https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1961

REPUBLIC OF KENYA IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT MALINDI ELRC APPEAL NO. E003 OF 2026 MODERN COAST BUILDERS AND CONTRACTORS LIMITED …………………….....APPELLANT VERSUS EDWIN SIMIYU LUTACHO *(Suing as the legal and personal* *representative of the Estate of* RICHARD MACHO LUTACHO) ………………………………………..RESPONDENT *(Being an appeal from the judgment of Hon. M.S. Kimani (Senior Principal Magistrate) delivered on 28th November 2025 at the Chief Magistrate's Court at Mariakani in MCELRC/E008/2021)* **JUDGMENT** **Introduction** 1. This appeal arises from the judgment of the trial court in Mariakani MCELRC/E008/2021, in which the late Richard Macho Lutacho (“the deceased”), and after his death his son and legal representative Edwin Simiyu Lutacho, sued the Appellant, contending that the deceased’s employment was terminated without substantive justification and without procedural fairness. The learned trial Magistrate found for the Claimant and entered judgment substantially in his favour. The Appellant, aggrieved, has appealed against the whole of that decision. **The Respondent’s Case before the lower Court** 2. It was the deceased’s case before the trial court that he was employed by the Appellant as a lorry/truck driver on 17th June 2014 at a monthly salary which he pleaded and testified to be Kshs. 28,513.00. He worked continuously and diligently for approximately six years and three months. 3. He testified that on 8th September 2020 he was summoned to explain unusually high diesel consumption attributed to the truck assigned to him, that he tendered a written explanation attributing the consumption to a persistent mechanical fault which he had repeatedly reported to the workshop manager, one Mr Falz, and that his explanation was, without further inquiry, declared unsatisfactory. 4. He testified further that he was thereupon handed a letter, dated the same day, terminating his employment with immediate effect on the stated ground that he had attained the company’s retirement age of 60 years, notwithstanding that he was, by then, 61 years old and had continued in service beyond that age without objection from the Appellant. He stated that he was never made aware of any retirement policy, was issued with no prior notice of retirement, was not accompanied by a fellow employee or union representative at the meeting, and did not, in truth, ask to be retired but was simply informed of the decision. 5. He asserted that he was not paid his salary for August 2020, was never paid the terminal dues promised in the letter of 8th September 2020, and was issued no notice of termination. On this basis, he sought one month’s salary in lieu of notice, salary for August 2020, leave allowance, gratuity, and compensation for unfair termination, cumulatively totalling Kshs. 657,937.48. 6. The deceased testified and was cross-examined before the trial court’s predecessor, Hon. Stephen K. Ngii (Principal Magistrate, as he then was), on 26th October 2022. He passed away on 19th January 2023, before judgment. Edwin Simiyu Lutacho, his son, obtained a limited grant of letters of administration ad litem on 20th July 2023 and, upon application, was substituted as Claimant by a ruling delivered on 13th February 2025 — a ruling the Appellant resisted at the time and which forms part of the grounds of this appeal. **The Appellant’s Case before the lower Court** 7. The Appellant called a single witness, Gloria Destiny Mlanya, its Human Resource Officer, who was not in its employment in 2020 and had no personal knowledge of the events she narrated. She testified that the deceased was employed on 17th June 2014 as a lorry driver at a gross salary of Kshs. 25,381.00. She stated that around August 2020 the Appellant noted unusually high diesel consumption on the truck driven by the deceased, that he was summoned to explain himself, that he appeared before the Human Resource Department and tendered a written explanation which was found unsatisfactory, and that he was then informed that the Appellant was entitled to terminate his services summarily and to press charges. 8. She testified that the deceased then sought the Appellant’s indulgence on account of his age, requested to be retired, and that this request was granted by way of a retirement letter dated 8th September 2020, effective the same date, following which he cleared with all departments of the Appellant. 9. On cross-examination, RW1 made a number of material concessions. She conceded that she had no personal knowledge of the events of 2020; that she was unaware the diesel-consumption complaint had ever been reported by the deceased to the workshop manager, Mr Falz; that Mr Falz was neither summoned to, nor mentioned in, the minutes of the meeting of 8th September 2020; that no Notice to Show Cause was produced in evidence, though she maintained one had been issued; that the deceased was not accompanied by a fellow employee or shop-floor union representative at the meeting; that no retirement policy document was produced before the court; and — critically — that the summoning of the deceased, the hearing of his explanation, the warning of his entitlement to summary dismissal, the request for retirement, the issuance of the retirement letter, and his clearance from all departments were all, on the documentary record before the court, events of a single day, 8th September 2020. She conceded, finally, that there was no evidence that the deceased’s outstanding dues, promised in the retirement letter, were ever paid. **The Judgment of the lower Court** 10. The learned trial Magistrate, having considered the pleadings, the oral evidence and the submissions of both counsel, framed two issues: whether the deceased’s termination/retirement was substantively and procedurally fair, and what reliefs, if any, were available to the parties. 11. On the first issue, the trial court found that the Appellant had failed to prove diesel overconsumption as a valid reason for termination, noting that the minutes of the meeting of 8th September 2020 made no reference whatsoever to the diesel-consumption complaint, that there was no evidence the deceased’s dissatisfaction with his explanation was ever communicated to him in a manner capable of founding a disciplinary sanction, and that no Notice to Show Cause — the document which, in practice, commences a disciplinary process — was produced. The court further found the process procedurally deficient in that the deceased was given no notice of an intention to terminate his services, was not informed of any right to be accompanied, and was afforded no adequate opportunity to be heard on the question of retirement itself, as distinct from the diesel-consumption complaint. The court held that a retirement on account of age, even where age is a legitimate consideration, must still be preceded by reasonable notice, and that the Appellant’s conduct — summoning the deceased over one matter and, within the same sitting, retiring him on an entirely different basis — was wanting in prudence and contrary to the spirit of the law. The termination was accordingly found to be both substantively and procedurally unfair. 12. On quantum, the trial court, invoking section 10(7) of the Employment Act, held that in the absence of a written contract of service produced by the Appellant, it was entitled to adopt the deceased’s own pleaded and testified figure of Kshs. 28,513.00 as his monthly wage. It awarded one month’s salary in lieu of notice (Kshs. 28,513.00), unpaid remuneration for August 2020 (Kshs. 28,513.00), compensation for unfair termination equivalent to six months’ gross salary under section 49(1)(c) of the Employment Act (Kshs. 171,078.00), and service pay for six completed years of service at half a month’s salary per year (Kshs. 85,539.00), all subject to statutory deductions, together with costs and interest. The claim for leave allowance was dismissed for want of a prima facie basis, and the claim for gratuity was declined for lack of proof of any contractual entitlement to gratuity as distinct from statutory service pay. **The Appeal before this Court** 13. Aggrieved, the Appellant filed the Memorandum of Appeal dated 11th December 2025, advancing fourteen grounds which, in substance, may be grouped as follows: (a) that the trial Magistrate erred in finding that the deceased’s exit was a termination rather than a voluntary retirement, and in disregarding the documentary evidence — the retirement letter, the clearance form and the minutes of the meeting — said to disprove any allegation of termination (grounds 1, 2, 3, 5, 9 and 10); (b) that the trial Magistrate misdirected herself on the burden of proof under section 47(5) of the Employment Act by requiring the Appellant to disprove termination rather than requiring the deceased to establish that termination had occurred (ground 4); (c) that the claim was personal to the deceased and did not survive his death, being extinguished under section 2(1) of the Law Reform Act and barred by the doctrine of privity of contract, such that the substitution of the Respondent as Claimant was erroneously allowed (grounds 7 and 8); (d) that the awards of notice pay, August 2020 remuneration, compensation for unfair termination and service pay were each made without proper evidential or legal basis (grounds 6, 11, 12 and 13); and (e) that the trial Magistrate erred generally in failing to dismiss the suit in its entirety (ground 14). **Analysis and Determination** 14. I have carefully considered the record of appeal, the grounds of appeal, the Appellant’s written submissions, and the authorities relied upon. Four issues arise for determination: first, whether the cause of action survived the death of the deceased and was properly prosecuted by the Respondent as his legal representative; second, whether the deceased’s exit from employment was, in law, a termination requiring substantive and procedural justification, or a voluntary retirement requiring none; third, if the exit was a termination, whether it was substantively and procedurally fair; and fourth, whether the reliefs awarded were properly assessed. **Whether the cause of action survived the death of the deceased** 15. The Appellant contends, in grounds 7 and 8 of the Memorandum of Appeal, that the deceased’s cause of action was personal to him, that it stood extinguished upon his death by operation of section 2(1) of the Law Reform Act, and that it was barred by the doctrine of privity of contract; and further, that the trial Magistrate erred in permitting the Respondent’s substitution as Claimant. 16. Section 2(1) of the Law Reform Act provides — in terms the Appellant itself set out in its own submissions before the trial court — that on the death of any person, all causes of action subsisting against or vested in him shall survive against, or for the benefit of, his estate, save for causes of action in defamation, seduction, inducement of a spouse to leave or remain apart from the other, or damages on the ground of adultery. A claim for unfair termination of employment does not fall within any of the excepted categories. The maxim actio personalis moritur cum persona, upon which the Appellant places such heavy reliance, is precisely the mischief which section 2(1) of the Law Reform Act was enacted to abolish, save to the limited extent preserved by its proviso. 17. The Appellant’s reliance on the doctrine of privity of contract is, with respect, misconceived. Privity of contract prevents a stranger to a contract from suing upon it. The Respondent does not sue as a stranger asserting rights under a contract to which he was not privy; he sues, by operation of the Law Reform Act and the Law of Succession Act, as the legal representative of a party who was privy to the contract and who had, in his own lifetime, instituted and given evidence in the very suit from which this appeal arises. The estate does not acquire a new cause of action; it inherits the deceased’s own subsisting cause of action, which had already accrued and crystallised — indeed, had already been the subject of testimony — well before his death on 19th January 2023. 18. Nor is section 24(2) of the Employment Act, which entitles the legal representatives of a deceased employee to be paid wages and other remuneration due as at the date of death, an answer to this position. That provision addresses a specific and narrower entitlement — payment of dues accrued but unpaid as at the date of death where the contract of service is extant at the time of death — and cannot be read as displacing or narrowing the general survival provision in section 2(1) of the Law Reform Act in respect of a cause of action, such as this one, which had already arisen and was already the subject of pending litigation before the deceased’s death. 19. I find no error in the trial court’s ruling of 13th February 2025 permitting the substitution of the Respondent as Claimant. Grounds 7 and 8 of the appeal accordingly fail. **Whether the deceased’s exit was a termination — mischaracterisation of the meeting of 8th September 2020** 20. The tenor of the Appellant’s pleadings and the evidence of its witness is that the deceased elected to retire after the Appellant considered his response to the accusations levelled against him, found the response unsatisfactory, and informed him that it was entitled to summarily dismiss him. When the Appellant’s material is considered as a whole, it seeks to create the impression that the meeting of 8th September 2020 was a disciplinary hearing. I note, in passing, that even the date of this meeting is not consistently pleaded by the Appellant: its Memorandum of Response, its witness statement, and its written submissions on this appeal variously assert that the deceased was summoned and heard on 8th August 2020, yet every contemporaneous document produced by the Appellant itself — the deceased’s written explanation, the retirement letter, the minutes of the meeting, and the clearance form — bears the date 8th September 2020, and RW1 herself conceded on cross-examination that the summoning, the hearing, the warning, the retirement request and the clearance all occurred on that single date. This internal inconsistency in the Appellant’s own case does little to inspire confidence in the reliability of its narrative. 21. I am unable to agree that the meeting of 8th September 2020 was a disciplinary hearing. Not every meeting between an employer and an employee metamorphoses into a disciplinary hearing. It must be demonstrated that the meeting was convened as such, that the employee was made aware of its disciplinary character, that the allegations were explained to him with sufficient clarity, that he was accorded a reasonable opportunity to answer them, and that the safeguards under section 41 of the Employment Act were observed. The Court of Appeal in **Postal Corporation of Kenya v Andrew K. Tanui [2019] KECA 489 (KLR)** underscored that procedural fairness requires more than a mere invitation to attend a meeting; the employee must know the reason for the meeting and be accorded the statutory right to representation and hearing. 22. Looked at from whatever angle, and upon a critical evaluation of the evidence of the Appellant’s witness, the meeting of 8th September 2020 cannot properly be held to have been a disciplinary hearing capable of yielding a valid decision to summarily dismiss the deceased, or one whose consequence could, at the employer’s election, be commuted to the lesser sanction of retirement on account of age. The minutes of that meeting, produced by the Appellant itself, record only that, due to his old age, his identity card showed his date of birth to indicate he was 61 years — nothing more. They contain no reference whatsoever to diesel overconsumption, no record of any charge put to the deceased, no record of any representations he made in his defence, and no record of any request by him, in his own words, to be retired. Tellingly, the minutes bear no signature from Astrid Boke, the Human Resource Manager said to have chaired the meeting and who alone signed the retirement letter — RW1 herself conceding that this was because Ms Boke attended, if at all, only remotely. **Whether the termination was substantively and procedurally fair** 23. Termination on account of age, particularly where the employer has not proved the existence of a retirement policy or placed before the court the policy from which the relevant terms are discernible, cannot be treated as a neutral or self-executing retirement. In the circumstances of this case, it was a termination requiring proof of both substantive justification and procedural fairness. The Appellant was therefore bound to comply with sections 41, 43, 45 and 47(5) of the Employment Act. 24. I do not accept, in relation to ground 4 of the Memorandum of Appeal, that the trial Magistrate reversed the burden of proof. Under section 47(5) of the Act, an employee must, at the first instance, establish that a termination occurred before the employer is called upon to justify it. That threshold was comfortably met here: it was never in dispute that the deceased’s employment ended on 8th September 2020, at the instance and by the document of the Appellant, in the same sitting at which he had been warned of the Appellant’s entitlement to dismiss him summarily. Once that threshold was crossed, the burden properly shifted to the Appellant, under sections 43 and 45, to prove the reason for the cessation of employment and to demonstrate that the reason was valid, fair, and arrived at through a fair procedure. That is precisely the analysis the trial Magistrate undertook, and it discloses no misdirection. Grounds 1, 2, 3, 4, 5, 9 and 10 accordingly fail. 25. In **Pius Machafu Isindu v Lavington Security Guards Limited, Civil Appeal No. 301 of 2015 [2017] eKLR**, the Court of Appeal emphasised that although the employee bears the burden of proving that an unfair termination occurred, the employer bears the burden of justifying the grounds for the termination under section 47(5) of the Act. The Appellant did not discharge that burden. No retirement policy was proved. No valid retirement age was demonstrated as a matter of contract, policy or law binding on the deceased. No fair disciplinary process was shown. The reason for termination was therefore neither valid nor fair. 26. This reasoning is fortified by the decision in **Ouko v Kenya Chemical Workers Union (Cause E014 of 2022) [2023] KEELRC 1877 (KLR)**, where Baari J held that in the absence of a policy on retirement age, and where an employee is made aware of his retirement only shortly before it is to take effect, the retirement amounts to an ambush and constitutes unfair termination. That reasoning applies with equal, if not greater, force here: the deceased was, on the Appellant’s own account, informed of his “retirement” in the same meeting in which the decision was made and the letter issued — no notice of any kind preceded it. Absent proof of the contractual, policy or legal foundation for the retirement age relied upon, the alleged retirement of the deceased cannot be accepted as a valid and fair reason for the termination of his employment. 27. Lastly, on this limb, the termination letter and the minutes produced by the Appellant do not show that high fuel consumption was ever framed, presented, or considered as a punishable infraction against the deceased. A party cannot justify termination on a ground that was not put to the employee and was not part of the disciplinary consideration; a court, no less than the parties themselves, is bound by the case pleaded and proved. The Appellant cannot, on the one hand, disown any specific charge of misconduct as the operative ground for the cessation of the deceased’s employment, and on the other, invite this Court to sustain that cessation by reference to a disciplinary infraction that its own minutes do not record as having been considered. **Quantum** 28. I have also considered the learned trial Magistrate’s treatment of the deceased’s monthly salary, the subject of ground 6 of the appeal. Two figures were canvassed before the trial court: Kshs. 28,513.00, pleaded and testified to by the deceased, and Kshs. 25,381.00, asserted by the Appellant’s witness. Under section 10(7) of the Employment Act, where an employer fails to produce a written contract of service or the particulars of employment prescribed under section 10(1), the burden of proving the terms of employment, including remuneration, rests with the employer. The Appellant, notwithstanding that it was best placed to produce a written contract or payroll records, produced neither. In these circumstances, I find no error in the learned trial Magistrate’s adoption of the deceased’s pleaded and testified figure of Kshs. 28,513.00 as the applicable monthly wage for purposes of computation. 29. The reliefs awarded were equally proper. Having found, as I have independently found, that the termination was substantively and procedurally unfair, the trial court was entitled to grant the remedies it did, each of which was anchored in the pleadings, the evidence and the Employment Act: one month’s salary in lieu of notice under sections 35 and 36; unpaid remuneration for August 2020, proof of payment of which lay with the Appellant and was not discharged; compensation for unfair termination under section 49(1)(c), assessed at six months’ gross salary having regard to the deceased’s age and the corresponding difficulty he would have faced in securing alternative employment; and service pay under section 35(5) for each completed year of service, there being no evidence that the deceased was a member of a registered pension or provident fund scheme within the meaning of section 35(6). The trial Magistrate correctly declined to award gratuity in addition to service pay, recognising that the deceased’s claim, though pleaded in part as gratuity, was in substance a claim for the statutory entitlement under section 35, and correctly dismissed the claim for leave allowance for want of a prima facie evidential basis. I find no misdirection in principle, no error in computation, and no basis upon which this Court, sitting as a first appellate court, should interfere with the reliefs granted. Grounds 6, 11, 12 and 13 of the appeal accordingly fail. 30. It follows that ground 14 of the appeal, which is entirely dependent on the Appellant succeeding on the grounds addressed above, must equally fail. **Disposition** 31. In the upshot, and for the reasons set out above, I find that this appeal is without merit in its entirety. The judgment and decree of the trial court in MCELRC/E008/2021, delivered on 28th November 2025, are hereby affirmed. 32. Consequently, the appeal is dismissed with costs to the Respondent. Read, Signed and Delivered this 7th Day of July 2026. OCHARO KEBIRA JUDGE.