Lerner v H Young & Company (EA) Limited (Cause E381 of 2022) [2026] KEELRC 2280 (KLR) (29 July 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **CAUSE NO. E381 OF 2022** *(Before D. K. Njagi Marete, J.)* **BETWEEN** **YAKOV ZEEV LERNER …………………………………………………… CLAIMANT** **VERSUS** **H. YOUNG & CO. (EA) LIMITED ……………………………………… RESPONDENT** **JUDGMENT** This matter came to court by way of a Statement of Claim dated 7th June, 2022. It does not disclose any issue in dispute on its face. The Respondent in a Statement of Response dated 27th September, 2022 denies the claim in its entirety, save for limited admissions, and prays that the suit be dismissed with costs. The Claimant in a Reply to the Statement of Response dated 7th November, 2022 joins issue with the Respondent and reiterates the claim as pleaded. This judgment is rendered on the basis of the pleadings, the documentary exhibits annexed thereto and produced by the parties, and the parties' respective written and supplementary submissions filed in this cause. The Claimant's case is that he was first employed by the Respondent in 1991 and has, at all material times relevant to this suit, served as the Respondent's Technical Director. He is a citizen of the State of Israel, working in Kenya under a work permit sponsored by the Respondent. The terms of the Claimant's employment were reduced into a remuneration table dated 8th September 2011, covering the period 1st June, 2011 to 31st May, 2013 and providing*, inter alia*, for a monthly overseas salary of USD 12,500.00, a local salary of Kshs. 360,000.00, life insurance, medical cover upgraded to “Gold”, gratuities, private mobile calls of up to Kshs. 10,000.00 per month, housing in Karen, flights home twice a year business class for the Claimant and his wife and twice a year economy class for his son Rom. This incudes an end-of-year bonus of 0.75% of project turnover, and home internet of up to Kshs. 10,000.00 per month. Upon expiry of the stated term, the Claimant's employment continued on the same terms by constructive renewal, a fact admitted by the Respondent in the Statement of Response. In 2015, following discussions with the Respondent's Managing Director, the Claimant's local salary was revised upwards to Kshs. 475,000.00, a fact similarly admitted by the Respondent. The Claimant's case is that from 2018 the Respondent began to renege on these terms, particularly by: converting the bonus payment from a net to a gross sum in 2019, thereby occasioning him a loss; failing to pay his bonus for 2020 to date; failing to pay or upgrade his life insurance; failing to upgrade his medical cover; failing to pay for his son's annual flights from 2016 to date; failing to pay for his home internet besides failing to meet the cost of his private mobile calls. The Claimant's further case is that upon raising these grievances through meetings and correspondence between October and December, 2021 he was repeatedly threatened with termination and that the Respondent, by a letter dated 24th January, 2022 unilaterally curtailed his duties in purported reliance on a client complaint dated 12th November, 2019 concerning the Olkaria I Additional Unit 6 Geothermal Power Plant Project. He contends that this was a pretext, advanced more than two years after the event and only after he had pressed for payment of his dues and that it amounted to retaliation. The Claimant's further case is that upon issuing a demand letter dated 18th February, 2022 through his advocates, the Respondent's then advocates responded on 21st February, 2022 stating that the Respondent “reserves the right to take disciplinary action against [the Claimant] for insubordination and insolence”, which the Claimant contends was a further act of victimization issued in direct retaliation for his lawful demand. The Claimant accordingly pleads particulars of malicious victimization and retaliation as follows: 1. *Constant threats of termination on account of pursuing unpaid dues.* 2. *Unilateral reduction of duties and roles of the Claimant.* 3. *Exclusion from official functions and projects of the Respondent.* 4. *Unilateral reassignment of duties with a view to causing undue hardship to the Claimant.* 5. *Unwarranted accusations of disciplinary misconduct with a view to building up towards termination.* He prays as follows: 1. *A declaration that the Respondent's conduct amounted to an unfair labour practice contrary to Article 41(1) of the Constitution;* 2. *A declaration that he was entitled to a salary increment on the basis of legitimate expectation;* 3. *General damages for the alleged violation of his fundamental right under the Constitution;* 4. *Payment of all outstanding dues of USD 500,793.75 and Kshs. 870,000.00;* 5. *An award of exemplary or punitive damages; and* 6. *Costs of the suit* The Respondent's case, as set out in the Statement of Response, is a denial of the claim save for limited admissions. The Respondent admits the descriptive facts of the parties and of the Claimant's continued employment on the 2011 terms, admits the 2015 salary revision, but denies that the bonus was ever agreed to be a net sum, denies any legitimate expectation of further increments, and denies having threatened or victimised the Claimant in any respect. The Respondent's further case is that the letter of 24th January, 2022 was a legitimate, managerial response to a demand made by the client, Fichtner GmbH & Co. KG on 12th November, 2019 in respect of the Olkaria I AU6 project, that the Claimant be removed as the Contractor's representative on site and was not retaliatory. The Respondent contends that there has been no demotion, transfer, reduction of salary or change of designation and that the Claimant remains in continuous, unbroken employment to date, over thirty years' standing, factors which the Respondent says are inconsistent with any claim of unfair labour practice. On the question of bonus, the Respondent's Statement of Response had pleaded an admitted sum of USD 57,000.00. This position was, however, revised in the Respondent's written and supplementary submissions, where, supported by a computation dated 16th April, 2024 the Respondent admits liability only to the extent of USD 44,867.00, being the sum it contends is properly computed on the basis of the Claimant's actual scope of involvement in the relevant projects, namely the GDC project and the Olkaria I Geothermal Design-Only project. The Respondent maintains that the balance of the Claimant's claim of USD 445,354.00 is speculative, unparticularised, and unsupported by any credible computation tying it to the Claimant's true contractual entitlement. On the remaining heads of claim, the Respondent's case is that the Claimant has not specified which five years his life insurance claim relates to, nor shown any unmet expense; the Claimant continues to enjoy the highest “Gold”/“Elite Care” tier of medical cover and has benefited from it on at least two occasions of heart surgery. The flights benefit for the Claimant's son was understood between the parties to lapse upon the son attaining eighteen years and the Respondent has at all times settled the Claimant's mobile telephone bills, inclusive of the private calls and home internet data bundled therein as evidenced by its post-paid Safaricom billing records. On the Notice to Produce dated 20th August, 2024 the Respondent's case, set out in the Replying Affidavit of its Managing Director, Joseph Schwartzman, sworn on 18th March, 2025 is that the documents sought were either irrelevant to the pleaded claims, already in the Claimant's possession (such as his payslips and P9 forms accessible on iTax), or simply did not exist as alleged. These include documentation of electricity or radio costs, which the Respondent contends it was under no contractual obligation to meet. The Respondent prays that the suit be dismissed in its entirety, save for the admitted sum, with costs to the Respondent. The issues for determination therefore are; 1. What were the terms and conditions of the Claimant's employment material to this suit? 2. Whether the Respondent breached those terms and conditions, and the particulars and extent thereof. 3. Whether the Claimant had a legitimate expectation to a salary increment. 4. Whether the Respondent's conduct amounted to an unfair labour practice contrary to Article 41(1) of the Constitution. 5. Whether the Claimant is entitled to the reliefs sought, and to what extent. 6. Who bears the costs of the suit. The 1st issue for determination is what were the terms and conditions of the Claimant's employment material to this suit. This is not seriously in dispute. The remuneration table dated 8th September, 2011 is in evidence as an executed document. Its authenticity and continued applicability, as extended by constructive renewal and as varied by the agreed 2015 increase of the local salary component to Kshs. 475,000.00 are admitted in the Statement of Response. I find and hold that the terms and conditions of the Claimant's employment material to this suit are as set out in the said remuneration table, as varied in 2015. The 2nd issue for determination is whether the Respondent breached those terms and conditions, and the particulars and extent thereof. I address each of these particulars in turn as here under; On bonus, the Claimant pleads that the 0.75% end-of-year bonus was, by an unwritten but binding term, payable net of statutory deductions. The written remuneration table is silent on this specific point. The Respondent's own Statement of Response, however, avers that “the Claimant's bonus payment for 2019 was computed as a gross amount rather than a net amount to enable the Respondent [to] make the necessary statutory deductions from the said amount” — itself an admission that the practice changed in 2019, and, by clear implication, that the bonus had hitherto been computed net. No notice of this variation in writing was produced as required by section 13 of the Employment Act, 2007. I find that the bonus was, until 2019, payable net, and that the Respondent's unilateral conversion to a gross basis from 2019 was not validly effected. As to quantum of the bonus, this is the most keenly contested figure in the suit. The Claimant pleads USD 445,354.00 as the bonus outstanding from 2020 to the date of filing, relying on a tabulation annexed to his pleadings. The Respondent, for its part, places before the court a computation dated 16th April, 2024 tying its admitted sum of USD 44,867.00 to two named projects net of external commitments, and points moreover to documentary proof that the Kenya Railways Lot ‘D’ contract had a total value of Kshs. 4,577,041,108.57, against which the Claimant's own historical bonus claims, including his own letter and computation of September, 2018 demanding USD 281,545.00, were themselves based on a narrower scope-of-work value rather than the gross contract sum. A bonus claim of this character and magnitude is in the nature of special damages, which must not only be specifically pleaded but strictly proved. The Claimant's tabulation, without more, does not discharge this burden, particularly where his own prior practice is inconsistent with the wider basis of computation he now urges upon the court. I am satisfied, on a balance of probabilities, that the only sum strictly proved on this record is the Respondent's admitted figure of USD 44,867.00, and I so find. As to life insurance, the Claimant claims USD 25,440.00 for “5 years” without identifying which years, and without producing any evidence of a policy taken, a premium paid, or an expense incurred and unreimbursed. The written term itself contemplates a fixed, once-off computation tied to the original 2011–2013 period, not a perpetual annual entitlement, and no basis is shown for extrapolating it to the period now claimed. This head is not proved to the required standard and is dismissed. As to the medical cover upgrade claimed at USD 20,000.00, it is not disputed that the Claimant has at all material times enjoyed the highest “Gold”/“Elite Care” tier of cover, inclusive of his spouse, and that he has in fact benefited from this cover, including for two heart procedures. No specific unmet medical expense is particularised or proved. This head is dismissed. As to the claim of USD 10,000.00 for his son's flights, the written term makes no provision for an age limit, and the Respondent's contention that the benefit lapsed at the son's eighteenth birthday is not supported by any document placed before the court. To this extent, the Respondent has not disproved the underlying entitlement. The Claimant has, however, equally failed to particularise the relevant period, the number of trips foregone, or the cost per trip, such that the figure of USD 10,000.00 remains an unproved estimate. A finding on liability without corresponding proof of quantum cannot found a monetary award, and this head is, with some reluctance, dismissed for want of strict proof of quantum. As to the claims for home internet (Kshs. 570,000.00) and private calls (Kshs. 300,000.00), the latter is pleaded, on its face, as “an estimate of Kshs. 5,000.00 per month”. A claim that is, by the Claimant's own pleading, an estimate cannot simultaneously be said to be strictly proved. The Respondent has, in addition, produced documentary evidence of its post-paid mobile billing arrangements, under which it has continued to settle telephone costs on the Claimant's account, lending credence to its position that this benefit has, in substance, continued to be honoured, if not always in the precise form pleaded. Both heads are dismissed for want of strict proof. The 3rd issue for determination is whether the Claimant had a legitimate expectation to a salary increment. The principles are settled: there must be an express, clear and unambiguous promise, the expectation itself must be reasonable, the representation must be one which it was lawful and competent for the decision-maker to make and it cannot run contrary to law — see **Communications Commission of Kenya & 5 others v Royal Media Services Limited & 5 others**, **SC Petition No. 14, 14A, 14B & 14C of 2014; [2015] KESC 13 (KLR)**, and, to similar effect, **Muthuuri & 4 others v Attorney General & 2 others, SC Petition No. 15 (E022) of 2021; [2023] KESC 52 (KLR)**. The single, negotiated increase of 2015 was a product of mutual discussion, not a unilateral representation by the Respondent of future, automatic increments. Beyond that single instance, the Claimant has not placed before the court any letter, email, minute or other contemporaneous document evidencing an express promise that his local salary would be periodically or further revised upwards. A single past increase, negotiated rather than promised, does not, without more, found a legitimate expectation of continuing entitlement. This issue is determined against the Claimant and the declaration sought is declined. The 4th issue for determination is whether the Respondent's conduct amounted to an unfair labour practice contrary to Article 41(1) of the Constitution. It is the heart of this suit. Two matters bear close scrutiny: the letter of 24th January, 2022 curtailing the Claimant's duties, and the letter of 21st February, 2022 threatening disciplinary action. On the first, it is notable that when the underlying client complaint was first raised on 12th November 2019, the Respondent's own contemporaneous response to the client defended the Claimant in the firmest terms, describing the client's decision to remove him as “punitive, rushed, misinformed and without regard to the correct and accurate facts and circumstances of the matters alleged.” It is this very same, already-disputed allegation that the Respondent resurrected, over two years later, to justify a unilateral curtailment of the Claimant's duties and it did so within weeks of the Claimant's escalating demands for payment of his contractual dues between October and December, 2021. The proximity in time between the Claimant's assertion of his rights and the Respondent's adverse action, taken together with the Respondent's own prior rejection of the substance of the very allegation it later relied upon, supports an inference that the letter of 24th January, 2022 was retaliatory in character rather than a *bona fide* exercise of managerial prerogative. I am guided by the reasoning in **Ronald Kampa Lugaba v Kenol Kobil Limited [2016] eKLR**, where adverse action following closely upon an employee's assertion of his rights, anchored on a stale and previously unaddressed allegation, was found to disclose a retaliatory motive. I accept, as the Respondent submits, that there was here no demotion, transfer or reduction of salary of the kind present in that case; Article 41(1) of the Constitution is not, however, confined to such drastic measures and marginalisation or curtailment of duties, where retaliatory, equally offends the right to fair labour practices. On the second matter, the letter of 21st February, 2022 is unambiguous on its face. It was written in direct response to a lawful demand for payment of contractual dues issued through the Claimant's advocates and it states that the Respondent “reserves the right to take disciplinary action against [the Claimant] for insubordination and insolence” on account of conduct which, on the correspondence available, amounts to no more than the Claimant lawfully pursuing what he believed to be his contractual entitlements through counsel. An employer's general prerogative to discipline its employees does not extend to threatening discipline as a response to the lawful exercise of an employee's right to demand payment of his dues. This is squarely the conduct contemplated as an unfair labour practice and engages the protective intent of section 46(h) of the Employment Act, 2007. I am not persuaded by the Respondent's reliance on **Macharia v Ambe [2025] KEHC 14583 (KLR)** for the proposition that unsubstantiated allegations remain mere assertions; this is not a case of bare, undocumented assertion but one supported by contemporaneous correspondence authored by the Respondent's own advocates and produced before court. I therefore find that the Respondent's conduct, in the particulars set out at paragraphs 29 and 30 above, amounted to an unfair labour practice contrary to Article 41(1) of the Constitution. I do not find the remaining, more generally pleaded particulars of exclusion from official functions and broader unilateral reassignment to be independently established on the evidence beyond the two instances already addressed. On the Notice to Produce dated 20th August, 2024 and the adverse inference urged by the Claimant, I find the Respondent's Replying Affidavit to have adequately accounted for the non-production of documents relating to rental, electricity and radio costs, none of which form part of the Claimant's written terms of employment. No adverse inference arises on that account as was observed in the authority of **Aluoch v Kenya Ports Authority & another [2025] KEELRC 1756 (KLR)**. The 5th issue for determination is whether the Claimant is entitled to the reliefs sought. Arising from the findings above, the Claimant is entitled to: a declaration that the Respondent's conduct, to the extent found at paragraphs 29 and 30, amounted to an unfair labour practice contrary to Article 41(1) of the Constitution; payment of the admitted and proved bonus sum of USD 44,867.00; and general damages for the violation of his rights under Article 41(1). On quantum of general damages, I am guided by the comparable award in **Gichuki v Kenya Power & Lighting Company Plc, Petition E021 of 2024; [2025] KEELRC 2578 (KLR)**, where this Court awarded Kshs. 450,000.00 in general damages for a breach of Article 41 of the Constitution in circumstances where no order for unfair termination was made. The present case did not involve termination, demotion or loss of remuneration, but it does involve a long-serving, senior employee of materially higher remuneration than the claimant in that case, and a documented written threat of disciplinary action issued through advocates in direct response to a lawful demand for payment, which I consider a more acute instance of retaliatory conduct than mere administrative casualisation. Having regard to these factors, I assess general damages at Kshs. 1,000,000.00. The claims for life insurance, medical cover upgrade, flights for his son, home internet and private calls are, for the reasons given, dismissed for want of strict proof. The declaration of legitimate expectation to a salary increment is declined, and consequently no order for a salary increment arises. No separate award of exemplary or punitive damages is made; damages of that character do not ordinarily lie in actions founded on breach of contract as in the authority of **Addis v Gramophone Co. Ltd [1909] AC 488**. The seriousness of the Respondent's conduct has, in any event, already been reflected in the general damages assessed above. The 6th issue for determination is costs. The Claimant has substantially succeeded on the principal and most contested issue in this suit, namely the finding of an unfair labour practice, and has secured a monetary award. Although several specific heads of his claim have failed for want of proof, he remains on a balance, the substantially successful party. Costs shall therefore follow the event and be borne by the Respondent. In the result, I am inclined to allow the claim in part and order as follows: 1. A declaration be and is hereby issued that the Respondent's conduct, in unilaterally curtailing the Claimant's duties by the letter dated 24th January, 2022 and in threatening disciplinary action against him by the letter dated 21st February, 2022 both in retaliation for the Claimant’s lawful assertion of his contractual entitlements, amounted to an unfair labour practice contrary to Article 41(1) of the Constitution. 2. The Respondent be and is hereby ordered to meet and pay the claimant’s unpaid bonus at USD 44,867.00. 3. The Respondent be and is hereby ordered to meet and pay the Claimant’s general damages for violation of Article 41(1) of the Constitution at Kshs. 1,000,000.00. **Total of award …………………………….USD 44,867.00** and **Ksh. 1,000,000.00** 1. The costs of this claim shall be borne by the Respondent. 2. Interest on item (iii) above shall accrue as follows: on the admitted sum of USD 57,000.00, from the date of filing suit being 7th June 2022; on the balance being the contested quantum determined by this Court, from the date of this judgment; in each case at court rates until payment in full. 3. Interest on item (iv) above shall accrue from the date of this judgment till payment in full, at court rates. Delivered, dated and signed this **29th** day of **July** 2026. **D. K. Njagi Marete** **JUDGE** Appearances: 1. Mr. Josiah instructed by H.M.O Josiah and Company Advocates for the Claimant. 2. Mr. Wandati instructed by Kisilu Wandati & Company Advocates for the Respondent.