https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1390

Mwaura v ASP Company Limited (Cause 438 of 2009) [2026] KEELRC 1390 (KLR) (21 May 2026) (Judgment) Neutral citation: [2026] KEELRC 1390 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Cause 438 of 2009 ON Makau, J May 21, 2026 Between John Njuguna Mwaura Claimant and ASP Company Limited Respondent Judgment 1.This suit was filed in the defunct industrial court on 12/8/2009 and the file was allocated to me on 26th January 2026. The suit is contained in the Amended Memorandum of Claim dated 21st July 2010 seeking the following reliefs:-a.Terminal benefits/severance pay, outstanding leave and allowances for the period of 6 years worked and damages amounting to Kshs. 187,921.60/-b.Costs of this suit.c.Interest on a & b.d.Any other remedy that this Honourable court may deem just and expedient to grant. 2.The Respondent opposed the claim vide a Reply to the Amended Memorandum of claim dated 9th August 2010 contending that the claim is defective, incompetent and without merits and prayed for its dismissal with costs. It also counterclaimed against the Claimant the sum of Kshs. 340,773 paid to him on ex-gratia basis. 3.The Claimant filed a Reply to the Counterclaim dated 12th October 2010 denying liability to pay the Respondent the said sum of Kshs. 340,773 and prayed for the counter-claim to be dismissed with costs. 4.The case was heard on 18th February 2026 when both sides presented their evidence and thereafter filed written submissions. Facts of the case 5.The Claimant was employed by the Respondent and in or about April 2006 he suffered bodily harm while discharging the duties assigned to him by the foreman. The accident was reported to the operations manager who organized for the Claimant to be taken to the Company clinic. The Claimant was given pain killers and released to go home. 6.The following day he was admitted at Kenyatta National Hospital for two weeks. After a month he was admitted again for another two weeks. Despite prolonged treatment he never recovered. Two doctors certified his incapacity at 100% and recommended his retirement on medical ground. The Claimant’s employment was on renewable fixed term basis and his last contract lapsed on 31st March 2008 and it was never renewed or extended. 7.He reported a dispute to the Labour Office claiming terminal benefits and Labour officer served demand letter to the Respondent. There after the Claimant brought this suit claiming the said terminal benefits plus accrued contractual dues. Evidence 8.The Claimant testified as CW1 and adopted his written statement dated 15th August 2024 as his evidence in chief. He also produced a bundle of documents marked appendix 1-3 as exhibits. He then clarified that he suffered the said injury due to the employers failure to provide proper working gear and safe working environment. Finally he contended that he was never paid the money he is claiming in the suit. 9.On cross examination he contended that he was dismissed for no valid reason. He reiterated that he got injured while on duty in 2006 and he never went to work again. He denied that the employer paid for all his medical bills. 10.He admitted that Dr. Peter Ngugi and Professor Amayo wrote letter recommending for his retirement on medical grounds. He admitted that he was not attending work due to the injuries. 11.He contended that the payment in the memorandum of payment dated 17th February 2009 was for the accident after he went to the Ministry of Labour. He further contended that the Company promised to pay his terminal dues for retirement but they tore the papers from the Ministry of Labour. 12.In re-examination he observed that documents in Page 20-32 of the Respondent’s bundle are not receipts but vouchers. He reiterated that he never worked again after the accident and he never received any salary. He also never renewed his contract. 13.The Respondents Human Resource Manager Ms. Lilian Gitari testified as RW1. She adopted her statement dated 29th November 2024 as evidence in chief and produces 33 documents as exhibits. She then stated that the contract dated 3rd January 2006 were extended till the last one of 1st January 2008 hoping that the Claimant would heal and resume work. She contended that his salary for that period of 17th months was paid vide the memorandum on Page 15 of the Respondent’s bundle being Kshs. 401,088. She stated that Kshs. 179,165 was paid towards Claimant’s hospital bill and Kshs. 72,000 as advance cash payment to him. 14.On cross-examination, she admitted that workman compensation was Kshs. 295,680. She contended that Claimant was retired on medical grounds. She further contended that the Claimant’s contract were extended from 2006 because he was retained in the payroll without dong any work. 15.In re-examination she stated that on 7th May 2008 the Respondent paid Claimant Kshs. 500,000 and he acknowledged vid the memo dated 17th February 2009. She admitted that the compensation for incapacity was Kshs. 295,680 from which the employer deducted Kshs. 72,000 advance payment plus medical expenses of Kshs. 163,365 leaving a net balance of Kshs. 60,315. The Respondent then paid the Claimant the said net balance of Kshs. 60,315 plus an ex-gratia payment of Kshs. 340,773 equaling to Kshs. 401,088. Determination 16.Having considered the pleadings, evidences and submissions, it is clear that the Claimant was employed by the Respondent under a fixed term contracts with last one running from 1st January 2008 to 31st March 2008. There is also no dispute that the Claimant suffered 100% physical incapacity in an accident which occurred while in the course of his employment by the Respondent and he never reported back to work. There is also no dispute that after the separation the Claimant filed a Labour dispute at the Labour office claiming terminal dues and thereafter he was paid Kshs. 401,088 by the Respondent. 17.The following issues fell for determination:-a.Whether the Respondent unfairly and unlawfully terminated the Claimant’s employment.b.Whether the Claimant is entitled to the reliefs sought in his Amended claim.c.Whether the Counter-claim is merited. Unfair termination 18.The Claimant contended that he was dismissed from employment unfairly by the Respondent after he suffered injuries. However, the Respondent has produced as exhibits Claimants fixed term contract running from 1st September 2004 to 2008. The last contract was dated 1st January 2008 and it was running from that date and lapsing on 31st March 2008. It follows that the Claimant’s employment contract was not unfairly terminated but it automatically lapsed by effluxion of time on 31st March 2008. Reliefs for the Claimant 19.In view of the foregoing conclusion, the prayer for salary in lieu of notice fails. For the same reason the prayer for allowances for breach of the procedure under section 40 of the Employment Act is declined. As noted above the separation occurred on 31st March 2008 which was before the current Act came into force on 2nd June 2008. Consequently, any claim grounded on the 2007 Act are not well founded and are declined. 20.As regards the other claims, the Respondent produced a copy of memo of acknowledgment of payment, to urge that it paid the Claimant all his dues and he signed the same to acknowledge a voluntary settlement. It is dated 17th February 2009 and states that:-“I hereby discharge ASP Company from their obligation in respect of all claims against them by myself flowing from my employment whether in the form of compensation, terminal dues, statutory remittances, or any form whatsoever.” 21.There is no doubt that the above memo constitutes a settlement agreement by which the Claimant discharged the Respondent from any further claims upon payment of the sum cited the said documents. During cross examination, he stated that the payments in the memo was in respect of the accident after going to the Ministry of Labour. He contended that the company promised to pay his terminal dues for retirement but the owner of the company tore the documents from the Ministry of Labour. 22.However, RW1 clarified that the memo incorporated both the accident claim, salary and ex-gratia payment less liabilities to the company. A net balance of Kshs. 401,088 was paid and the Claimant acknowledged it as full and final settlement.In Frigoken Limited v. Musotsi [2005] KEELRC 2119 (KLR) this court held that:-“It is now well settled principle of law that where an employee, voluntarily executes a settlement agreements discharging the employer from further claims with respect to the employment relations, the employee is estopped from making future claims unless the employee pleads and proves that the settlement agreement was activated with any factors that vitiates a contract at common law. I did not see such factors pleaded and proved by the Respondent. Consequently, the award of compensation cannot stand and is hereby set aside.” 23.In Coastal Bottlers Limited v. Kimathi Mithika [2018] KECA 523 (KLR), the Court of Appeal noted that:-“In our minds, it is clear that the parties had agreed that payment of the amounted stated in the settlement agreement would absolve the appellant from any further claims under the contract of employment and even in relation to the Respondents termination. It is instructive to note that the Respondent never denied signing the said agreement or questioned the veracity of the agreement. Further from the record, we do not discern any misrepresentation on the import of the said agreement or incapacity on the Respondent’s part at the time he executed the same. It did not matter that the amount thereunder would be deemed inadequate. As it stood, the agreement was a binding contract between the parties.” 24.I adopt the above decisions in this case because similar facts are obtaining. The employee executed a settlement agreement acknowledging that the sum stated therein to be full settlement and discharged the employer from further claims. The corollary to the foregoing is that he voluntarily waived any further claims with respect to his employment. The said representation was accepted by the employer and created an estoppel against the Claimant. Consequently, the Claimant is not entitled to the reliefs sought by the suit. Counterclaim for Kshs. 340,773 25.The sum of Kshs. 340,773 was ex-gratia payment and no legal or to warrant a contractual basis was shown to warrant refund. Consequently, the counterclaim is dismissed. Conclusion 26.I have found that the Claimant was not unfairly dismissed by the Respondent but rather his fixed term contract lapsed automatically on 31st March 2008 by effluxion of time. I have further found that he is not entitled to payment of the dues sought because by dint of the settlement agreement executed on 17th February 2009, he is estopped from making any further claims above the sum stated in the said agreement. Finally I have found no merits in the Counterclaim by the Respondent. Consequently, the suit and the Counterclaim are both dismissed with no costs. DATED, SIGNED AND DELIVERED VIRTUALLY IN OPEN COURT AT NAIROBI THIS 21ST DAY OF MAY 2026.ONESMUS MAKAUJUDGEAppearanceOng’uti for ClaimantKariuki for Respondent