Mutua v Origen Fresh EPZ Limited (Employment and Labour Relations Cause E011 of 2023) [2026] KEELRC 2065 (KLR) (17 July 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT & LABOUR RELATIONS COURT** **AT MACHAKOS** **ELRC CAUSE NO. E011 OF 2023** ***(Before Hon. Lady Justice Hellen Wasilwa, J)*** **JUSTUS MUTUA…………………………………..……………......CLAIMANT** **VS** **ORIGEN FRESH EPZ LIMITED………………………...…....RESPONDENT** **JUDGMENT** 1. The Claimant instituted this claim vide a Statement of Claim dated 22nd August 2023 and prays for judgment against the Respondent for orders that: - 2. *A declaration that the Claimant's dismissal was unprocedural, wrongful, unlawful and unfair.* 3. *General damages for wrongful dismissal to the tune of Kshs. 3,480,000/=* 4. *One month’s salary in lieu of notice Kshs.290,000/=* 5. *Salary for the 32 months remainder duration of the contract Kshs. 9,280,000/=* 6. *Certificate of service* 7. *Costs of this claim* 8. *Interest on (b), (c), (d) and (f) on the above* 9. *Any other or further relief that this Honourable Court may deem just and fit to grant.* **Claimant’s Case** 1. The Claimants avers that he was employed by the Respondent as a Finance Manager vide a letter dated 8th December 2021, which employment commenced on 3rd January 2022. 2. He states that his consolidated gross salary was Kshs. 270,000 per month together with a fuel allowance of Kshs. 10,000 and telephone allowance of Kshs. 10,000, making a total monthly remuneration of Kshs. 290,000. 3. The Claimant avers that he served the Respondent diligently, with dedication and utmost professionalism until 25th April 2022 when the Respondent, without any justifiable cause, unlawfully and unfairly terminated his employment. 4. The Claimant contends that the termination was unlawful and unfair in that the Respondent alleged that his performance was poor without any basis or foundation, terminated his employment without affording him a hearing and without following due process, and relied on unsubstantiated allegations. 5. He further asserts that the allegation of poor performance was merely a pretext as the Respondent intended to do away with him on account of what it considered to be his high salary. 6. He states that on 13th May 2022, the Respondent prepared a fresh employment contract reducing his salary to Kshs. 150,000 and called upon him to sign the same, which he declined to do on account that the salary was too low considering the job description. 7. The Claimant further avers that he had been employed on a fixed-term contract for a period of three years, renewable upon satisfactory performance, and that at the time of the termination, the contract had a balance of thirty-two (32) months to run. 8. It is the Claimant’s case that the termination was unfair, unlawful and wrongful within the meaning of Section 45 of the Employment Act, 2007 and International Labour Organisation Convention No. 158 of 1982, particularly because the procedure adopted by the Respondent was unfair. 9. He further avers that the purported termination notice issued to him was irregular, unlawful and defective for all intents and purposes. 10. The Claimant avers that there is no other suit pending between the parties and that there have been no previous proceedings in respect of the subject matter. 11. He further states that despite demand and notice of intention to sue, the Respondent has refused, ignored and/or neglected to settle his claim, thereby necessitating the filing of the present suit. He avers that this Court has jurisdiction to hear and determine the claim. **Respondent’s Case** 1. In opposition to the claim, the Respondent filed a Statement of Response dated 22nd May 2024. 2. The Respondent avers that the Claimant was employed as a Finance Manager with effect from 3rd January 2023 and, by virtue of his position, he was the Head of the Finance and Accounts Department. 3. The Respondent states that the Claimant’s contract provided for a probationary period of six (6) months under Clause 13, during which his performance was to be reviewed and feedback given accordingly, and that confirmation of employment was dependent upon satisfactory performance during the probation period. 4. The Respondent avers that during the probation period, the Claimant’s performance was consistently found to be unsatisfactory. Owing to the Claimant’s unsatisfactory performance, it decided to terminate his employment during probation and informed him of the same in writing. 5. The Respondent further states that upon clearance, the Claimant was paid his terminal dues. 6. The Respondent denies the Claimant’s assertion that he served with utmost professionalism, diligence and dedication and contends that his performance was dismal considering the senior position he occupied. 7. The Respondent states that the Claimant’s basic salary and house allowance amounted to Kshs. 270,000 and that the sum of Kshs. 20,000 paid towards telephone and fuel constituted facilitative allowances and not remunerative payments. 8. The Respondent avers that notice pay is not applicable as the Claimant was issued with seven (7) days’ notice in accordance with the law and the terms of his contract. 9. On the issue of procedural fairness, the Respondent asserts that it afforded the Claimant sufficient opportunity to improve his performance through performance meetings, which in the circumstances amounted to a sufficient opportunity to be heard. It therefore contends that it did not violate the tenets of a fair hearing. 10. It is the Respondent’s case that the termination of the Claimant’s employment was both procedurally and substantively fair and was neither unfair, wrongful nor unlawful. 11. The Respondent further contends that the Claimant is not entitled to any of the remedies sought and, in particular, that the claim for salary for the unexpired term of the contract is unmerited as it is neither provided for in the contract nor in law. 12. The Respondent states that it did not receive any demand and notice of intention to sue and, in any event, there was no liability to admit in the circumstances. It however admits the jurisdiction of this Court to hear and determine the suit. **Evidence in Court** 1. Vide a court order dated 28th November 205, the Court was inclined to agree with parties request that the matter proceeds by way of documentary evidence as per Rule 59 of the ELRC Procedure Rules. **Claimant’s Submissions** 1. The Claimant submitted on three issues: whether the termination of the Claimant’s employment was procedurally unfair; whether the termination was substantively unfair; and whether the Claimant is entitled to the reliefs sought. 2. On procedural fairness, the Claimant submitted that Section 41 of the Employment Act, 2007 required the Respondent to explain the reasons for the contemplated termination, accord him an opportunity to respond and permit him to be accompanied by a fellow employee or union representative where applicable. He argued that the Respondent failed to comply with these statutory requirements as he was neither issued with a notice to show cause nor invited to a disciplinary hearing and no disciplinary proceedings were conducted. 3. The Claimant submitted that the termination letter made several allegations against him without any evidence being provided and that the Respondent terminated his employment on allegations of poor performance without affording him an opportunity to defend himself. 4. He further submitted that the Respondent failed to comply with Clause 14 of the employment contract on performance management which required that he be issued with two warning letters before termination, which was never done. 5. It is the Claimant's submission that failure to comply with Section 41 of the Employment Act rendered the termination procedurally unfair. He relied on the case of [***Walter Ogal Anuro V Teachers Service Commission [2013] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/386/eng%402013-05-02) where the Court held that: *“For termination to pass the fairness test, it must be shown that there were not only substantive justification but also procedural fairness.”* 6. The Claimant submitted that although he had only served for four months and was still on probation, he was nevertheless entitled to a fair hearing process. 7. In support, he cited [***Monica Munira Kibuchi & 6 others v Mount Kenya University; Attorney General (Interested Party) [2021] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2310/eng%402021-07-30), and submitted that the Court in this decision declared Section 42(1) of the Employment Act unconstitutional and null and void to the extent that it excluded employees serving under probationary contracts from the fair hearing process. 8. On substantive fairness, the Claimant submitted that under Section 43 of the Employment Act, the employer bears the burden of proving the reasons for termination. He maintains that despite alleging poor performance, the Respondent did not produce any performance appraisal, warning letters, performance improvement plan or any evidence of poor performance and therefore the allegation of poor performance remained unsubstantiated. 9. The Claimant further submitted that the purported warning letter dated 21st April 2022 could not aid the Respondent's case as there was no evidence that it had been received by him and there was no acknowledgement of receipt. 10. The Claimant submitted that whereas the termination letter dated 25th April 2022 referred to several verbal cautions, it did not make reference to the alleged warning letter authored four days earlier, which, according to him, demonstrated that the warning letter had been manufactured to aid the Respondent's case. 11. The Claimant also challenged the minutes of the meeting allegedly held on 31st March 2022, contending that the same were unsigned and had not been signed by him. He submitted that the Respondent failed to tender evidence of performance management in line with Clause 14 of the letter of employment which required his performance to be reviewed on a weekly and monthly basis by the Chief Executive Officer. 12. The Claimant further submitted that the reasons advanced for his termination were not genuine. He argued that immediately after dismissing him, the Respondent prepared a fresh contract on 13th May 2022 reducing his salary from Kshs. 290,000 to Kshs. 150,000 and requested him to sign it. He referred to the email correspondence exchanged between him and the Respondent's Chief Executive Officer on 16th May 2022 wherein he declined the offer and the Chief Executive Officer responded by stating: *“Okay. You have been way too kind.”* 13. The Claimant submitted that the Respondent did not terminate him on account of poor performance but intended to remove him due to his salary level and that such conduct amounted to bad faith and an unfair labour practice contrary to the provisions of the Employment Act and Article 41 of the Constitution on fair labour practices. He argued that if indeed he had been dismissed due to poor performance, there would have been no reason for the Respondent to seek to re-hire him. 14. The Claimant submitted that under Section 45 of the Employment Act, termination is unfair where the employer fails to prove valid and fair reasons for termination and where the termination is not carried out in accordance with fair procedure. It is the Claimant’s submission that the Respondent failed on both counts. 15. On the reliefs sought, the Claimant submitted that he had been employed on a fixed-term contract of three years and that at the time of termination there remained thirty-two months of the contract. He argued that courts have recognised that unlawful termination of fixed-term contracts entitles an employee to damages equivalent to the salary for the unexpired term of the contract and he was therefore entitled to salary for the remaining thirty-two months. 16. The Claimant further submitted that under Section 35 of the Employment Act, he was entitled to one month's salary in lieu of notice since he had been dismissed without proper notice. 17. It is the Claimant’s submission that the documents on record demonstrate that the Respondent's intention was to replace him with a lower-paid employee and consequently, he is entitled to general damages for wrongful dismissal. **Respondent’s Submissions** 1. The Respondent submitted that the termination of the Claimant’s employment was substantively justified. It argued that the Claimant was not employed in a junior position but served as the Finance Manager and, by virtue of that office, he was entrusted with financial entries, payments, supplier payments and the overall integrity of the Respondent’s finance function. It submitted that the position was a senior and sensitive one requiring accuracy, judgment and reliability, particularly because the Respondent was a young business still establishing its systems. 2. The Respondent submitted that the evidence demonstrated that the Claimant failed to meet the required standard. It relied on the evidence of its Chief Executive Officer, Ms. Grace Kariuki, who stated that the Claimant made serious errors, including making payment entries for wrong amounts and effecting payments to wrong suppliers. It cited an instance where the Claimant made an entry of Kshs. 2,000,000 instead of Kshs. 200,000 and argued that what initially appeared to be ordinary clerical errors were later exposed as widespread failures in financial control, exposing the Respondent to a risk of losses estimated at Kshs. 10 million. 3. The Respondent submitted that it was not required to wait until actual loss crystallised before taking action and that an employer is entitled to act where an employee entrusted with a finance function demonstrates a pattern of errors capable of exposing the business to loss. 4. It is the Respondent’s submission that under Sections 43 and 45 of the Employment Act, the issue is whether the employer had a genuine and reasonable basis for terminating the employee’s services and whether it had a reasonable basis for concluding that the employee’s performance was unsatisfactory. In the instant suit, the evidence on record met this threshold. 5. The Respondent further submitted that the Claimant had not provided any credible response to the performance concerns raised against him. The Respondent maintained that the Claimant failed to demonstrate that the errors did not occur, that they were minor or that they were isolated incidents. Instead, he had shifted the dispute to allegations that the Respondent wished to reduce his salary or replace him with a lower-paid employee. 6. The Respondent denied the allegation that it intended to reduce the Claimant’s salary while retaining him in the same role. It submitted that the job description relied upon by the Claimant related to a junior role and not a position equivalent to that of Finance Manager. It argued that the comparison drawn by the Claimant was false because the roles were not equivalent in terms of level, responsibility or expectation, and that similarity in job descriptions does not necessarily mean that the positions are the same. 7. It is the Respondent’s submission that the reason for termination was valid and fair and directly related to the Claimant’s capacity and performance as detected during the probationary period and that the termination was substantively justified. 8. On procedural fairness, the Respondent submitted that it was alive to the legal position that even an employee serving on probation is entitled to a fair hearing process and cannot be terminated arbitrarily. However, it argued that fairness was observed in the instant case and that the Claimant was made aware of the concerns regarding his performance before the termination was effected. 9. The Respondent submitted that the Claimant was severally engaged on his performance, informed of the errors he was making and advised on the need to improve. It contended that these engagements were not invented after the event as meetings were held, minutes prepared and the minutes were consistent with the email correspondence and dates appearing in the contemporaneous communication. 10. The Respondent submitted that the documentary chronology supported its position that the performance concerns were being addressed at the material time and that the minutes should not be dismissed as an afterthought since they formed part of a contemporaneous chain of communication. 11. The Respondent further submitted that the Claimant could not impeach the evidential value of the minutes merely because they were not signed by him. It argued that there is no provision under the Employment Act or under the general principles of evidence requiring minutes of internal meetings to be signed by an employee in order to carry probative value. 12. It is the Respondent’s submission that minutes are records of proceedings prepared by an employer as part of its internal management processes and that their weight should be assessed in light of the surrounding evidence. 13. It was further submitted that the minutes were not standalone documents as they were corroborated by contemporaneous email correspondence and reflected issues independently documented within the Respondent's records. The Respondent maintained that the absence of the Claimant’s signature did not negate their authenticity or evidential value, particularly where the Claimant had not demonstrated that their contents were false or fabricated. 14. The Respondent acknowledged that the process may not have been as formal as a full disciplinary process but submitted that procedural fairness is assessed in substance and not by ritual. It argued that the Claimant, being a senior finance employee, knew the concerns raised against him, had been engaged on the issues and was afforded an opportunity to improve. Consequently, he was not taken by surprise and was not terminated for reasons unknown to him and the threshold of procedural fairness was therefore met. 15. On the reliefs sought, the Respondent submitted that the Claimant had not properly pleaded statutory compensation under Section 49 of the Employment Act and had instead sought general damages. It argued that the prayer for general damages was legally unsustainable as employment claims arising from termination are governed by the Employment Act and the remedies available are those provided under Section 49 and not general damages in the ordinary common law sense. 16. Reliance was placed on [***George Onyango Akuti v G4S Security Services Kenya Ltd [2013] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/727/eng%402013-08-30) where the Court held: *“General damages are not awardable for wrongful termination… What the Employment Act has provided for is an award equivalent to a number of months wages not exceeding twelve months based on the gross monthly wages.”* 17. The Respondent submitted that since the Claimant was represented by counsel and deliberately pleaded for general damages, the Court could not convert the prayer into compensation under Section 49 of the Employment Act. General damages and statutory compensation are distinct remedies with different conceptual foundations and to convert one into the other would prejudice the Respondent and offend the principle that parties are bound by their pleadings. 18. The Respondent further submitted that compensation under Section 49 is discretionary and subject to the factors set out under Section 49(4) of the Employment Act, including the length of service, the circumstances leading to termination, the employee’s conduct, contribution to the termination and payments already made. 19. The Respondent also submitted that any computation based on a salary of Kshs. 290,000 would be erroneous because the Claimant’s remunerative salary was Kshs. 270,000 and the additional Kshs. 20,000 constituted facilitative allowances for fuel and telephone and were not part of his salary. In support of this position, the Respondent relied on [***Stella Muhoro v Bamburi Cement Limited [2017] eKLR***](https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/723/eng%402017-09-22) where the Court held: *“Facilitative payments made to an employee in the course of duty… are not the same as remuneration for labour.”* 20. The Respondent submitted that such allowances should not be used to inflate notice pay, compensation or any terminal dues and that any computation, if at all, ought to be based on the remunerative component of the salary only. 21. Without prejudice to its position that compensation had not been pleaded, the Respondent submitted that this was not a case deserving of substantial compensation. It argued that the Claimant served for less than four months, was on probation, the termination arose from performance concerns in a sensitive finance role, and that he was engaged on his shortcomings, given notice and paid his dues upon clearance. It submitted that these factors would substantially reduce any award even if compensation had been properly pleaded. 22. Regarding notice pay, the Respondent submitted that the claim for one month’s salary in lieu of notice lacked legal and evidential basis as the Claimant had been issued with seven days’ notice in accordance with the probation clause and the law and had been paid his dues upon clearance. 23. On the claim for salary for the alleged unexpired term of the contract, the Respondent submitted that the same was unsupported by either the contract or the law. It argued that the Claimant was not an office holder under the Constitution and that courts have consistently rejected such claims where they are not founded on an express contractual provision. 24. It is the Respondent’s submission that the Claimant had failed to prove unfair termination and that the evidence demonstrated that it had valid and fair reasons for termination based on unsatisfactory performance in a senior finance role and that the Claimant had been engaged on his shortcomings and accorded a fair hearing. It consequently prayed for the dismissal of the Claim in its entirety with costs. 25. I have examined all the evidence and submissions of the parties herein. The claimant’s employment relationship with the respondent is not denied. The claimant served the respondents from 8th December 2021 to 25th April 2022 a period of barely 4 months. 26. The claimant was employed on an employment contract of 8/12/21 and was placed on a 6 months’ probation period. His consolidated gross salary was kshs 270,000/- per month. Under the contract, the probation period could be terminated by giving a 7 days’ notice in lieu of pay. 27. The respondents have alluded to the fact that the claimant’s performance was dismal prompting them to terminate his employment during the probation period. They aver that they gave the claimant the applicable 7 days’ notice as provided for in the contract. 28. As submitted before this court when the claimant’s performance was poor, there was still need to subject him to a fair disciplinary process as provided for under section 41 of the Employment Act 2007. 29. This court in **Monicah Munira Kibuchi & 6 Others** (supra) found section 42 of the Employment Act 2007 unconstitutional in as far as it excluded employees serving under probationary period from a hearing process. 30. The claimant was indeed served with a warning letter dated 21/4/22 and then terminated on 25/4/22 after apparently going through a disciplinary hearing of 31/3/22. The timings of the minutes, the warning letter following soon after and the termination all point to a process that is not consistent with a disciplinary hearing which should ordinarily start with a warning before a disciplinary hearing. In the case of the claimant, the disciplinary hearing seems to have come earlier than the warning. 31. In light of the unfair disciplinary process and in view of section 45(2) of the employment act 2007 which states as follows: **(2) A termination of employment by an** **employer is unfair if the employer fails to prove―** 1. **that the reason for the termination** **is valid;** 1. **that the reason for the termination is a fair reason―** 2. **related to the employees conduct, capacity or compatibility; or** 3. **based on the operational requirements of the employer; and** **(c) that the employment was terminated in accordance with fair procedure** I find the termination of the claimant unfair and unjustified and I declare it so. In terms of remedies, I find for the claimant and award him: 1. 1 months’ salary in lieu of notice = kshs 270,000/-. 2. In view of the short period of service with the respondents and given the unfair termination, I award him 5 months salary as compensation for the unfair termination= 5x270,000= Kshs 1,350,000 **TOTAL = Kshs 1,620,000/-** less statutory deductions. 1. The claimant be issued with a certificate of service. 2. The respondents will pay costs of this suit plus interest at court rates with effect from the date of this judgement. **Dated, Signed and Delivered virtually at Nairobi this 17th Day of July 2026.** **HELLEN WASILWA** **JUDGE**