Mwangangi v H Young & Company Ltd Estate Africa Limited (Appeal E409 of 2025) [2026] KEELRC 2444 (KLR) (31 August 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **APPEAL NO. E409 OF 2025** **AMOS KIOKO MWANGANGI APPELLANT** *-VERSUS-* **H. YOUNG & CO. LTD. EAST AFRICA LIMITED RESPONDENT** (**Being an appeal against the judgment and order of the Hon. Daniel Ngalu Musyoka delivered on 5 November 2025 in Gatundu MCELRC Case No. E009 of 2023)** **JUDGMENT** The appeal arises from the judgment delivered in Gatundu MCELRC Case No. E009 of 2023. The appeal is on the following grounds: 1. The learned magistrate erred in law and fact by disregarding the terms of the appellant’s contract of service dated 2 July 2020 and, in lieu thereof, applying the respondent’s project timeline as the yardstick for determining the lifetime of the appellant’s employment contract. 2. The learned magistrate erred in law and fact by failing to appreciate that the appellant’s contract of service dated 2 July 2020 was only terminable by issuance of by dint of clause 13(i) thereof 3. The learned magistrate erred in law and fact by failing to apply the substantive justification test and the burden of proof imposed by section 47(5) of the Employment Act to the Respondent’s allegations of completion of works 4. The learned magistrate erred in law by misapplying various precedents of the Employment and Labour Relations Court from presumed similar fact cases, and therefore arrived at per incuriam decision 5. The learned trial magistrate's decision was wholly erroneous in law, contrary to binding judicial precedent, occasioned a miscarriage of justice, and resulted in substantial prejudice to the appellant. The appellant seeks the court to allow the appeal and set aside the entire judgment and substitute it with the order allowing the appellant’s claim as pleaded in the memorandum of claim dated 25 April 2023. The background of the appeal is the claim filed by the appellant in Gatundu MCELRC 009 of 2023. He claimed that he was employed by the respondent as a prime mover driver in the respondent’s company on 3 July 2020. However, on 30 September 2022, the respondent unfairly and unlawfully terminated his employment without cause, and the reasons were spurious smokescreens to effect the termination. He was neither invited by the respondent to a disciplinary hearing nor accorded an opportunity to defend himself against the allegations that formed the basis of the termination of his employment. He was earning a monthly salary of Kshs. 63,444. The claim was also that terminal dues were not paid. The appellant prayed for the following before the trial court: 1. Compensation for wrongful and unlawful termination of employment 12 months Kshs. 761,328 2. One month salary in lieu of notice Kshs. 63,444 3. Alleged excess fuel unlawfully deducted Kshs. 4,440 4. Pay in lieu of annual leave Kshs. 88,822 In reply, the respondent averred that the appellant was not a diligent worker as alleged, but was issued warning letters on various dates. The respondent acted legally and procedurally when terminating employment. Kenya Rural Roads Authority had contracted the respondent for the project: Improvement to Bitumen Standards and Maintenance of Ichaweri-Nembu. The substantial completion date for the project was scheduled for 31 May 2022, with the defects liability period being 31 May 2023. Accordingly, the respondent was forced to terminate its employees during the defects liability period gradually. The completion of the works not only affected the appellant; it also terminated the contracts of all workers on the project. Following the termination of employment, the appellant was paid the salary for September 2022, and the respondent calculated the appellant’s terminal dues, including notice pay, leave days earned but not taken, and gratuity. The appellant signed a new contract of employment on 31 January 2023 to be redeployed at the respondent’s Fujita project but failed to report to the new workstation. The appellant was earning a gross salary of Kshs.60,444. The trial magistrate heard the parties and held that projects such as the one the respondent was involved in had a finite lifespan. In this case, the project was a road project that had come to an end, and the respondent could therefore not anticipate working beyond the project's life. There was therefore no justification in demanding notice or in lieu of notice pay. The learned magistrate dismissed the claim save for the claim for the Kshs. 4,440 deductions for alleged fuel consumption, which the respondent did not explain. On the appeal, the appellant submitted that the circumstances of the appellant employment was distinguishable from the case of **Benson Omuyonga v Laxmanbhai Constructions Ltd [2014] KEELRC 64 (KLR)** relied upon by the trial court where the court held that the arrangement between the parties was to treat end of the project as a redundancy situation and pay out terminal dues as there is no similar intention which can be inferred from the contract between the parties. The claimant in the above case was a general labourer with no written contract. The appellant argues that the respondent also produced no evidence showing that the appellant was informed that the Gatundu project was coming to an end. This is because the alleged notice was not produced in the Amended Response to the statement of claim and was therefore an inadmissible afterthought. The appellant submitted that the new contract produced in evidence for work in the Fujita project is proof that the appellant’s work was not tied to a single project and, by activating clause 9 of the contract, the appellant could have been deployed somewhere else without terminating his contract for desertion for failure to report to the Fujita project. The appellant contended that he was ready to work on another project, not the Fujita project. The appellant also argues that there was no notice to show cause for the desertion, though it is to be noted this is not one of the grounds of appeal nor was it part of the claim. The respondent submitted that records forming the appeal are not certified, hence rendering the appeal fatal. Without a proper Record of Appeal, the foundation is lost as held in **Nicholas Kiptoo arap Korir Salat v IEBC Civil Appeal No. 228 of 2013**. The trial court analysed the evidence before it and correctly dismissed the claim. There were justified grounds leading to termination of employment. Under section 45 of the Employment Act, the respondent adhered to procedural and substantive fairness requirements. In the letter dated 30 September 2022, the respondent stated the reasons for the termination of employment, namely the completion of the road project. Such formed genuine and valid reasons under section 43 of the Employment Act. The respondent had a contract with the Kenya Rural Roads Authority, with start and end dates that fell within the period during which the appellant was employed. Hence, upon completion of the project, the appellant's retention was unnecessary. In **Alego v Kabuito Contractors Limited [2023] KECA 1166**, the court held that construction work is project-based. Upon completion, the employer is bound to terminate the employment contract. The appellant was paid his salary up to 30 September 2022. There was payment in lieu of notice as part of the terminal dues. The respondent submitted that it issued the appellant a new contract dated 31 January 2023 in another project, Fujita. However, the appellant deserted duty, resulting in the termination of his employment. However, this is a new claim introduced in the appeal. The appeal has no merit and should be dismissed with costs. **Determination** This is a first appeal. The court is required to review the records, reassess the trial court's findings, and reach a conclusion. However, take into account that the trial court had the chance to hear the witnesses. What was before the trial court was the case that on 30 September 2022, the respondent terminated the appellant’s employment without due process, reason or payment of his terminal dues. He claimed payment of: 1. Compensation at 12 months; 2. Notice pay; 3. Deductions; and 4. Costs of the suit. The matter of termination of employment in January 2023 is introduced in the appeal. Such matters were not pleaded, and cannot be introduced on appeal. Even if employment was terminated on 31 January 2023, as alleged, due to desertion, the appellant was under a fixed-term contract for only 3 months. It was thus a separate employment relationship after the initial employment relationship ended on 30 September 2022. No rights accrued after 30 September 2022. In any case, the payment statement for February 2023 confirms payment of terminal dues under this letter of offer for employment. In a letter dated 3 July 2020, the respondent appointed the appellant as a prime mover at the Gatundu Project. It was an open contract; under clause 13 thereof, it was agreed that termination of employment would take effect upon one month's notice or payment in lieu thereof. The respondent admitted that, by a notice dated 30 September 2022, it terminated the appellant’s employment because the Gatundu Project had ended. It had a contract with the Kenya Rural Roads Authority to repair the road, which ended; as a result, the appellant’s employment also ended. Under sections 35, 41, and 44 of the Employment Act (the Act), the employer may terminate employment with notice or for misconduct or gross misconduct. However, the employee is entitled to be given reasons for such a decision, as required under section 43 of the Act. It is no longer sufficient for the employer to state in the written contract that termination of employment would follow upon notice. Unless such notice is by mutual agreement, the employee is entitled to notice, reasons and justification for the termination of employment as held in [**Isindu v Lavington Security Guards Ltd [2017] KECA 225 (KLR)**](https://new.kenyalaw.org/akn/ke/judgment/keca/2017/225/eng%402017-11-03) and **National Bank of Kenya Ltd v Banking Insurance & Finance Union Kenya [2026] KECA 1549 (KLR)**. The employer must demonstrate that the dismissal was both substantively and procedurally fair to justify termination of employment effectively. This is the shift introduced by the Act. The notice dated 30 September 2022 was to take effect immediately. Although the respondent offered to make payment in lieu of notice, the reasons given that the project work would be completed and hence lead to loss of employment had nothing to do with the appellant. Indeed, the scenario presented by the respondent directly speaks to the provisions of section 40 of the Act. Where the employee's services are no longer required, regardless of the employee's fault, the employer must follow due process. To thus circumvent section 40 of the Act under the guise that the employment contract provided for notice pay is to engage in unfair labour practices which are prohibited under article 41 of the Constitution. In this case, under section 43 of the Act, there is no valid, reasonable or fair justification leading to termination of employment. Such amounts to unfair termination of employment as held in **Irangi v Teachers Service Commission [2026] KECA 1087 (KLR)**. In cases of unfair termination of employment, compensation is due under sections 45 and 49 of the Act. In the letter dated 30 September 2022, the respondent stated that the appellant would be paid up to that date. The notice pay due under section 35 of the Act is not factored in this letter. However, the payment statement for October 2022 has factored in the notice pay. The claim for notice pay is not justified. Indeed, the respondent offered to pay the appellant the following terminal dues: 1. Notice pay Ksh. 50,370. 2. Leave days Ksh. 63,137. 3. Gratuity Ksh. 58,119. This is a generous offer. If not paid as confirmed during cross-examination at trial, the appellant should consider the same and accept. In assessing the compensation due, the court is required to be guided under section 45(5) of the Act, the employee's conduct, the poor work record, and the employer's procedures that led to the loss of employment. The respondent has filed a litany of warning letters issued to the appellant. Although this was not the reason for the employee's loss of employment, it comes into play in assessing the compensation due to the employee. The warnings are many, including a last warning. Cumulatively, a compensation of one month's pay at KSh. 50,370 basic pay and Ksh. 10,074 in house allowance. The gross wage due is Ksh. 60,444 in compensation. On costs, the appeal thus addressed, each party should meet its costs for the appeal and trial court proceedings. **Accordingly, judgment in Gatundu CMELRC No. E009 of 2023 is hereby reviewed with the award of Ksh. 60,444 in compensation for unfair termination of employment. Each party to bear its costs of the appeal and trial court proceedings.** **Delivered in open court this 31st day of August 2026** **M. MBARŨ** **JUDGE** **In the presence of:** **Court Assistant: Kemboi** **……………………………………………… and …………………………………..………**