksh. 150,800.** 3. **Notice pay Ksh. 30,160,** 4. **Terminal dues Ksh. 32,703.** 5. **Costs of the appeal and the trial court proceedings.** **Delivered in open court this 31st day of August 2026** **M. MBARŨ** **JUDGE** **In the presence of:** **Court Assistant: Kemboi** **……………………………………………… and …………………………………..………**