https://new.kenyalaw.org/akn/ke/judgment/keca/2026/960

Nyaga v Tata Chemicals Magadi Ltd & 3 others (Civil Appeal 617 of 2019) [2026] KECA 960 (KLR) (15 May 2026) (Judgment) Neutral citation: [2026] KECA 960 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal 617 of 2019 PO Kiage, LA Achode & WK Korir, JJA May 15, 2026 Between Maurice Nyaga Appellant and Tata Chemicals Magadi Limited 1st Respondent Eliud Sifuna 2nd Respondent Joshua Ukala 3rd Respondent Tata Chemicals Magadi Limited 4th Respondent (An appeal from the Judgment and Decree of the Employment and Labour Relations Court of Kenya at Nairobi (B. Ongaya, J.) dated 27th July, 2018 in ELRC Cause No. 1941 of 2011 Cause 1941 of 2011 ) Judgment 1.The appellant and four (4) others filed a joint Memorandum of Claim in the Employment and Labour Relations Court against the 1st respondent seeking various reliefs. The appellant specifically sought compensation for unlawful termination of services equivalent to twelve (12) months salary, computed as Ksh.187,000x12 months = Ksh.2,244,000. Further, he asked for compensation for unlawful redundancy equivalent to salary & benefits expected till the attainment of the statutory age of retirement being, sixty (60) years, taking into consideration expected aimed increments in line with the terms and conditions of service. 2.The appellant and his co-claimants alleged that since commencement of their employment, they had served the 1st respondent with loyalty and diligence until 21st June 2011, when their services were terminated on account of ostensible redundancy. They claimed that the termination of their services on grounds of redundancy was not only unjustifiable but also unprocedural, unwarranted and illegal. In the result they prayed for judgment against the 1st respondent for;a.Damages for wrongful termination equivalent to twelve (12) months salary amounting to a total sum of Ksh.10,306,560.b.Bonus for the 3rd claimant amounting to Ksh.141,120.c.General damages against loss of expected earnings for the period remaining to retirement.d.Any other relief the court may deem fit to grant.e.Costs of the claim. 3.Vide a memorandum of defence amended on 2nd May 2012, the 1st respondent denied the allegations. It contended that termination of the claimants’ contracts of employment on grounds of redundancy was lawful and justified; the redundancies were carried out procedurally and therefore the claimants were not entitled to any damages; they were fully paid their terminal dues which were computed in accordance with the terms of their written contracts of employment, and over and above the applicable provisions of the law; the claims were an afterthought, misadvised, unmerited and without legal or factual basis. The 1st respondent deposed that the claimants were engaged under the provisions of their various employment agreements and were not unionisable. Further, it was indicated that at the time that they were declared redundant, the appellant held the position of Finance and Strategic Planning Manager. 4.Regarding the circumstances giving rise to the redundancies, the 1st respondent stated that over the previous three years, before the claimants were declared redundant, it was negatively affected due to externally driven dynamics such as the economic downturn which significantly affected the prices of its products resulting in a dramatic fall in sales worldwide. The 1st respondent explained that despite making concerted efforts to respond to the situation and regain profitability, the situation did not improve as anticipated, forcing it to restructure its operations and reduce its workforce by declaring some employees redundant. The criteria targeting staff reductions was initially through attrition as members who left would not be replaced. However, when that criteria failed to achieve the required results, it changed the criteria to skill-based, so that jobs would be collapsed within each function and staff not fitting the new roles would be declared redundant. The departmental heads identified a number of jobs that would be merged, the incumbent employees’ suitability for the job enlargement was then assessed and, based on their skill levels and past performance, the various departments were able to reduce the headcounts. The appellant and his co-claimants were some of the eight (8) affected employees. 5.The 1st respondent contended that the process of termination of the claimants’ employment was not discriminatory; that it was lawful and justified. Further, that through a series of meetings, the management informed all staff about the existing business circumstances and the intended redundancies. Memoranda were sent out to all employees and experts were hired to counsel and help staff deal with the psychological aspects of job loss. The 1st respondent stated that the process of terminating the employment of staff was intended to achieve a desired supervisory ratio of one supervisor/manager to every 6 workers and thus it targeted staff at the supervisory and management level only. It was claimed that the appellant took out a car loan from the 1st respondent which he had not settled at the time that he was declared redundant. The 1st respondent hence sought from him the balance of Ksh.172,285. In conclusion it was urged that the claimants are not entitled to the reliefs sought and, therefore, their case should be dismissed with costs. Further, the 1st respondent be granted the counterclaim in terms of the loan balance that the appellant owed it. 6The matter proceeded for trial before Mbaru, J who heard the testimonies of all the claimants and part of the testimony of the 1st respondent’s witness. The learned Judge was succeeded by Ongaya, J (as he then was) who heard the rest of the proceedings to conclusion. In his testimony, the appellant sought to rebutt the grounds for termination arguing that being in charge of the 1st respondent’s finances, he was aware of its financial position. He claimed that as of 31st March 2011, the 1st respondent had overachieved its target and bonuses were paid to appreciate staff. Moreover, the alleged redundancy was not genuine as the staff strength increased after he left. He denied owing the 1st respondent any monies although he at the same time admitted that he had a car loan when he was declared redundant. 7.The 1st respondent called one witness, Mr. John Gatura Kabera, its Human Resource Manager, who testified on its behalf. Mr. Kabera explained that the claim for retirement at the age of 60years had no basis as the retirement age was 55 years. He insisted that the claimants’ employment contracts were ended on account of redundancy and the reasons for the redundancy were given to them vide a memorandum dated 6th May, 2011. Mr. Kabera asserted that there was no wrongful termination and the claimants were not entitled to retirement dues as there was no guarantee that they would have worked for the 1st respondent till retirement. He contended that although they issued salary increments and bonuses in the year 2011, that was not a sign of improving business. 8.At the end of the trial, the learned Judge (Ongaya, J) delivered a judgment on 27th July, 2018, in favour of the appellant and his co-claimants and ordered as follows;a.The declaration that the termination of the claimants’ employment by way of redundancy was unfair.b.The respondent to pay each of the claimants 6 months’ gross salaries at the rate of last monthly pay by 01.10.2019 failing interest to run thereon at court rates from the date of the judgment till full payment.c.The respondent to recover from the 2nd claimant’s dues a sum of Ksh.172,285.00.d.The respondent to pay the claimants’ respective costs of the suit. 9.The appellant who was the 2nd claimant at the trial was aggrieved by part of the judgment of the trial court and filed this appeal, on 4 grounds, which in summary are that the learned Judge erred by;a.Awarding the appellant six (6) months’ gross salary instead of twelve (12) months gross salary, as compensation for unfair termination of his employment.b.Failing to award the appellant interest on the award from 21st June 2011, being the date of termination of his employment. 10.The appellant implored us to allow the appeal with costs. When the appeal came up for hearing, learned counsel Mr. Morara Omoke, holding brief for Mr. Nyamweya, appeared for the appellant while Mr. Wasonga, holding brief for Mrs. Wetende, appeared for the 1st respondent. There was no appearance for the 2nd and 3rd respondents. Parties had filed their written submissions prior which they briefly highlighted. 11.Mr. Omoke submitted that the appellant’s principal ground of appeal is the quantum of compensation for unfair termination. He contended that the termination was wrongful and arbitrary and thus it warranted the maximum 12 months salary compensation as provided under section 49(3)(c) of the Employment Act (the Act). Counsel relied on the decision in Benjamin Langwen v National Environment Management Authority [2016] eKLR to underscore the import of section 49(1) of the Act which stipulates that where termination of a contract of an employee is unjustified, the labour officer may recommend to the employer various remedies including the equivalent of a number of months wages or salary not exceeding (12) twelve months based on the gross monthly wage or salary of the employee at the time of dismissal. Counsel submitted that the declaration of redundancy was not proved. To substantiate this he argued that a trend of profitability challenges on the part of the 1st respondent was not demonstrated during trial; business expansion at the time was testament of a profitable operation; the appellant’s position continued to exist and another person was assigned to it, later the position was renamed; the process of staff rationalization targeted to achieve a ratio of one supervisor/manager for every 6 workers, was barely implemented, instead, some employees who left were recalled, some never left, and others who left had their jobs advertised soon after they had left. 12.Counsel submitted that under section 45 of the Act, the employer must not only prove that the reason for termination is valid and fair, but also that the employment was terminated in accordance with fair procedure pursuant to section 41 of the Act. To buttress this argument, he cited Mary Chemweno Kiptui v Kenya Pipeline Company Limited [2014] eKLR and Walter Ogal Anuro v Teachers Service Commission [2013] eKLR. It was contended that the 1st respondent did not demonstrate how the appellant was identified for redundancy. Referring to the decision of Maraga JA, as he then was, in Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 404 (KLR), counsel asserted that an employer must comply with all the conditions for implementing redundancy as stipulated under section 40(1) of the Act. He submitted that notification of the labour officer about the redundancy decision did not take place. Moreover, the appellant and his co-claimants were given only a 10 days’ notice, in breach of the statutory 30 days’ notice. Additionally, the manner of termination was oppressive and contemptuous to the appellant causing him to suffer economic hardship. It was submitted that no justification was offered for awarding the appellant interest from the date of judgment and not the date of termination. We were in the end urged to allow the appeal with costs. In particular that we should substitute the award of six (6) months’ gross salary as compensation for unfair termination with an award for twelve (12) months’ gross salary. Further that the award of interest from the date of the impugned Judgement be set aside and substituted with an order awarding the appellant interest from 21st June 2011, being the date of termination of his employment. 13.We inquired from Mr. Omoke whether he had cited any authority to support his argument that interest should begin running from the date of termination of employment and not the date of judgment. Counsel’s reply was that no authority had been cited but that according to practice, interest is awarded from the date when a certain payment ought to be due. 14.Submitting on behalf of the 1st respondent, Mr. Wasonga stated that the appellant, the 2nd and 3rd respondents were already paid the decretal sum on 17th August 2018, thereby discharging the award of interest. Further, the costs of the suit were taxed on 22nd May 2020 at Ksh.97,955.55 which amount was paid out to the appellant’s advocate on 19th October 2020. It was urged that the grounds of appeal do not challenge the findings of liability per se. We were invited to be guided by this Court’s decision in Teachers Service Commission v Joseph Wambugu Nderitu [2016] eKLR where the Court cited the case of Jabane v Olenja [1986] KLR 664 thus;“More recently, however, this Court has held that it will not lightly differ from the findings of fact of a trial judge who had the benefit of seeing and hearing all the witnesses and will only interfere with them if they are based on no evidence, or the judge is shown demonstrably to have acted on wrong principles in reaching the findings he did.” 15.Counsel contended that the trial court properly evaluated the evidence presented before it and arrived at findings that are firmly anchored in law and sound principles. He controverted the appellant’s argument that he was entitled to enhanced compensation of 12 months’ salary, submitting that in awarding the 6 month’s salary compensation, the trial court exercised its discretion judiciously and gave reasons for pegging the compensation at 6 months. We were urged to be guided by this Court’s decision in KIambaa Dairy Farmers Cooperative Society Limited v Rhoda Njeri & 3 Others [2018] KECA 150 (KLR) where the Court stated that compensatory damages lie in the discretion of the trial court and interference therewith on appeal must be approached with a measure of circumspection and on well-settled principles. Counsel further relied on this Court’s decision in Peter M. Kariuki v Attorney General [2014] eKLR where the Court outlined the principles to be observed by an appellate court when deciding whether it is justified in disturbing the quantum of damages awarded by a trial judge. 16.Referring to section 49(4) of the Act, which provides for considerations which a trial court ought to take into account before determining which remedy to grant for unlawful termination, counsel submitted that the learned Judge reckoned that the claimants did not contribute to their termination; that they had served for a long time; and that the 1st respondent had paid them their terminal dues including severance pay computed at 21 days for each completed computed year at work instead of the statutory 15 days. On the basis of those considerations, an award of 6 months’ salary was made. It was asserted that the power to award remedies under section 49 of the Act is discretionary although that discretion must be exercised judiciously. Moreover, an award of compensation for unlawful termination is supposed to compensate the employee and not to punish the employer. For this argument counsel relied on the holding in Hema Hospital v Wilson Makongo Marwa [2015] eKLR and on the principle of ‘restitutio in integrum’ which denotes that an injured party has to be restored as nearly as possible to a position he or she would have been had the injury not occurred. It was urged that the compensation that was paid to the appellant, in compliance with the judgment, and which he accepted, was reasonable in the circumstances as it provided adequate redress for the termination of his contract. 17.On reliance of the decision in Kiambaa Dairy Farmers Cooperative Society Limited v Rhoda Njeri & 3 Others (supra) where the Court observed that the 12 months maximum compensation ought to be reserved for the most egregious cases of abuse where there is blatant disregard of the rights and dignity of an employee who is being dismissed, counsel urged that the appellant’s plea for enhancement of the quantum of the award was not justified. On the question of interest, it was submitted that the award of interest is at the discretion of the court and the appellant’s claim that the interest should have been awarded from the date of termination has no legal basis. Citing Royal Media Services Limited & Another v Jakoyo Midiwo [2018] KECA 421 (KLR), counsel asserted that interest on general damages accrues from the date of judgment. He argued that the prayer on interest was not pleaded at the trial court and thus the appellant was estopped from rewriting his case. Mr. Wasonga concluded his submissions by submitting that no justifiable reasons had been advanced by the appellant to warrant the enhancement of the 6 months’ compensation that was awarded by the trial court nor to interfere with the holding on interest. He thus urged that the appeal should be dismissed in its entirety with costs to the 1st respondent. 18.Following the foregoing submissions made on behalf of the 1st respondent, we probed Mr. Omoke why he didn’t reveal to us that the decretal sum had been paid to the appellant. Further, we inquired whether, as a matter of fact, the matter was not moot. In response, counsel charged that whatever the outcome of the case, employers should be genuine when it comes to redundancy. 19.What is being challenged in this appeal is the exercise of discretion by the learned Judge and it is on this the appeal must turn, as a merit question. 20.Upon careful consideration of the appellant’s principal ground of appeal which is enhancement of the quantum of compensation for unfair termination, it is our finding, and we so hold, that the quantum of compensatory damages was at the discretion of the trial court. Kiage JA stated as much in Kiambaa Dairy Farmers Co-operative Society Limited v Rhoda Njeri & 3 Others (supra) in the following words;“Compensatory damages, the quantum of which is the sole issue in this appeal, lie in the discretion of the trial court and interference therewith on appeal must be approached with a measure of circumspection and then on narrow, well-settled principles. In Peter M. Kariuki v Attorney General [2014] eKLR this Court expressed itself thus on the subject;“The principles which guide an appellate court in this country in an appeal on award of damages are now well settled. In Kemfro Africa Ltd v Lubia & Another, (No. 2) 1987 KLR 30, Kneller, JA identified the principles as follows:‘The principles to be observed by an appellate court in deciding whether it is justified in disturbing the quantum of damages awarded by a trial judge were held by the former Court of Appeal of Eastern Africa to be that it must be satisfied that either the judge, in assessing the damages, took into account an irrelevant factor, or left out of account a relevant one, or that, short of this, the amount is so inordinately low or so inordinately high that it must be wholly erroneous estimate of the damage.’ ” 21.In Kenfreight (e.a) Limited v Benson K. Nguti [2016] KECA 409 (KLR), the Court observed;“The Court in CMC case could only interfere with the exercise of the lower court’s discretion where there was proof that the lower court was clearly wrong because of misdirection or for failing to take into account matters that should have been taken into account or for taking into account matters that should not have been taken into account … As is also discernable from the judgment, the decision to award the respondent one month’s salary in lieu of notice was reached after consideration of all the peculiar circumstances of the case. No two cases are alike and eventually each must be decided or must turn on its own set of circumstances and facts.” 22.From our perusal of the record and the impugned judgment, we note that the learned Judge properly considered the circumstances surrounding the alleged redundancy and found that it was substantively unfair for want of genuine reason and due process. The learned Judge also observed that the fact that the 1st respondent paid the severance pay of 21 days for each completed year of service rather than the statutory 15 days, was a mitigating factor and thus he awarded the appellant and his co-claimants the 6 months’ salary compensation. 23.Ultimately, we do not think that the learned Judge misdirected himself or was otherwise plainly wrong so as to entitle us to interfere with his exercise of discretion. 24.In the result, this appeal has no merit and is accordingly dismissed with costs to the respondents. DATED AND DELIVERED AT NAIROBI THIS 15TH DAY OF MAY, 2026.P. O. KIAGE………………………………JUDGE OF APPEALL. ACHODE………………………………JUDGE OF APPEALW. KORIR………………………………JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR