Nyandera v H Young & Company (East Africa) Limited (Employment and Labour Relations Appeal E070 of 2024) [2026] KEELRC 1287 (KLR) (14 May 2026) (Judgment)

Nyandera v H Young & Company (East Africa) Limited (Employment and Labour Relations Appeal E070 of 2024) [2026] KEELRC 1287 (KLR) (14 May 2026) (Judgment) Neutral citation: [2026] KEELRC 1287 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Appeal E070 of 2024 DKN Marete, J May 14, 2026 Between Justus Omondi Nyandera Appellant and H Young & Company (East Africa) Limited Respondent Judgment 1.This matter was originated by way of a Memorandum of Appeal dated 20th September 2024. It is an appeal from the judgment of the trial court delivered on 15th February, 2024 in Milimani CMELRC No. 1800 of 2019. 2.The Memorandum of Appeal sets out the following grounds:1.The Learned Magistrate erred in law and in fact in failing to make an award for wrongful termination of employment despite making a finding that the respondent wrongfully terminated the Appellant’s employment.2.The Learned Magistrate erred in law in finding that the Claimant executed a Discharge and consequently he had no further claims against the Respondent. 3.The Appellant prays for orders that:a.That the Appellant’s Appeal be allowed with costs.b.That the Judgment of the Learned Magistrate be set aside and the Order dismissing the Appellant’s Claim be substituted with an Order allowing the Appellant’s claim with costs.c.That the costs of this Appeal be borne by the Respondent. 4.The Appellant's case before the trial court, as presented in the Record of Appeal, was that he was employed by the Respondent on 10th July, 2018 as a Prime Mover Driver at a gross monthly salary of Kshs. 60,444.00 and stationed at the Respondent's Industrial Plot premises. 5.The Appellants other case is that on 17th June, 2019 in the course of a workplace emergency involving a road accident, the Appellant was assigned motor vehicle registration number KBQ 261C to ferry injured persons to hospital. The Respondent's technical team subsequently noted an over-consumption of 37 litres of fuel in the vehicle on that date. The Respondent summarily dismissed the Appellant on 25th June, 2019 on grounds of suspected theft of fuel, relying on Section 44(g) of the Employment Act, 2007. The Appellant denied the theft allegation and challenged his dismissal. 6.At the hearing before the trial court, the Appellant testified and closed his case. The Respondent called one witness, a Mr. Augustine Mutua, the Respondent's Security Manager, who adopted his witness statement and produced the Respondent's documents. The matter thereafter proceeded to written submissions and judgment. 7.Before this Court, the Appellant filed Written Submissions dated 24th April 2025. The Respondent filed Written Submissions dated 6th November, 2025 together with a Supplementary Record of Appeal of even date comprising the Respondent's list and bundle of documents dated 14th July 2020 and the Respondent's further list and bundle of documents dated 24th November 2023. 8.The issues for determination therefore are:1.Whether the Appellant signed the discharge voucher.2.If so, whether the discharge voucher operated as a bar to the Appellant's claims.3.What reliefs, if any, the Appellant is entitled to.4.Who bears the costs of this appeal. 9.The standard of review on a first appeal is that this Court is entitled to re-evaluate the evidence on the record and draw its own conclusions, while remaining conscious that it lacked the advantage of observing the demeanour of witnesses at trial. Interference is warranted only where the trial court misdirected itself in law, misapprehended the facts, took irrelevant considerations into account, failed to consider relevant matters, or reached a decision that is plainly wrong. This is the observation in the celebrated authority of Selle and Another v Associated Motor Boat Co. Ltd [1968] EA 123. 10.The Appellant's position throughout the proceedings was that he did not sign the discharge voucher produced at trial by the Respondent. He maintained this denial during cross-examination before the trial court, and further stated that the signature appearing on page 9 of the Respondent's bundle of documents was not his. He further testified that page 8 of the same bundle showed that he had declined to sign. 11.The Respondent for its part produced the discharge voucher dated 13th November, 2019 and its witness, Mr. Augustine Mutua (RW1), testified that upon termination the Appellant was paid his full and final dues and signed the discharge certificate. RW1 further testified during cross-examination that the Appellant had initially refused to sign on 7th November, 2019 but later returned on 13th November, 2019 demanded the money and signed the discharge upon receipt of Kshs. 21,570.00. 12.The trial court found that the Appellant did not in his pleadings deny signing the discharge voucher. The issue was only raised for the first time during cross-examination when counsel for the Respondent confronted the Appellant with the discharge document. The Appellant neither pleaded in his Memorandum of Claim nor in his Response to the Respondent's Statement of Response that he had not signed the discharge voucher. He did not apply to have the signature subjected to forensic examination nor did he produce any other evidence to demonstrate that the signature on the discharge was not his. The law is settled that evidence flows from and is constrained by a party's pleadings and a party cannot raise a new issue of substance in cross-examination if this was not pleaded. 13.This Court finds, as did the trial court, that the Appellant did execute the discharge voucher dated 13th November, 2019 and received the sum of Kshs. 21,570.00 upon termination. This ground of appeal accordingly fails. 14.The 2nd issue for determination is whether the discharge voucher operated as a bar to the Appellant’s claims. This is the central issue in this appeal. It engages the competing lines of authority in this jurisdiction on the effects of a discharge voucher in employment disputes. 15.The Respondent relies on the Court of Appeal decision in Coastal Bottlers Limited v Kimathi Mithika [2018] eKLR, where the Court of Appeal held that whether or not a settlement agreement or discharge voucher bars further claims depends on the circumstances of each case. In that case, the Court found the settlement agreement freely and voluntarily executed, noted that the employee never denied signing it, found no evidence of misrepresentation, fraud or other vitiating factor, and accordingly gave full effect to the settlement agreement. The Court of Appeal there stated that all the ELRC was required to do was to give effect to the intention of the parties as discerned from the settlement agreement. 16.The Appellant relies on ELRCA No. 49 & 50 of 2021 (Consolidated); H. Young & Co (EA) Ltd & Another v Mwangi & Another where this Court held that a discharge voucher is a one-sided document generated by the employer without the input of the employee and that this Court would be particularly inclined to disregard a discharge voucher as a bar to an employee's claims where the employer had flouted the provisions of the Employment Act, 2007 in the termination process. The Appellant also relies on Jane Njeri Wanyoike & 23 Others v Pan Africa Insurance Company Ltd [2017] eKLR for the proposition that acceptance of terminal dues as acknowledged in a discharge does not negate an employee's entitlement to pursue what is lawfully due. 17.The law on this subject was authoritatively restated by the Court of Appeal in Coastal Bottlers. Whether a discharge voucher bars further claims is a question of fact in each case. The court must address its mind, first, to the import of the discharge voucher and secondly to whether it was voluntarily executed when the concerned party was seized of all relevant information and knowledge. This court applies that test to the present facts. 18.The starting point is an examination of what the discharge voucher actually covered. The payslip for July, 2019, produced as part of the Respondent's further bundle of documents in the Supplementary Record of Appeal, shows a net pay due of Kshs. 21,570.00. That figure corresponds precisely to the amount stated in the discharge voucher as the Appellant's "final dues on discharge." A comparison with the payslips for May and June 2019, showing a net pay of approximately Kshs. 45,090.00 and Kshs. 39,905.00 respectively makes plain that the July, 2019 payslip reflects a heavily reduced figure, being the computation of terminal salary for the days worked up to 25th June, 2019, with accrued leave encashment added and deductions applied. In other words, the Kshs. 21,570.00 is simply the last salary payment already due to the Appellant at the time of his dismissal. It does not include any sum in lieu of notice, any ex gratia component, or any amount that could be characterised as consideration for a waiver of the Appellant's legal claims. There is no evidential foundation for the proposition that the discharge voucher was executed in consideration of a comprehensive settlement of all claims arising from the termination. 19.Turning to the question of voluntariness, this Court notes the circumstances in which the discharge came to be signed. The Appellant was summarily dismissed on 25th June, 2019 on grounds of suspected fuel theft. He initially refused to sign the discharge on 7th November, 2019. He returned on 13th November, 2019 and signed upon receipt of the Kshs. 21,570.00 that was already due to him as terminal salary. His monthly gross salary was Kshs. 60,444.00. The sum received on the discharge was therefore considerably less than one month's salary. There is no evidence that the Appellant was informed at any point that by signing the discharge he would be permanently foreclosing his statutory right to challenge the fairness of the termination under Section 49 of the Employment Act, 2007. The discharge voucher was a document prepared unilaterally by the Respondent. An employee who has lost his livelihood, been accused of theft, initially refused to sign and then returned only to collect what was already owed to him cannot properly be characterised as having made an informed and voluntary waiver of his statutory rights. 20.This case is materially distinguishable from Coastal Bottlers, supra, in that case, the employee received a substantial sum of Kshs. 1,516,281.00 that went beyond mere accrued entitlements, never denied signing the agreement and in this, no vitiating factors were identified. Here, the sum paid was the bare terminal salary already owed, the Appellant initially refused to sign and the termination itself was found by the trial court a finding this Court upholds to have been procedurally unfair. To treat a receipt of wages already owed as a waiver of statutory rights to compensation would be to allow the Respondent to benefit from its own failure to follow the mandatory procedure under Sections 41, 43 and 45 of the Employment Act, 2007. This would be unacceptable to the law. 21.This Court accordingly finds that the discharge voucher, on the facts of this case, does not operate as a bar to the Appellant's claims. The trial court erred in holding otherwise. This ground of appeal succeeds. 22.The 3rd issue for determination is whether the Appellant is entitled to the reliefs sought. 23.Having found that the termination was procedurally unfair and that the discharge voucher does not extinguish the Appellant's claims, the Appellant is entitled to the reliefs available under Section 49 of the Employment Act, 2007. 24.On the claim for one month's pay in lieu of notice, the Appellant's employment contract expressly entitled him to one month's notice or pay in lieu thereof. The Respondent dismissed the Appellant summarily without giving any notice. The sum of Kshs. 21,570.00 paid on the discharge voucher was the terminal salary computation for days worked and does not include or represent any payment in lieu of notice. The Appellant is accordingly entitled to one month's pay in lieu of notice at his gross monthly salary of Kshs. 60,444.00. 25.On compensation for unfair termination, Section 49(1)(c) of the Employment Act, 2007 provides for an award not exceeding twelve months' gross monthly salary. In determining the appropriate award, this Court is required under Section 49(4) to take into account the circumstances surrounding the termination, the conduct of the employee which may have contributed to the termination, the length of service, and the opportunities available to the employee to secure comparable employment, among other factors. 26.In this regard, this court notes that the Appellant was employed for approximately eleven months before his dismissal. The trial court found, and this court upholds that finding, that the Respondent had a valid substantive reason to investigate the fuel consumption incident but failed entirely in its obligation to observe procedural fairness. The investigation report implicated the Appellant, but the technical team's own report acknowledged that the alleged fuel loss of 37 litres — when measured against the vehicle's stated consumption rate and the distances driven — was not wholly conclusive. The Respondent also failed to produce the fuel attendant who had allegedly fuelled the vehicle and no police report was made. The termination was therefore procedurally flawed rather than entirely baseless. Balancing all these considerations, this court is of the view that an award of six months' gross salary is fair and appropriate in the circumstances. Six months' compensation at Kshs. 60,444.00 per month totals to Kshs. 362,664.00. 27.I am therefore inclined to allow the appeal and order as follows;i.The judgment and decree of the trial court in Milimani CMELRC No. 1800 of 2019 delivered on 15th February 2024, be and is hereby set aside.ii.One (1) month's salary in lieu of notice …………………………………. Kshs. 60,444.00iii.Six (6) months compensation for unfair termination of employment …..Kshs. 362,664.00Total of award ………………………………………………….……Kshs. 423,108.00iv.The Respondent be and is hereby ordered to issue the Appellant with a Certificate of Service fourteen (14) days from this judgment of court.v.Each party bears their costs of the appeal. DELIVERED, DATED AND SIGNED THIS 14TH DAY OF MAY 2026.D. K. NJAGI MARETEJUDGEAppearances:Mr. Maina instructed by Mwakio Kirwa & Company Advocates for the AppellantMiss Kagori instructed by Macharia Burugu & Co. Advocates for the Respondent.