https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2101

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT NAKURU CAUSE NO. E050 OF 2025 (Before Hon. Lady Justice Anna Ngibuini Mwaure) HOSEA KIPLIMO KIPCHUMBA…………..….…….… CLAIMANT VERSUS MENENGAI OIL REFINERIES LIMITED …...……………….. ………..RESPONDENT JUDGMENT Introduction 1. The Claimant commenced this suit via a Statement of Claim dated 13th August 2025, seeking the following orders that: a.A declaration that the Claimant was unlawfully terminated from employment and the same was not within the ambit of the Employment Act 2007, and other employment laws. b.The Claimant herein be awarded 12 months’ compensation for unfair termination as provided under section 49(1)(c) of the Employment Act, 2007 amounting to Kshs.1,800,000/= ELRC CAUSE NO E050 OF 2025 JUDGMENT 1 | P A G E c. The Claimant herein to be awarded one month’s salary in lieu of notice amounting to Kshs.150,000/= d. The court to award for overtime amounting to Kshs. 64,615/=. e.The court to award for work done over public holidays amounting to Kshs.5,000/=. f. The court be pleased to order the Respondent to pay interest on all claims. g.The Claimant be awarded costs of this claim. h.The court grant any other relief as it deems necessary to grant. Claimant’s case 2. The Claimant avers that on or about 13th January 2023, he was employed by RAIMDF Limited as an Accounts Payable Accountant via an employment agreement for a monthly salary of Kshs.130,000/=. 3. The Claimant avers that his first fixed-term contract with RAIMDF Limited ran from 24th January 2023 to 23rd January 2025, and before its lapse, he was transferred without consultation to Respondent organisation on 20th September 2024, where he signed a new three-year contract effective 1st ELRC CAUSE NO E050 OF 2025 JUDGMENT 2 | P A G E October 2024 to 30th September 2027 with a revised salary of Kshs.150,000/=. 4. On 7th November 2024, the Claimant avers that the Respondent terminated his employment abruptly, instructing him to hand over company property without issuing a notice to show cause or conducting a disciplinary hearing as required under Section 41 of the Employment Act, 2007. 5. The Claimant avers that the termination was unfair and unlawful, adding that he worked 11-hour days without overtime pay, was denied annual leave, and worked on public holidays and weekends without compensation. Respondent’s Response to the statement of claim 6. In opposition to the Statement of Claim, the Respondent filed a response to the statement dated 3rd February 2026. 7. The Respondent admits that the Claimant was transferred from RAIMDF Limited, a sister company, and acknowledges the existence of the employment contract dated 1st October 2024. However, the Respondent maintains that the termination on 7th November 2024 was lawful and procedural, carried out under Clauses 8(b) and (c) of the contract, which ELRC CAUSE NO E050 OF 2025 JUDGMENT 3 | P A G E allowed either party to terminate by notice or payment in lieu of notice. 8. The Respondent denies that the termination was unfair or unprocedural, arguing that no disciplinary hearing was necessary since the Claimant was not dismissed for misconduct. 9. The Respondent further contends that the Claimant was paid his accrued leave and notice dues upon clearance, and denies claims for overtime, public holiday pay, and unfair termination compensation. 10. The Respondent asserts that the Claimant is attempting to rewrite the contract to create non-existent liabilities and unjustly enrich himself, and therefore prays that the entire claim be dismissed with costs. Claimant’s evidence in court 11.CW1, the Claimant, adopted his written statement dated 13th August 2025 together with his bundle of documents dated even date marked as exhibits 1 to 8, in his evidence in chief. 12.In cross-examination, CW1 stated that he was transferred from RAIMDF Limited to the ELRC CAUSE NO E050 OF 2025 JUDGMENT 4 | P A G E Respondent’s company without prior consultation, though he had raised concerns. He explained that he was asked to stand in for an employee who had resigned, and later another person was brought to replace him. He was then instructed to work for the Respondent and signed a contract towards the end of the month. 13.CW1 further testified that at the Respondent’s company his salary was increased, but his duties were altered. He acknowledged signing the new contract. He recalled that while at RAIMDF he had once been issued with a warning letter, but at the Respondent’s company he was never issued with any. He stated that he worked for about 11 hours daily and sometimes during public holidays, though he had no documentary proof. He explained that during public holidays, employees would receive emails to proceed on leave, but some staff in the Finance Department, including himself, were required to work. 14.CW1 added that his official working hours were Monday to Friday from 8:00 a.m. to 5:00 p.m., and Saturdays from 8:00 a.m. to 1:00 p.m. However, he was often required to work longer hours, which was considered part of the job and was not ELRC CAUSE NO E050 OF 2025 JUDGMENT 5 | P A G E compensated. He confirmed that he was issued with a termination notice on 7th November 2024, and was paid his salary up to that date, together with accrued leave and one month’s salary in lieu of notice. He emphasized that he was not subjected to any disciplinary procedure, despite Clause 8(b) of the contract providing for termination by notice. 15.In re-examination, CW1 clarified that the employment contract was drafted entirely by the employer, and he had no input in its clauses. He stated that refusal to sign would have left him jobless. He confirmed that he worked with RAIMDF from 23rd January 2023 to 30th September 2024, and that the owners of RAIMDF were the same as those of the Respondent. He explained that he was authorized by his boss to move to the Respondent and worked there for slightly over one month. He received leave pay from RAIMDF and in total worked for both companies for about two years and ten months. He concluded by stating that his termination was unfair. Respondent’s evidence in court 16.RW1, Peter Kamenye, the Respondent’s Senior Resource Manager, adopted his witness statement ELRC CAUSE NO E050 OF 2025 JUDGMENT 6 | P A G E dated 3rd February 2026 together with the bundle of documents dated even date as his evidence in chief. 17. In cross-examination, RW1 testified that when hiring employees, the Respondent issued them contracts to read and sign if satisfied with its contents, and CW1 was similarly given a draft contract which he accepted. He maintained that CW1 was not unlawfully terminated, as the termination followed Clause 8 of the contract. RW1 explained that there was no need to issue a notice to show cause since CW1 was paid his final dues, as reflected in the November 2024 payslip. He denied CW1’s entitlement to 12 months’ compensation, noting that employees were required to work 48 hours per week, while CW1 worked 45 hours. 18. In cross-examination, RW1, the Human Resource Manager, acknowledged familiarity with the Employment Act and stated that termination depends on the reason given. He admitted CW1 was not subjected to a disciplinary hearing but insisted that termination by notice was permissible. 19.In re-examination, RW1 reiterated that no misconduct was involved, hence no need for a notice to show cause or disciplinary proceedings. CW1 was ELRC CAUSE NO E050 OF 2025 JUDGMENT 7 | P A G E issued a termination letter and paid salary in lieu of notice, which RW1 considered lawful and procedurally proper. 20. Parties filed their respective written submissions. Claimant’s submissions 21. The Claimant’s submissions raise three issues. First, whether he was an employee of the Respondent. The Claimant submitted that he did not dispute, as both parties produced the employment contract and termination letter, and the Respondent’s own witness confirmed that he served as Accounts Payable Accountant from 1st October to 7th November 2024. 22. Second, whether the termination was lawful. The Claimant submitted that reliance on Clauses 8(b) and 8(c) of the contract cannot override statutory protections under sections 41, 43, and 45 of the Employment Act. The Claimant stresses that no valid reason was given in the termination letter and no disciplinary process was followed. In Kamtix Cleaners Limited v Odhiambo [2025] KEELRC 2475, the court held that statutory protections cannot be waived by contract. Similarly, in Ulalo v Nation Media Group [2024] KEELRC 574, the ELRC CAUSE NO E050 OF 2025 JUDGMENT 8 | P A G E Court emphasized that contractual autonomy is circumscribed by mandatory statutory safeguards. In Edward Ngarega Gacheru v Nation Media Group Limited [2019] KEELRC 1337 (KLR), the Court noted that contracts designed to defeat minimum protections under the Employment Act will be rectified to align with statutory standards. The Claimant also relies on Langat v Co- operative Bank of Kenya Ltd [2017] KECA 152 (KLR), where the Court of Appeal held that courts will not rewrite contracts unless they conflict with the law. 23. On substantive justification, the Claimant relied on section 43(2) of the Employment Act that requires employers to prove valid reasons for termination. In Kagai v Kenya Equatorial Hotels Limited t/a Mombasa Continental Resort [2024] KEELRC 2641 (KLR), the Court held that termination clauses cannot be invoked without a valid reason. Likewise, in Janet Nyandiko v Kenya Commercial Bank Limited [2014] KECA 293 (KLR), the Court of Appeal stressed that employers must explain reasons for termination in a language the employee understands and allow representation, failing which termination is procedurally unfair. The Claimant ELRC CAUSE NO E050 OF 2025 JUDGMENT 9 | P A G E argued that since no valid reason was given and no fair procedure followed, the Respondent failed both substantive and procedural fairness tests under Section 45(2) of the Employment Act. 24.Finally, the Claimant submits that he is entitled to reliefs including compensation for unfair termination under section 49(1)(c) of the Employment Act, calculated at Kshs. 1,800,000 being 12 months’ salary, together with notice pay, overtime dues, public holiday pay, issuance of a certificate of service, costs, and interest. Respondent’s submissions 25. The Respondent submitted that the Claimant’s termination was lawful and consistent with both the Employment Act, 2007 and the Employment Contract dated 1st October 2024. The Respondent relied on Section 35 and Section 36 of the Employment Act, which permit termination by notice or payment in lieu of notice, and argued that clauses 8(b) and 8(c) of the contract were valid and enforceable. The Respondent rejected the Claimant’s contention that these clauses conflict with sections 41, 43, and 45 of the Employment Act, noting that the Claimant was not dismissed for misconduct and therefore no ELRC CAUSE NO E050 OF 2025 JUDGMENT 10 | P A G E disciplinary hearing or notice to show cause was required. The Respondent also relied on section 45(2) of the Employment Act and maintains that the termination met the statutory threshold of fairness, as notice was issued and dues paid. 26.The Respondent further submitted that service pay is not payable since the Claimant was a member of NSSF, and denied claims for overtime and public holiday pay, pointing to clause 5 of the contract which required overtime to be recorded and approved, something the Claimant never did. The Respondent also submitted that accrued leave was settled and evidenced in the November 2024 payslip. In support, the Respondent relied on the case of Macorius Odhiambo Onyango v Seniors Driving School Ltd [2018] KEELRC 765 where the court upheld termination by notice under section 35 of the Employment Act as lawful. 27. Accordingly, the Respondent submitted that the Claimant was lawfully and procedurally terminated, is not entitled to the reliefs sought, and the suit should be dismissed with costs. Analysis and determination ELRC CAUSE NO E050 OF 2025 JUDGMENT 11 | P A G E 28. The court has considered the pleadings and the submissions on record; the issues for determination are as follows: a.Whether the Claimant was unlawfully and unfairly terminated by the Respondent; b.If(a) above is in the affirmative, whether the Respondent is entitled to the reliefs sought; c. Who should bear the costs? 29. The twin principles for fair termination are procedural fairness and substantive justification as set out in sections 41, 43 and 45(2) of the Employment Act. In Walter Ogal Anuro V Teachers Service Commission [2013] KEELRC 386 (KLR) the court held as follows: “However, for a termination to pass the fairness test, it must be shown that there was not only substantive justification for the termination but also procedural fairness.” 30. Section 35 of the Employment Act provides as follows: “A contract of service not being a contract to perform specific work, without reference to time or to undertake a journey shall, if ELRC CAUSE NO E050 OF 2025 JUDGMENT 12 | P A G E made to be performed in Kenya, be deemed to be— (a) where the contract is to pay wages daily, a contract terminable by either party at the close of any day without notice; (b) where the contract is to pay wages periodically at intervals of less than one month, a contract terminable by either party at the end of the period next following the giving of notice in writing; or (c) where the contract is to pay wages or salary periodically at intervals of or exceeding one month, a contract terminable by either party at the end of the period of twenty-eight days next following the giving of notice in writing. Subsection (1) shall not apply in the case of a contract of service whose terms provide for the giving of a period of notice of termination in writing greater than the period required by the provision of this subsection which would otherwise be applicable thereto. If an employee who receives notice of termination is not able to understand the notice, the employer shall ensure that the ELRC CAUSE NO E050 OF 2025 JUDGMENT 13 | P A G E notice is explained orally to the employee in a language the employee understands. Nothing in this section affects the right— (a) of an employee whose services have been terminated to dispute the lawfulness or fairness of the termination in accordance with the provisions of section 46; or (b) of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law. An employee whose contract of service has been terminated under subsection (1)(c) shall be entitled to service pay for every year worked, the terms of which shall be fixed. This section shall not apply where an employee is a member of— (a) a registered pension or provident fund scheme under the Retirement Benefits Act; (b) a gratuity or service pay scheme established under a collective agreement; (c) any other scheme established and operated by an employer whose terms are more favourable than those of the service pay scheme established under this section; and ELRC CAUSE NO E050 OF 2025 JUDGMENT 14 | P A G E (d) the National Social Security Fund.” 31. Section 36 of the Employment Act provides as follows: “Either of the parties to a contract of service to which section 35(5) applies, may terminate the contract without notice upon payment to the other party of the remuneration which would have been earned by that other party, or paid by him as the case may be in respect of the period of notice required to be given under the corresponding provisions of that section.” 32. In this instant case, the Claimant was first employed by RAIMDF Limited on a fixed-term contract from January 2023 to January 2025, but before its lapse he was transferred to the Respondent on 20th September 2024 and signed a new three-year contract effective 1st October 2024 with a salary of Kshs.150,000/=. On 7th November 2024, his employment was terminated abruptly without a notice to show cause or disciplinary hearing, which he claims was unfair under Section 41 of the Employment Act, 2007, adding that he worked long hours without overtime pay, was denied annual ELRC CAUSE NO E050 OF 2025 JUDGMENT 15 | P A G E leave, and worked on public holidays without compensation. However, the Respondent confirms that the Claimant was transferred and given a contract but insists the termination was lawful under Clauses 8(b) and 8(c) of the Employment contract between the Claimant and the Respondent which allow termination by notice or payment in lieu of notice. It argues no disciplinary hearing was necessary since the Claimant was not dismissed for misconduct, and that he was paid accrued leave and notice dues. The Respondent denies liability for overtime, public holiday pay, or compensation, asserting the Claimant is attempting to rewrite the contract to impose non-existent obligations. 33. On the issue of whether the Claimant was an employee of the Respondents he lawfully has contracts from both RAIMDF and Menengai Oil Refineries. That matter is therefore settled. 34.As for the termination of contract it is trite law however on employment that no employee can just have his contract terminated without any valid reason or at least following the procedure set out in Section 41 of the Employment Act. Sections 43 and 45 of the Employment Act must also be ELRC CAUSE NO E050 OF 2025 JUDGMENT 16 | P A G E adhered to prior to termination of contract of employment. Section 45(1) in particular provides for valid reason to be presented in terminating an employee. 35. In the leading case of KENFREIGHT (E.A) LIMITED -V- BENSON NGUTI 2016 e(KLR) the Court of Appeal held that: “employers must comply with both the substantive and procedural fairness requirements under the Employment Act even if the employer gives a Notice to terminate employment.” 36. It is emphasised law that an employee cannot rely on a contractual notice clause to avoid compliance with procedural safeguards prescribed by Section 41 of the Employment Act. Even where an employee gives notice or pays salary in lieu of notice the employer must still have a valid and fair reason for termination (Section 43 & 45) and must follow the hearing procedure under Section 41 before terminating employment. 37. So, the notice of termination is not a substitute for procedural fairness and Employment Acts Statutory Protection override any contractual term that is inconsistent with them. ELRC CAUSE NO E050 OF 2025 JUDGMENT 17 | P A G E 38. The said provision is fortified by KAMTIX CLEANERS LIMITED -VS- ODHIAMBO (2025) KEELRC 2475 where the court held: “I firmly hold that this provision cannot be waived or modified through stipulation within an employment contract. An Appellant cannot be allowed to press the court to ignore deliberate contractual terms that amount to unfair labour practices under the suggested contract of not appearing to rewrite a contract for the parties.” 39. The Respondent did not give any indication of the reasons of terminating the Claimant from his employment after issuing him barely a month earlier with a three-year contract. The Respondent failed in the tests of substantive justification (giving a valid reason) and procedural fairness which following the right procedure. The court enters judgment in favour of the Claimant for unlawful termination. 40. The court will award the following reliefs to the Claimant after entering judgment in his favour. (a) 4 months compensation for unlawful termination - Kshs.600,000/= ELRC CAUSE NO E050 OF 2025 JUDGMENT 18 | P A G E (b) One month’s salary in lieu of notice Kshs.150,000/= - (c) Overtime is not awarded as it was clear from his contract he would not be compensated for overtime. Also, Public holidays pay is not proved as provided that he who alleges must prove (Section 106 of the Evidence Act). The same is declined. 41. Total award is Kshs.750,000/= plus interest at 14% per annum from date of judgment till full payment. 42. Claimant is awarded costs as well. 43. He is also to be given certificate of service within 30 days herein. Orders accordingly. Dated, Signed and Delivered virtually at Nakuru this 22nd Day of July, 2026. ANNA NGIBUINI MWAURE JUDGE ORDER In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief ELRC CAUSE NO E050 OF 2025 JUDGMENT 19 | P A G E Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes. A signed copy will be availed to each party upon payment of Court fees. ANNA NGIBUINI MWAURE JUDGE ELRC CAUSE NO E050 OF 2025 JUDGMENT 20 | P A G E