https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1902

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT NAIROBI ELRC CAUSE NO. E841 OF 2023 (Before Hon. Lady Justice Anna Ngibuini Mwaure) FELIX JAMES NJAGI MUHINDI ……............... ….....CLAIMANT VERSUS KHUSH TIMBER HARDWARE LIMITED…...........RESPONDENT JUDGMENT Introduction 1. The Claimant commenced this suit vide Statement of Claim dated 18th July 2023 seeking the following orders that: a.A sum of Kshs.821,898/= in legal terminal benefits b.General damages for redundancy and loss of employment c. Costs of the suit d.Any other or better relief the Honourable Court may deem fit to grant. Claimant’s case 2. The Claimant avers that he was duly licensed as a professional driver of heavy commercial vehicles and was employed by the Respondent on 9th October 2013. NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 1 | P A G E 3. The Claimant further avers that he served continuously in the capacity of driver until 9th February 2023 when the Respondent unilaterally terminated his employment on account of alleged redundancy. 4. The Claimant contends that the said termination was unlawful and that he is entitled to terminal dues and benefits arising from his employment. In particular, he claims: i. Underpayment of salary for the period worked amounting to Kshs.64,539.60/=; ii. One month’s salary in lieu of notice amounting to Kshs. 34,302/=; iii. Unpaid salary amounting to Kshs.10,290/=; iv. House allowance arrears amounting to Kshs.267,023/=; and v. Compensation for loss of employment amounting to Kshs. 411,636.60/=. Respondent’s reply to memorandum of claim The Respondent opposed the memorandum of 5. claim vide a reply to memorandum of claim dated 5th March 2024. 6. The Respondent categorically denies the Claimant’s alleged date of employment, the assertion of redundancy, and any entitlement to terminal dues, NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 2 | P A G E maintaining instead that the dismissal was lawful and procedurally grounded under the Employment Act, arising from misappropriation of company funds. 7. The Respondent further repudiates the claims for special damages, including notice pay, unpaid salary, underpayment, house allowance, and compensation, placing the Claimant to strict proof. 8. With emphasis, the Respondent urges the Court to dismiss the claim in its entirety with costs, underscoring the baselessness of the allegations. Claimant’s evidence in court 9. CW1, the Claimant, adopted his written statement dated 18th July 2023 as his evidence-in-chief. 10. In cross-examination, CW1 testified that he was employed as a driver, primarily undertaking long- distance assignments. He stated that he was responsible for the care of the vehicle assigned to him and worked without the assistance of a turn boy. His routes included Nairobi, Mombasa, Busia, Malindi, Uganda, and even Congo. He confirmed that he earned a salary of Kshs.30,000/= together with mileage allowance. Initially, mileage payments were made before departure from the office, but later they were remitted in instalments via M-PESA. He further stated that statutory deductions such as NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 3 | P A G E PAYE were remitted at the beginning of his employment, while NSSF and NHIF contributions were only effected towards the end, and even then, not consistently. 11. CW1 explained that he was supplied with diesel for the entire trip, but whenever he consumed more than allocated, particularly on trips to Congo, he was surcharged. He recounted that in 2023, he was asked to surrender the vehicle keys to the mechanics, which he did. He denied any allegation of overusing diesel, insisting that he left the keys to allow another driver to continue with the trip. He emphasized that he was never issued with any letter regarding the matter. 12. In re-examination, CW1 reiterated that he was never served with a termination letter. He clarified that the mileage allowance was meant to cater for expenses incurred during the journey. He further stated that he was paid per trip and that the Respondent did not consistently remit PAYE, NSSF, or NHIF, except sporadically towards the end of his employment. 13. CW1 added that in 2023, after leaving Malindi, he took the vehicle for servicing and was instructed by the employer, through the mechanic, to surrender NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 4 | P A G E the keys, which he complied with. He was not issued with any termination notice or letter to date. He maintained that he was never subjected to any disciplinary process regarding diesel usage. He noted that fellow employees often insinuated that he sold company diesel, an allegation he firmly denied, stressing that he only used diesel strictly for work-related purposes. Respondent’s evidence in court 14.RW1, Hiran Panchani, the Respondent’s Director, adopted his witness statement dated 1st October 2023 together with the bundle of documents dated 26th September 2024 marked as exhibits nos. 1 to 8 as his evidence in chief. 15. RW1 testified that he used to pay statutory obligations for CW1. As for mileage it was to cater for travel allowance. Expenses in the trip, like hotel, parking fees and repairs of puncture. He stated that CW1 first left employment when he tried to give the vehicle to another driver to see if the vehicle would perform better. 16.In cross-examination, RW1 stated that he did day- to-day duties of the company and he was NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 5 | P A G E representing the company, and he worked in the company as a Director and also he managed the company. He stated that there is a manager called Jendi, but he was the same one CW1 was working for. He stated that he is not a witness to this case. He stated that the company had an accountant but did not record a statement. He stated that the company has a Human Resources department and did not have witness statements. 17. RW1 stated that CW1’s date of employment is not clear to him, but it could be 6th October 2015, so about 11 years. He stated that he had a letter of engagement and was earning Kshs.30,000/=. He earned Kshs.30,000/= for 12 years. He stated that he knew of annual increments for employees per year according to wages guidelines. The mileage allowance included parking fees, accommodation and food. Sometimes CW1 would sleep in the vehicle. Nairobi to Busia was Kshs. 2,750/= and was enough for the expenses. The salary vouchers were prepared by the manager and were not signed by CW1. MPESA statements are attached as evidence, but sometimes cash would be paid. He stated that CW1 was put through disciplinary proceedings but no details were availed and also Claimant was never NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 6 | P A G E charged for stealing. He stated that CW1 was not paid his benefits as he left employment but was not terminated. He stated that CW1 was issued a termination letter dated 9th March 2023 after he was told to hold on, and he left. RW1 stated that the letter was given to CW1, which he never accepted. 18. In re-examination, RW1 stated that the M-PESA statements produced in evidence reflected payments made to CW1, which comprised both salary and mileage allowance. He emphasized that mileage allowance was expressly provided for in the contract and was calculated on a one-way basis, dependent on the trips undertaken. RW1 further testified that the termination of CW1’s employment was occasioned after it was confirmed that he had been consuming more fuel than was allocated or authorized. 19. Parties filed their respective written submissions. Claimant’s submissions 20. The Claimant submitted that his dismissal was unlawful, unprocedural, and discriminatory, emphasizing that he was never subjected to any disciplinary process or accused of misconduct such as fuel siphoning. He argued that the respondent’s claim of excessive fuel use lacked proof and that the NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 7 | P A G E termination was a unilateral and ill-informed decision. He further disputes the respondent’s assertion of having paid all dues, citing absence of credible records or testimony from the Accounts and Human Resources departments. 21.The Claimant submitted that he is entitled to Kshs.34,302/= in lieu of notice, Kshs.10,290/= for nine unpaid days, Kshs.64,539/= for underpayment, and Kshs.267,023/= as house allowance, contending that mileage allowance covered travel expenses, not housing. He also claims Ksh.411,636/= as compensation for unfair and discriminatory termination, admitting a Ksh.50,000/= loan owed to the respondent. 22. The Claimant relied on the following cases including Geraphas Nyakundi Nyangau v Career Directions Limited [2016] KEELRC 1264 (KLR), Karanja & 5 Others v Kenya Airport Parking Services Limited & Another [2025] KEELRC 3580 (KLR), Mary Wangechi Maina v Board of Governors Moi Nyeri Complex Primary School [2015] KEELRC 715 (KLR), Hellen Minoo Munguti v Italbuild Imports Ltd [2018] KEELRC 657 (KLR), and Unga Company NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 8 | P A G E Limited & another v Isabwa [2026] KEELRC 391 (KLR), all affirming awards for unfair termination, underpayment, notice pay, and house allowance. 23. The Claimant urged the court to allow his claim and award him costs of the suit with interest. Respondent’s submissions 24. The Respondent submitted that the Claimant was employed as a truck driver since 2015 and assigned motor vehicle registration number KCZ 204P. Their submission is that Claimant was lawfully terminated for syphoning fuel from the said lorry. The Respondent argued that the Claimant, assigned motor vehicle registration number KCZ 204P, was dismissed for syphoning fuel, a breach of trust confirmed through investigations and prior sanctions, and that the termination was effected by a letter dated 9th March 2023. 25.The Respondent submitted that the Claimant is not entitled to notice pay, underpayment, house allowance, or damages, since his net salary of Kshs.30,000/= plus mileage allowance exceeded statutory minimums and catered for housing needs, with statutory deductions duly remitted. NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 9 | P A G E 26.The Respondent concedes only to pro-rata salary for seven days worked in March 2023, while counter-asserting that the Claimant owes Kshs.24,757/= for stolen fuel, and thus prays that the Court dismisses the claim with costs. Analysis and determination 27. The court has considered the pleadings and submissions for the record; the issues for determination are as follows: i. Whether the Claimant was unfairly and unlawfully terminated. ii. If (i) above is in the affirmative, whether the Claimant is entitled to costs. iii. Who should bear the costs of the suit. 28.For employment termination to be fair, it has to meet the twin threshold of substantive justification and procedural fairness as set out in sections 41, 43 and 45(2) of the Employment Act. In Thomas De La Rue (K) Ltd V David Opondo Omutelema [2013] KECA 492 (KLR), the Court of Appeal held that, for termination to be fair, there must be substantive justification and procedural fairness. NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 10 | P A G E 29.In Walter Ogal Anuro V Teachers Service Commission [2013] KEELRC 386 (KLR) the court stated 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. In Oyombe v Eco Bank Ltd [2022] KECA 540 (KLR) the Court of Appeal stated as follows: “What concerns us now is whether there was procedural fairness in the dismissal process. As pointed out earlier, it is evident that the learned Judge did not consider the aspect of procedural fairness. In determining this issue, we must be guided by Section 41 of the Employment Act, which provides the minimum threshold of a fair procedure that an employer ought to comply with in summarily dismissing an employee. The said section provides for notification and hearing before termination on grounds of misconduct in the following way:- “Subject to Section 42 (1), an employer shall, before terminating the employment of an employee, on NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 11 | P A G E the grounds of misconduct; poor performance or physical in capacity, explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.” “Notwithstanding any other provision of this part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under Section 44 (3) or (4) hear and consider any representations which the employee may, on the grounds of misconduct or poor performance, and the person, chosen by the employee within subsection (1) make.” Under this Section, four elements must thus be satisfied for the summary dismissal procedure to be said to be fair, being: - a) An explanation of the grounds of termination in a language understood by the employee; NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 12 | P A G E b) The reason for which the employer is considering termination; c) Entitlement of an employee to have a representative of his choice when the explanation of the grounds of termination is being made; d) Hearing and considering any representation made by the employee and the representative chosen by the employee.” 31. In this instant case, the Claimant was employed by the Respondent as a truck driver on 6th October 2015 and was later terminated on allegations of siphoning diesel fuel and misusing fuel consumption from motor vehicle registration number KCZ 204P. The Claimant maintains that the dismissal was premised on these unproven accusations while the Respondent contends that the termination was justified on grounds of fuel siphoning and misuse. 32.The Claimant was unlawfully and unfairly terminated, in contravention of sections 41, 43, and 45(2) of the Employment Act. The Respondent failed to prove the allegations of siphoning fuel and NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 13 | P A G E misuse of fuel consumption and did not adhere to the mandatory procedural safeguards. Specifically, the Respondent ought to have issued a notice to show cause, afforded the Claimant an opportunity to respond, and thereafter conduct a disciplinary hearing to allow him to present his case before making a determination. By neglecting these statutory requirements, the Respondent failed to justify the termination as mandated under section 47(5) of the Employment Act and in various case laws among them OYOMBE -VS- ECO BANK LTD (2022) KECA and CMC AVIATION LIMITED -VS- MOHAMED NOOR 2015 eKLR where courts have emphasized that employers bear burden to prove the reasons for termination and procedural fairness. The present case the employer fell a foul of proving the same and hence court finds the Claimant was unfairly terminated. Judgment is entered in his favour. 33. For the relief sought, the court will award as follows: i. For underpayment for salary, the court relies on section 89 of the Employment Act on limitation of time; hence, will not award the relief as was already time barred. NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 14 | P A G E ii. One month’s salary in lieu of notice amounting to Kshs.34,302/= is awarded. iii. Unpaid salary for the period worked and not paid amounting to Kshs.10,290/= is awarded. iv. House allowance arrears amounting to Kshs. 267,023/= will be declined as it is time-barred in accordance with section 89 of the Employment Act. v.Compensation for unfair termination, the court will award for 7 months equivalent of his salary amounting to Kshs.240,114/=. 34. The Claimant shall have costs of the suit. 35. He is also awarded interest at 14% per annum from date of judgment till full payment. Total award is Kshs.284,706/=. Orders accordingly. Dated, Signed and Delivered virtually at Nakuru this 3rd 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 NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 15 | P A G E of the directions issued by His Lordship, the Chief 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 NAIROBI CAUSE NO. E841 OF 2023 JUDGMENT 16 | P A G E