https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2384

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT** **AT NAIROBI** **CAUSE NO. E178 OF 2020** **ROSEMARY NDINDA NDIVO.………………………………. CLAIMANT** **-VERSUS-** **HENKEL KENYA LIMITED……………………………1ST RESPONDENT** **JUDGMENT.** ***(Before Hon. Justice Abuodha Jorum Nelson)*** 1. By a memorandum of claim dated 27th April, 2020 the claimant pleaded among others that: 1. That the claimant was employed by the respondent sometimes in the year 2011 as Key Accounts Manager earning a salary of Kshs.175,000/= on a permanent and pensionable basis. 2. That she rose through the ranks of respondent to the position of Divisional Manager AC-East Africa where she was earning a gross salary of Kshs.832,053/=. 3. That the claimant worked for the respondent in different capacities the latest being Divisionl Manager AC-East Africaon a permanent and pensionable basis. 4. That on the 16th of April, 2020 she was summarily dismissed from her employment without any justifiable cause. 5. That according to the said dismissal letter the grounds for her dismissal were alleged fictitious payments of invoices, conflict of interest and insurbordination. 6. That on the 6th of April, 2020 she wrote her response to the show cause letter. 7. At the time of the termination of his contract the claimant was being paid a gross salary of Kshs.584,453/= (excluding commissions of Kshs.200,000/-) by the respondent. 8. It was unfair for the respondent to expect the claimant to know and enforce processes outside her scope and area of responsibility and expertise such as ETR receipts on invoices, supplier payment dates; LPO generation and credit limit approvals. 9. Pinpointing all the gaps within a process and blaming it on the claimant wth complete disregard of the different areas of responsibility, duties and job description is outright harassment. 10. The claimant did not have any instances in insubordination in the nine years she had worked at Henkel. She had a clean record, upstanding in character morals and performance. 11. Due to high performance, she received several global and regional accolades she had a star performance and got top ratings on all appraisals. 12. That Mr. Philippe Huenermann is not new to the business and has for the last seven years sat in the basiness reviews has been fully aware of the decisions that the claimant took for the business, appointment of distributors included and severally commenced her for the same ther were instrumental in the growth of the business. He also severally presented the same strategy performance to his superiors and therefore his suddent change of opinion spells malice. 13. That there were numerous business reviews, internal and external audits that the claimant’s department was subjected to through out since 2013 and none ever raised malpractices or irregularities or negative findings. 14. That there have been several instances where compliance policy was violated knowingly and unknowingly by several individuals as highlighted during the respondent’s internal audit. The actions proposed were the responsible parties to put in remedial actions within a time frame. 15. That on the matter of insurbodination, all LPOs signed by the claimant were rightfully actioned within her signing mandate (EUR 30,000) and indeed had two pairs of eyes as per the respondent’s company policy. And therefore, signing the same did not contravene the policy as stipulated by the compliance function. 16. That LPOs are prepared by the Purchasing department who then obain the requisite signatures before issuing the same to the suppliers. It is therefore their onus to ensure all required signatures are in place before issuing the same. 17. That purchasing procedures and function are outside the scope of the claimant’s responsibility and job description. 18. The allegations on conflit of interest are based on hearsay as the respondent have not proof that Judy Mwangi was a friend of the claimant friend and former neighbour. This is despite her explaining that Judy Mwangi has never been her friend or neighbour. 19. The claimant learnt about her deceased brother’s involvement with Ngumbau Traders two and half years after his demise. Information that she shared with the respndents when signing the conflict of interest declaration forms. She asked for the shares to be liquidated in order to resolve the conflict. 20. The claimant employment contract was terminated without the laid down procedures provided for in the company policy and thus the termination is unlawful and illegal. 21. That the respondent has defamed the claimant in its allegation imputing that:- 22. That the claimant is a fraud 23. That the claimant was paying fictitious invoices 24. That the claimant was approving invoices without LPO 25. That the claimant was carrying out fake activations 26. That the claimant is a thief 27. That the claimant is untruth worthy person. 28. The matter came to the attention of the claimant on 31st March, 2020. Prior to this several remarks and statements were made by Mr. Philipe Huenermann, to persons within and outside of the company as regards to her character based on unverified allegations. The term “Cartel” was used whilst referring to her. 29. As a result the claimant sought orders inter alia:- * 1. Reinstatement and/or in the alternative and without prejudice; 2. A declaration that the claimant’s rights and guarantee for fair labour practices and a reasonable working condition under Article 41(2)(a)(b) of the Constitution have been violated, remain violated by the respondent. 3. A declaration that the claimant’s right to be treated with dignity as provided for under article 28 and 54(1) of the Constitution has been and remains violated and threatened by the respondent. 4. The full salary with effect from April 1, 2020 to the date of the judgment at Kshs.832,053/= per month 5. In the alternative, an order to be issued compelling the respondent to pay the claimant a sum equivalent to the unexhausted statutory working years until teg ae of 60 as a guarantee at Kshs.832,053 per month. 6. Special damages as enumerated hereunder + 1. Payment of one months in lieu of notice 832,053/= 2. Unpaid salary for the month of April, 2020 832,053/= 3. Unpaid leave for each full year worked 14,976,954/= 4. Bonus 600,000/= 5. Breach of contract 150,000,000/= 6. Damages for defamation 40,000,000/= 7. TOTAL 217,241,060/= 7. General damages 8. Costs of this suit 9. Interest at court rates on i, ii, iii, iv, v, vi until payment in full. 10. Any other/further relief that this honourable court can grant. 30. The Respondent filed its Amended Statement of Response, Counterclaim and set-off dated 8th June, 2022 and averred inter alia:- 31. By an appointment letter dated 15th September, 2011, the Claimant was employed by the Respondent to serve in the capacity of Key Accounts Manager at a gross monthly salary of Kshs. 175,000/=, from which she rose in ranks to the position of Respondent's Divisional Manager, AC- East Africa. The letter of appointment states in part that: 32. The Claimant to carry out all such reasonable and lawful duties and instructions as from time to time assigned to her properly and diligently; 33. The Claimant to obey and comply with all lawful and reasonable instructions given to her by the Respondent; 34. The Claimant to be honest in her dealings with the Respondent, its customers and suppliers; 35. The Claimant to support the Respondent's policies and programs in, *inter alia*, employment equity and cultural diversity; 36. The Claimant to strictly keep separate, her private interests and interests of the Respondent and to avoid situations that may lead to conflict between her personal interests and those of the Respondent. 37. The Claimant was also required to act in the best interest of the Respondent to the exclusion of any personal advantage when and during contracts involving the Respondent. The Claimant was to adhere to the Global Henkel Code of Conduct and the Respondent's HR Manual. 38. The Claimant's assertion under paragraph 5 of the Statement of Claim that she was earning a monthly gross salary of Kshs. 832,053/- is **NOT true**. As at 16th April 2020 when the Claimant was dismissed, she earned a monthly gross salary of Kshs. 479,453/-, car and airtime allowances of Kshs. 100,000/- and Kshs. 5,000/= respectively. FACTS OF THE DISPUTE AND RESPONSE TO THE CLAIM 1. In or about early 2020, the Respondent learnt that the Claimant had engaged herself in activities that appeared to be in breach of the Respondent's policies and practices as well as the Claimant's contract of employment. The Respondent in line with its Human Resource Management Policy, decided to investigate and inquire on the suspected misconduct. On completion of the investigations, the Respondent instituted disciplinary action against the Claimant. 2. By a letter dated 31st March, 2020, the Respondent invited the Claimant to show cause as to the allegations that had been raised against her. 3. The particulars of the Claimant's suspected misconduct as captured in the show cause letter of 31st March, 2020 were as follows: 4. Two suspected fictitious marketing activities, MIT (Market Impact Teams) were invoiced by a marketing agency Evolv Ltd (Evolv) in 2017 and 2018 but the Claimant caused the money to be paid by Evolv to her personally and other staff members in her department, for private use as explained below. **Concerning Invoice Number 077;** 1. In her capacity as the Head of Consumer Adhesives, the Claimant approved the payment of Invoice No 077 dated 6th November 2017 from Evolv Ltd of KES 954, 851.32 which amount was hastily paid on 17th November 2017. The rushed payment was out of the ordinary and usual practice of making such payments within the Respondent Company. 2. The Claimant approved payment of the invoice without a Local Purchase Order (LPO) contrary to best practice and established procedures within the Respondent Company. The LPO was issued on 21st November 2017 after the settlement of the invoice, which is not proper. 3. The Claimant approved the invoice yet there was no Electronic Tax Register (ETR) Receipt**,** contrary to established practice and legal requirements. 4. The Respondent confirmed that no MIT activities took place in the territory in question in the month of November or December 2017 as invoiced (and the payment was thus suspected to have been fictitious. The Claimant instead caused the monies to be paid to her and other staff members in the Claimant's department, for private use. **Concerning Invoice No. 106;** 1. In her capacity as the Head of Consumer Adhesives, the Claimant approved payment of Invoice No 106 dated 10-March-2017 (read 2018 since 2017 appears to have been an error) of KES 1,075,305.00 from Evolv Ltd which was paid on 23rd April 2018. 2. The Claimant approved payment of the invoice without an LPO contrary to best practice and established procedures. The LPO was issued on 14th March 2018, **after fact** which was not proper. 3. The Claimant approved the invoice yet there was no ETR Receipt**,** contrary to established practice and legal requirements. 4. The Respondent confirmed that no MIT activities took place in the territory in question in the months of March or April 2018 and the payment was thus fictitious. The Claimant instead caused the monies to be paid to her and other staff members in the Claimant's department, for private use. Concerning Conflict of interest regarding Ngumbau Five Star Co. Limited (Ngumbau Traders) in that; 1. Ngumbau Traders is Henkel's distributor in the Eastern region of Kenya. Ngumbau was formed in 2013 and started trading with the Respondent in the same year. The Company was granted credit facilities in 2015. 2. Records from the Registrar of Companies show Martin Muema the Claimant's brother (now deceased) as a principal shareholder together with Jane Mulei and Victoria Mutua. The Respondent only knew of the Claimant's relation to Martin Muema in 2020 after the Claimant submitted her Conflict of Interest Declarations on 10th and 11th January 2020. 3. She did not declare the conflict of interest until January 2020 yet Ngumbau Traders has been trading with the Respondent since 2013, **a period of 7 years**. 4. The Respondent had reason to believe that Ngumbau Traders has been receiving preferential treatment. **Concerning Conflict of interest relating to Juker International (Juker) / Gluetex Builders Distributors Limited (Gluetex) and related reasons in the following manner:** 1. Juker International was at all material times one of Henkel's distributor of consumer adhesives in Central Kenya. The Company was registered in March 2014 shortly before commencing the distribution business with Henkel. 2. The directors of Juker International are Judy Mwangi and Esther Kerubo. Judy Mwangi was believed to be the Claimant's close friend and former neighbour in Embakasi estate. 3. Juker's directors are believed not to have expertise in distribution business since Judy Mwangi runs a school while Esther Kerubo is known as an official working in the purchasing organization of the United Nations offices in Nairobi. 4. The Claimant granted Credit facilities to Juker in June 2014, soon after the commencement of the business relationship. (Pages 23 to 24 of the Respondent's bundle of documents PH 1). 5. Towards the end of 2018 Juker ran into financial difficulties and defaulted on payments of Kshs 9,431,500 owed to Henkel. Juker stopped trading with Henkel but the debt remained outstanding in the sum of Kshs. 4,365,742. Out of this Kshs. 4,000,000 was only paid to Henkel in March 2020 following the intervention by Henkel's Managing Director and the credit block of Gluetex's account. 6. A new company by the name Gluetex Builders Distributors Limited (Gluetex) was subsequently registered in November 2018 and it took over the business previously conducted by Juker***.*** The directors of Gluetex are the same Judy Mwangi referred to above and one Doris Mwende Kianga. 7. The Claimant caused and allowed Gluetex to start trading with Henkel notwithstanding Juker's previous and continuing default in settling the outstanding amount. Until February 2020, the Claimant was generally lax in pursuing settlement of this debt. 8. The Claimant granted credit facilities to Gluetex in December 2018. 9. The credit application falsely stated that Gluetex has been in business for the past 5 years a fact the Claimant knew or ought to have known was false. In January 2019, the Claimant raised the credit limit for Gluetex from Kshs. 5 million to Kshs. 25 million without informing her line manager, Philippe Huenermann who had approved the initial application. 10. The Claimant did not at any point disclose her close association to Juker, Gluetex and Judy Mwangi. vi. The above matters relating to Ngumbau Traders, Juker and Gluetex amounted to conflicts of interest and thus a violation of the following: 1. The clause on conflict of interest in the Claimant's letter of appointment. 2. Clause 2.3 Human Resources Policy Manual (the Manual) which requires Henkel employees to avoid conflicts of interest. 3. Clause 2.4 of the Manual which requires employees to ensure that their actions and decisions are free from personal conflict of interest in all cases. 4. Clause 2.7 of the Manual which prohibits conflict of interest and gives as an example a conflict arising from *‘****Business relationships with a company in which an employee, a relative or a friend of an employee has a direct or indirect stake in the form of a significant shareholding****'.* 5. Clause 2.9 of the Manual that extends conflict of interest with business partners to even the appearance of conflict of interest. 6. Clause 5.3.2 of the Manual which requires employees to disclose and report a conflict of interest failing which such serious fault shall be actionable under the disciplinary procedure. 7. Clause 5.3.3 of the Manual which provides that conflict of interest *‘may take the form of a shareholding or having a family member or friend working for a Company or a Contractor associated with Henkel'* 8. Clause 5 of Global Henkel's Code of Conduct. vii. Concerning insubordination and disobeying lawful instructions. The Claimant failed to abide with an instruction issued by her line manager on numerous occasions in that: 1. On 31st May 2019, the Respondent's Managing Director, Mr. Philippe Huenermann**,** being the Claimant's line manager expressly instructed her by email to always obtain approvals from him for any purchase order relating to promotion activities, advertising materials, events, sponsorships etc. 2. Among others, the following orders for such goods and services were procured without obtaining authorization from Philippe Huenermann as her line manager as required: 3. Purchase order 27571 of 23-Sep-2019 to Smart Printers Ltd for 10 Floor Stand Displays valued at Kshs. 230,000.00. 4. Purchase order 27676 of 7-Oct-2019 to Smart Printers Ltdfor 5,000 wall calendars valued at Kshs. 390,000.00. 5. Purchase order 27693 of 29-Oct-2019 to Vaja's Manufacturers for 3,000 dustcoats valued at Kshs. 1,470,000.00. 6. Purchase order 28121 of 10-Dec-2019 to Kraft Brand Design Ltd. for 7 Free Standing Units valued at Kshs. 519,003.00. 7. Purchase order 28439 of 23-Jan-2020 to Smart Printers Ltd for various AC stickers valued at Kshs. 261,000.00. 8. Purchase order 28440 of 23-Jan-2020 to Brand Central Ltd. for 50 branded hoodies valued at Kshs. 90,000.00. viii. By the same show cause letter of 31st March 2020 and in line with Clause 27 of the Respondent's. Human Resource Manual and Section 41 of the Employment Act, 2007, the Claimant was asked to submit her written submissions/response to the allegations raised against her by 6th April, 2020. She was also invited to a disciplinary hearing at the Respondent's Nairobi office on 7th April, 2020. **ix.** On 6th April, 2020, the Claimant by a letter dated 3rd April, 2020, responded to the Respondent's show cause letter denying all the allegations that had been raised against her. **x)** On 7th April, 2020, the Claimant attended the disciplinary hearing whereupon she was given another opportunity to make her oral representations. **xi)** As can be noted from the minutes (which were signed by the Claimant), and also considering the Claimant's response, the Claimant did not give satisfactory explanations to the issues in that; **ix** Concerning the suspected fictitious marketing activities, 1. The Claimant was informed of multiple allegations by whistleblowers of suspected fictitious payments to Evolv and that even Evolv's Managing Director admitted to inflating the number of activation days to allow for payment of kickbacks. The whistle blowers' details included information given to the Respondent by Titus Kajume, a former employee of the Respondent who closely worked with the Claimant at all material times. Details of the whistle blower information will be set out in the Respondent's witness statements and supplementary bundle(s) of documents to be filed herein. 2. As noted in the minutes of the disciplinary hearing, the allegations of kickbacks were discussed during the session and the Claimant admitted knowledge of the kickback allegations relating to Evolv and also admitted that she did not escalate the issues to her superiors. 3. While the Claimant alleged that the marketing activities were postponed from March 2018 to June 2018, the Respondent did not find any evidence to support this allegation. Mr. Ogema, the supplier of the goods confirmed that the marketing activities did not take place as invoiced. 4. In any case, if indeed the activities were postponed as alleged, the Claimant did not give a satisfactory explanation of the hasty manner in which advance payment of the invoices concerned was made and this made the Respondent believe that there was indeed impropriety in the payments in question. According to the Respondent's Corporate Standards on Purchasing any such advance payments needed an extra level of approval, that is by a person having the MC1 mandate (which the Claimant did not have), Purchasing or by delegation Country CFO or President. 5. The Claimant did not provide a satisfactory explanation for the non-compliant LPO creation process being the manager responsible for all sales and marketing spends of her department. The assertion that this was not under her docket is not true. She was responsible for the sales and marketing expenditure for her department. 6. It is very important to note that she has indeed admitted the fact that approving LPOs was a function that fell within her docket at paragraph 29 of her affidavit and paragraph 22 of her statement of claim, where she admits that she signed certain LPOs concerning marketing activities, within her authorization mandate. x. With respect to the conflict of interest over Ngumbau; 1. The Claimant did not declare the conflict of interest until January 2020 yet Ngumbau Traders has been trading with Henkel since 2013. 2. The Claimant alleged that she did not know of the conflict until October 2019. The Respondent did not find this to be a satisfactory or reasonable explanation given that the person involved is her brother! 3. The Respondent considered that is more probable than not that the Claimant knew of the conflict but failed to disclose until January 2020. 4. It is important to note that Ngumbau Traders was formed in 2013 principally to trade with the Respondent. The Respondent, therefore, had reason to believe that the Claimant knew of the conflict but failed to disclose it. 5. In any case, the Claimant did not explain why she did not disclose the conflict in October 2019 when she allegedly became aware of it. 6. While the Claimant initially alleged that she was not aware of the conflict of interest requirements, she eventually admitted that she did when it was pointed out that the requirements are expressly set out in her letter of appointment, Henkel's Global Code of Conduct and HR Manual. 7. Given that the Claimant has maintained herein the allegation that she did not know of the conflict until only recently, the Respondent has recently conducted further investigations subsequent to the Claimant's dismissal which investigations confirm that the Claimant's deceased brother frequently visited Henkel and interacted with the Claimant and other staff members as a representative of Ngumbau on numerous occasions before his death. The details of these will be adduced by the Respondent's witnesses at trial. The allegation by the Claimant that she knew of the conflict only in October 2019 cannot therefore be true. xi.With respect to the conflict of interest over Gluetex/Juker 1. While the Claimant alleged that Judy Mwangi was not a close friend of hers, the Respondent did not consider the Claimant's explanations to be satisfactory given the apparent preference accorded to Juker. 2. In particular, Juker was appointed a regional distributor yet it had no known established experience and capability having been established solely and exclusively to trade with the Respondent. 3. No significant effort was undertaken by the Claimant to collect the outstanding amount from Juker after they stopped dealing with Henkel. Judy Mwangi was allowed to continue trading with Henkel as Gluetex while clearly not complying with the terms of the agreed payment plan for Juker. 4. In view of the suspected close association with Juker, the Respondent was not convinced of the Claimant's explanation and had reason to believe that the Claimant falsified Juker's experience in the credit application form. 5. The Claimant also did also not give a plausible explanation on why she irregularly enhanced Juker's credit limit. 6. The Claimant's explanation during the disciplinary hearing that she was not aware of guidelines on the appointment of distributors was not satisfactory and she even admitted that she did not seek any clarification if indeed there was lack of clarity. **xii. With respect to insubordination and disobeying lawful instructions regarding the instruction to the Claimant to obtain approvals from her line Manager, Philippe Huenermann for any purchase order relating to promotion activities, advertising materials, events, sponsorships etc.;** 1. The Claimant's response was a bare denial and in fact raised more questions than answers. 2. Philippe Huenermann, the Claimant's line manager specifically asked the Claimant to always seek approval from him for the LPOs for the sponsorship activities. This was by the email of 31st May 2019. 3. It was extremely important for the Respondent to ensure that there were controls on the LPO creation and approval process given the history of matter as more particularized below. 4. The Claimant confirmed that she would adhere to her line manager's instructions but blatantly ignored and approved the LPOs without his approval. 5. It is not true that the Claimant was not involved in the approval of LPOs. She as the head of Consumer Adhesives had the last say on approval of invoices but then she was required to ensure she seeks approval from her Line Manager given the history of the matter. 6. The LPOs in question were actually signed by her. 7. She has even confirmed at paragraph 22 of her Statement of Claim that the signed LPOs were within her signing mandate. 8. The LPOs were indeed within the Claimant's signing mandate as per the Respondent's Corporate Standard on Commitment Authorization but this did not justify her deliberate contravention of her supervisor's instructions. 9. The Claimant confirmed by her email of 31st May 2019 that she would adhere to her line manager's instructions. She suggested by the same email that Emma Etyang of purchasing department assists in ensuring that her line manager's instructions were adhered to but her line manager did not respond to her suggestion. 10. Given the sensitivity and history of the matter, Philippe Huenermann was deliberate in asking the Claimant as the Head of her department to ensure that she does not approve any such LPOs without his permission. 11. The fact that the Claimant insisted during the disciplinary hearing and has also done so herein, that the role of ensuring her line manager's instructions were adhered to was of the Purchasing Department confirms that she disregarded her line manager's instructions and relied on her own suggestions which he had not affirmed. The Claimant's line manager's instructions were solely directed to her and not to any other person. This was clearly insubordination. 12. The issue of the approval of LPOs for marketing, sponsorships and like activities had a sensitive history, which was well known within the Respondent generally and particularly the Claimant in that: 13. In or about mid-2019 (just around the time the above email of 31st May 2019 was sent to the Claimant), the Respondent learnt that certain staff members appeared to have been involved in receiving monies personally on the pretext that they were meant for sponsorship of a basketball team. 14. The Respondent carried out investigations which led to the institution of disciplinary action against a former employee who exited the Company in the course disciplinary process. 15. The Claimant was suspected to have been implicated in the irregular and fictitious payment and particularly due to her involvement in the signing of a contract between Henkel and the basketball team which was irregular in that; 16. It was signed by the Claimant who, alone had no signing authority for the Respondent. 17. It had no “two pairs of eyes” as required by the Respondent's standards. 18. The contract was not vetted by Henkel's legal department and no payments ought to have been made. 19. The contract was not transparently shared with Henkel and was not uploaded into the global sponsorship database. 20. The Contract did not give the amount payable by Henkel to the basketball team; 21. The Claimant's line manager raised the foregoing with the Claimant as can be noted in email threads exchanged in May, 2019. 22. Philippe Huenermann questioned the Claimant on the issue and she was also questioned by the Respondent's In-house Legal Counsel, Antje Peth-Anders. The two noted inconsistencies in the Claimant's answers as can be noted from the email thread exchanged between Philippe Huenermann and Antje in June 2019. 23. While no disciplinary action was taken against the Claimant concerning the basketball team payments, the foregoing narrative is key to set out the sensitivity and history which formed the backdrop of the email Philippe Huenermann sent to the Claimant on 31st May 2019 asking her to specifically seek approval from her Line Manager on LPOs relating to sponsorship and marketing payments. The Respondent has subsequently decided to file a counterclaim arising from the irregularities committed by the Claimant in entering into the contract. The details are set out below. 24. Given the history and sensitivity of the issue, the Claimant should have strictly adhered to her Line Manager's instructions but she did not and hence the insubordination. 25. Subsequent to the Claimant's dismissal, the Respondent also learnt that the Claimant singly signed yet another contract with Majid Al Futtain Hypermarkets Limited trading as Carrefour on 3rd December 2019 in gross violation of the Respondent's Corporate Standards on Conclusion of Contract (CSCC). The Claimant signed the Carrefour contract despite having been instructed by her line manager in or about early 2020 not to do so after she had previously signed the basketball contract as explained above. The violations with respect to the Carrefour contract included signing the contract without the involvement of legal counsel and also violating the “2 pairs of eyes principle”. The CSCC and the Carrefour contract are produced in the Respondent's supplementary bundle of documents. xxii. While the foregoing did not form a ground for the Claimant's dismissal, it is a relevant factor in considering the issue of insubordination and the Claimant's previous conduct.The Claimant having failed to satisfactorily respond to the issues set out in the show-cause letter and in line with the Respondent's Disciplinary Committee findings and as well as Clause 27 of the Respondent's Human Resource Manual, the Respondent by a letter dated 16th April, 2020, summarily dismissed the Claimant from employment on account of gross misconduct. xxiii. The Respondent subsequently by an email of 23rdApril, 2020, informed the Claimant of an avenue for appeal against her dismissal. The Claimant by an email of 23rd April, 2020 responded to the Respondent's email of even date asserting that she would not appeal against her dismissal on the basis that the procedure ought to have been outlined in her summary dismissal letter. ix. The Respondent denies the Claimant's claims that the disciplinary issues raised against her were actuated by malice and were not within her scope. The Respondent maintains that the Claimant's employment contract and her role and position as the head of the Consumer Adhesives required her to protect the company's interests and to do everything lawful in the interest of the company. The Respondent had reason to believe that the Claimant did not conduct herself as required given her failure to provide satisfactory explanations. The Claimant's allegations of malice are therefore baseless and have no justification at all. x. In addition, the disciplinary issues the Claimant faced were very key and related to specific issues of glaring misconduct, contrary to her assertion that they were related to alleged gaps and shortcomings in the Respondent as alleged at inter alia paragraphs 12 and 13 of the Statement of Claim. The averments in these paragraphs are therefore irrelevant to the extent that they do not justify the Claimant's gross misconduct. xi. In view of the averments at paragraphs 6 to 18 above, the Claimant's allegations at paragraphs 7 to 13 are denied in *toto* an the Claimant's dismissal was based on her gross misconduct. The matters relating to her performance at paragraphs 15, 16, 17 and 18 of her Statement of Claim are therefore irrelevant. xii. The Respondent denies the Claimant's allegations under paragraph 19 of her Statement of Claim and avers that prior to 2018, the Claimant's reporting line was to regional business heads, initially in South Africa and later in Dubai, who had limited visibility of the day-to-day operations in Kenya. The appointment of Ngumbau and Juker happened when the Claimant's direct reporting line was not in Kenya under Phillipe Huenermann. Philippe Huenermann only became the Claimant's direct line manager in 2018 as a result of certain re-organisations within Henkel Global. xiii. Since 2018 there were several anonymous reports that were made to the Respondent about the Claimant's conduct pointing towards non-compliant actions including the suspected fictitious marketing activities among others. The investigation into these allegations was delegated to regional compliance office in Dubai. No disciplinary action was however then taken against the Claimant. ix. The Claimant has also in the past been involved in an inappropriate personal relationship with one of her supervisees who reported directly to her. Philippe Huenermann as her Line Manager, discussed the issue with her and she owned up to it and assured him that it had been resolved. No action was taken against her. x. The Claimant was also implicated in the previous basketball suspected fictitious payments as explained above. The Claimant has thus been watched closely in view of the foregoing and this is what informed the instruction not to unilaterally approve POs for marketing related activities. In early 2019 a former team member of the Claimant's team left the company. In the standard exit interview, she made some allegations about the unprofessional style the Claimant manages the business. This also raised a concern. There was no sudden change on the part of Mr. Philippe Huenermann as alleged at paragraph 19 of the Statement of Claim. xi.The foregoing also confirms that the Claimant's conduct was questionable in the past contrary to her allegation at paragraph 14 of her Statement of Claim and that the Respondent has actually been lenient on the Claimant who may have taken disciplinary action against the Claimant in the past. The allegations of malice or harassment are therefore unfounded. xii. Contrary to the Claimant's averments, she was found culpable of insubordination as explained in detail above. The Respondent reiterates the fact that, the Claimant has given conflicting and incorrect information both in her response to show cause and on oath under paragraphs 9, 10 and 29 of her Affidavit sworn on 28th April 2020; as well as at paragraphs 12, 23 and 24 of the Statement of Claim that she was not involved in any way with the LPOs (which is not true since she signed the LPOs in question) on the one hand, yet on the other hand at paragraph 22 of the same Affidavit and paragraph 22 of her statement of claim, she asserts that dealing with the LPOs was within her mandate. This clearly indicates how the Claimant's assertions conflict and therefore lack veracity. xiii. The Claimant's assertions in paragraph 21 and 22 of her Statement of Claim are not true. They have in any event not been particularized as required. In any event, the audit process she relies on did not in any way point out any disciplinary issues herein upon which she was found to have grossly misconducted herself. The fact that the previous audits did not unearth the issues herein cannot invalidate the disciplinary process. xiv.The Respondent as an employer to the Claimant, had the prerogative to determine grounds for dismissal of the Claimant so long as they met the validity, reasonableness and fairness test as required by the Employment Act, 2007. The reasons given for the Claimant's dismissal were valid and reasonable in the circumstances. xv. The Respondent reiterates the averments made in paragraph 11 above in response to the conflict-of-interest issues relating to Ngumbau and Juker as alleged by the Claimant at paragraphs 24, 25 and 26 of the Statement of Claim. xvi. Contrary to the Claimant's assertion under paragraphs 27 and 28 of her Statement of Claim, the 1st and 2nd warnings do not apply in circumstances of gross misconduct. The Claimant's actions amounted to gross misconduct for which the warnings she is referring to were not applicable. xvii. Contrary to the Claimant's allegations in paragraph 29 of her Statement of Claim, at no point during the disciplinary hearing or at the commencement of the disciplinary proceedings did the Claimant object to Mr. Phillipe Huenermann's involvement and participation in the proceedings. The Claimant is raising this issue at this point purely as an afterthought. In any event, Philippe Huenermann was the Claimant's Line Manager at the material time and therefore no other person was suitable to have sat in the Disciplinary Committee. As the Respondent's Managing Director, as well as the Compliance Officer in Kenya, Philippe Huenermann had to be engaged in the Claimant's disciplinary process given the Claimant's non­compliance with the Respondent's policies. xvii.The Respondent denies all the allegations in paragraphs 30 and 31 of the statement of Claim and puts the Claimant to strict proof thereof. In further response to paragraph 30 of the Statement of Claim, the Claimant was not entitled to the13th month bonus after her promotion in 2014. This is in line with the Respondent's Corporate Standard on Bonus Scheme *a copy of which is produced in Respondent's supplementary bundle of documents.* Upon the Claimant's promotion in 2014, her salary was reviewed upwards and she was thus not eligible to the 13th month bonus which was a discretionary payment. The Claimant's salary was also reviewed upwards, and this was done out of the review cycle in some occasions as can be seen in ***the schedule of the Claimant's annual salary progression attached in the Respondent's supplementary bundle of documents***. xviii. In further answer to paragraph 31 of the Statement of Claim, the ***Respondent's Corporate Standard on Bonus Scheme*** does not allow an employee to be on two incentive schemes simultaneously. Clause 2.1 of this standard provides that “*Employees in the Sales Incentive scheme are not eligible for Short Term Incentive”*. This was why the Claimant had to choose between the sales commission and annual incentive. ix. The Respondent denies the Claimant's allegations of defamation at paragraphs 32 and 33 of the Statement of Claim and avers that defamation as alleged by the Claimant cannot suffice in cases of disciplinary proceedings between an employer and employee. Each and every particular of defamation is denied in *toto*. The Claimant was dismissed after an internal disciplinary process as allowed by law. The summary dismissal letter was not sent to any third party but to the Claimant only. In any event, the Claimant has not particularized her averments of defamation as required by the law. The claim for defamation cannot therefore stand and should be dismissed. x. The Claimant is not entitled to the orders sought in that; 1. The Claimant's claims are outrageous and frivolous. They have no basis in law and are thus unsustainable; 2. The Claimant has not met the test for the grant of the order for reinstatement sought at paragraph (a). Reinstatement can only be granted in exceptional circumstances and none exist herein. Reinstatement cannot be granted when trust and confidence is broken as is the case herein. The tests for reinstatement under section 49 of the Employment Act have not therefore been met. 3. The declarations sought at prayers (b) and (c) are not merited since the dismissal was lawful; 4. The prayers sought at paragraphs (d) and (e) are not tenable in law and cannot be granted; 5. Regarding the alleged special damages at prayer (f): 6. The claim for notice pay of one month is not payable since the Claimant was summarily dismissed. 7. The Claimant was paid her salary up to 16th April 2020 which was her last day of work. The claim for salary for April 2020 has no basis. 8. The claim for unpaid leave a full year worked is without basis and is in fact not properly particularized. There is absolutely no basis for claiming Kshs. 14, 976, 954 or any part thereof on account of alleged accrued leave. The Claimant was duly paid her accrued leave of 54.3 days as noted in the breakdown of terminal dues referred to above. 9. The Claimant was duly paid her bonus and commissions as shown in the terminal dues breakdown referred to above. 10. The claim for breach of contract in the sum of Kshs. 150,000, 000 or any part thereof is without basis. There was in any case, no breach of contract. This claim is framed as a special damage claim yet it cannot be specifically and strictly proved since it has no basis 11. Damages for alleged defamation in the sum of Kshs. 40,000,000 do not lie in law and this claim is not tenable in law. There was no defamation as alleged or at all. 12. The Claimant was dismissed after an internal disciplinary process as allowed by law. 13. There is no basis for the claim for general damages under prayer (g). General damages are not payable for alleged breach of contract. This is a well settled principle of law. 14. The Claimant's claims are frivolous, vexatious and amount to an abuse of the court process. The Claimant did not disclose material facts that she sought for a mutual separation with the Respondent in the course of the disciplinary proceedings against her. In particular, by an email and a text message of 15th April, 2020, the Claimant wrote to the Respondent seeking for a mutual exit option and asked for payment of gratuity, one month salary in lieu of notice for her to hand over the Respondent's property/assets which were in her possession. 15. On receipt of the Claimant's email of 15th April, 2020, the Respondent, vide an email and text message of 15th April, 2020 and 16th April, 2020 respectively, informed the Claimant that it could not consider her proposals on mutual separation on account disciplinary proceedings and that it would be proper for her to wait for the outcome. 16. The Respondent avers that the Claimant's offer for a mutual separation inferred guilt on her part and therefore her claims of malice and defamation as against the Respondent are unfounded. The Claimant was quite aware of her gross misconduct and was willing to leave her employment even before a disciplinary committee verdict was passed to her in any way. For these reasons, her claim for reinstatement should also failThe Claimant is thus not entitled to the orders sought since the Claimant has not come to this Honorable Court with clean hands. She has not disclosed essential /material facts and has also misrepresented facts in that: 17. As noted above, the Claimant has not disclosed **a very material fact** that on 15th April 2020, she offered to mutually separate with the Respondent after the disciplinary hearing which was held on 7th April 2020 and after she had signed the disciplinary hearing minutes on 14th April 2020. She asked for an exit package but given the seriousness of the disciplinary issues facing her, the Respondent did not consider nor accept her offer on mutual separation. 18. Having noted the seriousness of her misconduct after the disciplinary hearing, the Claimant offered to exit but before a decision was made by the Respondent. 19. It is therefore clear that she filed these proceedings only as an afterthought after the Respondent declined to consider her offer to mutually exit. 20. It is not tenable for this court to consider the Claimant's prayer for reinstatement and any of the other orders sought in the Claimant's statement of claim considering that she was ready to exit the Respondent on her own volition! 21. The Claimant has not disclosed that she failed and/or refused to appeal against her dismissal. The Claimant does not deserve the orders of reinstatement and all the other orders as sought. 22. The Claim is also based on falsehood and misrepresentation. The Claimant, for instance, states that her last monthly salary was Kshs. 832,053/= which was not the case. 23. The Claimant was duly paid her terminal dues on 9th May, 2020 by way of Electronic Funds Transfer (EFT) on request by the Claimant. The Respondent had prior to the EFT remittance tried to pay the Claimant by cheque but she declined to accept payment. 24. The Respondent prays that the Claimant's suit be dismissed with costs to the Respondent. **COUNTER-CLAIM AND SET OFF** 1. The Respondent repeats the contents of paragraphs 1 to 47 above and counterclaims as follows: 2. As noted above and particularly at paragraphs 8 and 12 of the Statement of Response, the Claimant was involved in suspected fictitious activities which occasioned loss to the Respondent in the sums of: 3. Kshs. 954, 851.32 as set out in Invoice No. 077 dated 6th November 2017 from Evolv Ltd. 4. Kshs. 1,075, 305.00 as set out in Invoice No. 106 dated 10-March-2017 (read 2018 since 2017 appears to have been an error) from Evolv Ltd **Total Kshs. 2, 030, 156. 32** Therefore, the Respondent claims Kshs. 2,030,156.32 from the Claimant. As detailed at paragraphs 8(V) and 12(IV) above, the Claimant made irregular payments which had not been approved by her line manager, in contravention of the line manager's instructions given on 19th May 2019 which action caused loss to the Respondent in the sum Kshs. 2,960,003.00 broken down as follows: 1. Purchase order 27571 of 23-Sep-2019 to Smart Printers Ltd for 10 Floor Stand Displays valued at Kshs. 230,000.00; 2. Purchase order 27676 of 7-Oct-2019 to Smart Printers Ltd. for 5,000 wall calendars valued at Kshs. 390,000.00; 3. Purchase order 27693 of 29-Oct-2019 to Vaja's Manufacturers for 3,000 dustcoats valued at Kshs. 1,470,000.00; 4. Purchase order 28121 of 10-Dec-2019 to KKraft Brand Design Ltd. for 7 Free Standing Units valued at Kshs. 519,003.00; 5. Purchase order 28439 of 23-Jan-2020 to Smart Printers Ltd for various AC stickers valued at Kshs. 261,000.00; 6. Purchase order 28440 of 23-Jan-2020 to Brand Central Ltd. for 50 branded hoodies valued at Kshs. 90,000.00; Therefore, the Respondent claims the sum of Kshs. 2,960,003.00 against the Claimant. xi. As noted in paragraph 13 above, the Claimant irregularly signed a contract with Tangit Sparks which was the basis upon which irregular payments were made to a basketball team as purported sponsorship support, as more detailed at paragraph 13 above. The irregular payments were in the sums of Kshs. 4,230,000 and USD 1652.64 which had not been approved by the Respondent. As a result of the irregularities in entering into the contract, no due diligence was conducted on Tangit Sparks, the party to the agreement, and which had no separate legal entity. As a result of which, payments were made to a third entity Executive Sports Connect Africa Limited which was not a party to the contract. These irregular payments are broken down as follows: 1. Kshs. 76,000/= paid to Masaku Sparks Women Basketball Team (made in cash). 2. Kshs. 232,000/= paid for invoice No. 6 dated 9th October, 2018; 3. Kshs. 174,000/= paid for Invoice No. 7 dated 17th October, 2018; 4. Kshs. 1,392,000/= paid for Invoice No. 8 dated 18th December, 2018; 5. Kshs. 464,000/- paid for Invoice No. 9 dated 5th February, 2019; 6. Kshs. 232,000/= paid for Invoice No. 10; 7. Kshs. 1,660,000/= paid for Invoice No. 11; and 8. Samurai Sportswear payment for Sparks Basketball team- Tangit kit in the sum of (USD 1652.64) 9. Therefore, the Respondent claims the sums of Kshs. 4,230,000.00 and USD 1652.64; **SET-OFF** * + 1. Without prejudice to the averments made above, in the event that the court awards any damages to the Claimant, the Respondent hereby seeks a set off of Kshs. 9,220,159.72 and USD 1652.64 being the total losses and damages as particularized in the counterclaim above, against any award that may be made by this court in favour of the Claimant (which the Respondent reiterates is not payable). Xiii. Alternatively, the Respondent further seeks that the sums due from the Claimant be deemed as final satisfaction of any award that may be made to the Claimant (which award the Respondent reiterates is not payable) in line with the provisions of Section 49(4)(m) of the Employment Act. **EVIDENCE** 1. The claimant in her evidence stated among others that she was a sales and marketing professional and that she recorded a statement on 27th April, 2020 which she relied on as her evidence in chief. She further relied on her bundle of documents filed with the claim and more particularly on CEX 1 found at page 25-91 of the bundle. The claimant further states that the respondent was her employer from 2011 to 2020 and that she held various roles in sales department. The time she was leaving, she was divisional head for consumer adhesives and that her monthly salary at exit was Kshs.479,453. She was also entitled to care allowance and that her emoluments were evidenced in the payslip attached to her documents at page 26. 2. Concerning reporting level, she stated that she reported to various people and that at the time of departure she was reporting to one Philippe Huenermann. Her role was to market and sell items under her docket. It was her evidence that the respondent achieved growth in sales through the time she was there and that she received several promotions and that they were based on the growth of the company and further that she received several accolades including one award in Turkey. It was her evidence that she had a cordial relationship with her line manager for a long time however later he started having issues with her. 3. Concerning terms of service, she stated that the policy manual was referred to in her letter of employment but was never issued with a copy and that she saw it when she was issued with a show cause letter. It was further her evidence that procurement policy was not within her area of operation because she was not in procurement and that she saw it for the first time in court. She stated that she was not responsible for procurement but only made requests for procurement for things she needed and would in that respect sign LPOs. She further stated that there was an allegation that she received payment from a company called Evolve but denied receiving any payment from them and that she had not seen any evidence of receiving payment from them. Concerning her mandate for signing any transaction, she stated that her limit was 30,000 Euros and that she never signed any amount beyond her limit. No evidence had been provided that she did and that she was aware of the “two pairs of eyes” principle. It meant a document needed at least two signatures. She would approve requests from her department to procurement. Sourcing and procurement of LPO was with the purchasing department. They were the ones who issued LPO’s. Her responsibility was to confirm the request emanated from her department and would sign for that purpose and that purchase department were the custodians of LPO. They sent LPO’s to suppliers and that a document signed beyond her limit would require the next higher-level approval and further that she was not in charge of finance and payments approval. 4. Concerning activities alleged against her, it was her evidence that she provided reports that showed they were sales promotion activities as shown at page 215 of RBD. She further stated that she was aware of conflict-of-interest policy, 2016 and that she became aware of it in 2019. Regarding Martin Mutuku, she stated that was her brother and that he died in 2017 and that she became aware after his death that he acquired shares in one of the respondent’s distributors Ngumbao Five Star and that she spoke to Betty Njagi and asked her what she should do, that being a past conflict and that she declared conflict after her brother had died. It was her evidence that she would not know the shareholding of companies unless was asked for CR-12 from company’s registry. There was no requirement to ask for CR 12 and that she did not recruit Ngumbao Five Star Company as respondent’s distributor. Customers for respondents were freely recruited. There were no laid down processes. The main criterion was financial standing of the customer. The respondent only needed certificate of incorporation and tax compliance and finance approved credit facilities. There was not preferential treatment to Ngumbao. What it received all other clients received. 5. Concerning her department, she stated that it was audited during her tenure and that there was both internal and external audit. There were no adverse findings filed. Concerning performance appraisals, she stated that these conducted annually and that they were done by her line manager. They were always outstanding and her promotions arose out of them. She further stated that promotion was not just in appraisal. It included leadership skills. She denied ever being insubordinate and that there has never been a complaint about her being insubordinate to her line manager Mr. Philippe. The issue he complained abut was something she could not do. He wanted to sign all LPO’s and she told him this could only be acted on by the custodian who was the procurement officer – Emma Etyang and that she signed LPOs to her limit. 6. Concerning the disciplinary process, she stated that she never received any warning from the respondent and was not aware of any investigations over the issue. She was never supplied with any report and that attended the disciplinary hearing. It was chaired by Philippe. There was also the IT-Manager Betty Njoge and Ranjan Das – Regional Human Resource, who joined virtually from Dubai. According to her, Phillipe was her accuser. There was no Human Resource Manager locally and that the IT Manager was acting Human Resource Manager. She was given the minutes of the meeting and that Betty signed her dismissal letter. According to her Betty was not a registered Human Resource professional. She was issued with certificate of service upon termination. The claimant further stated that she knew Titus Kajume and that she was working under her and that he left in March 2020. By the time he was leaving he was Trade Manager in charge of special programs and that his performance was not good. He had absconded work for about three months and that by the time he left. She denied any personal relationship with Kajume. She further denied receiving any payment from any supplier and never participated in Kajumes disciplinary hearing. She complained that the respondent continued to give negative feedback about her whenever they are asked about her. 7. In crossexamination she stated among others that her estimated salary was 832,053/= and that her gross salary was Kshs. 584,453/=. It was her evidence that the first salary pleaded included sales commission variable pay which was part of her salary. Ragarding duties at work, she stated that employment duties included obeying lawful and reasonable instructions. The duties as stated in the letter of appointment included disclosing conflict of interest, high ethic standards and avoiding situations of conflict interest. She also acknowledget that it was her responsibility to act in the best interest of the company and that personal interest must not take priority and further that she signed her letter of appointment in September, 2011 but was not given the Human Resource policy and manual until during the disciplinary hearing she however never raised any issue about it. 8. Regarding her termination of service, she stated that it was not on account of performance and that she was not put on PIP. She admitted that her termination of service was on account of misconduct. Concerning payment to Evolve, she conceded that was on the payment document found at page 8 of RBD. According to her, her role was to confirm the activity had been done and that she never approved payments and further that she was not involved prior to payment of invoices. She stated that she signed the payment document to Evolve to confirm services had been rendered. The payments were for market restoration (promotion activities) but according to the respondent these activations never occurred but according to her she provided evidence that they occurred. She however confirmed that email from Ogama at page 7 RBD denied they occurred but stated that Ogama was not involved in activation. She confirmed that as per pages 212 – 214 of the RBD (minutes of Disciplinary Committee) which she signed at page 214, she acknoweledged that Emco Traders was run by Ogama. 9. Concerning kickbacks, she denied knowledge of kickbacks and that evidence of kickbacks was never provided. I am not aware of kickbacks. I responded to allegations. Concerning Ngubao Traders, she stated that it started trading with the respondent in 2013 and that her late brother was not running Ngubao Traders by then and that she knew her brother’s involvement with Ngubao Traders in 2019 and that her work entailed visisting all distributors under her docket including Ngubao. I did not know about my brother’s involvement in Ngubao. She further stated that she was not aware that her brother visited Henkel. 10. Concerning Gluetex, she stated that it was within her docket and that it was previously called Junker and that both companies were associated to one person Judy Mwangi. She however denied close association with Judy and further denied ever gaving Gluetex any preferential treatment. She however acknowledged that Gluetex was registered in 209th November, 2018 and that account opening forms found at page 26 RBD she called upon Glutex to provide physical finding address and that she listed it. Gluetex transitioned from Junker and that the five years referred to Junker not Gluetex. 11. The claimant further stated that her role was to reconnect credit but to grant the reconnection was for finance to consider. Regarding approval limit she stated that the limit of 5 million was approved by Phillipe. She acknowledege email from Phillipe dated 31st September, 2019 which informed her that she was required to receive approval for any purchases or orders relating to promotion from Phillipe and that she responded to the email on the same day undertaking to adhere to the request and requested Emma to ensure it was adhered to. Concerning invoices from Smart Printers Limited found at page 236 of RBD, she stated that these fell under invoices to be approved by Mr. Philippe but she signed the invoices. She however stated that procurement was not under her docket and that she signed all LPO’s. Further approvals would be by purchase department and in that regard looped in Emma. The approvals by Philippe were additional. The claimant further stated that she had a limit which she did not exceed. 12. Regarding irregular payments to the Basket ball team called Tangit found at page 257-258 of RBD, she stated that the payments related to marketing and sponsorship activities and that the questions raised at pages 260-261 were about the contract – allegations that “two pairs of eyes policy” was not followed. The contract never made any provision for payment. LPO was generated by purchase department and brought to me to confirm if the same was rendered. The rest of the process was beyond her. 13. Regarding the disciplinary process she stated that she was issued with a show cause letter and that she responded to the same. She further stated that she attended the hearing and signed the minutes and that she requested for an appeal but it was not granted. She admitted that upon termination she was paid salary for April, 2020 and that leave was stated as 54 days and did not challenge the same and that bonus was paid. 14. In reexamination, she stated that her basic salary was 479,453/= and that she had a variable pay of Kshs.200,000/= and a fuel card for Kshs.30,000/= she also had airtime allowance. Concerning commission, she stated this was payable quarterly. She reiterated that she came across Human Resource Policy for the first time in court and denied ever receiving any payments from Evolve and that she never knew earlier her brother was a shareholder in Ngubao. She further did see any evidence to show Junker or Gluetex belonged to his friends. She denied making any payments to a basketball team. 15. The respondent on its part called as witness Mr. Philippe Huenerman (RW1) who stated that he was the respondents Managing Director and that he exited in 2024. He further stated that he signed a witness statement on 19th June, 2020 and that he relied on the same as his evidence in chief. He further confirmed the amended statement of response and counterclaim and relied on the bundle of documents dated 27th May, 2020 and supplementary list of documents dated 20th June, 2020 and 7th March, 2023 and produced the documents as respondent’s exhibits. 16. He stated that at paragraph 6 of his witness statement he stated that a show cause letter was issued to the claimant on 31st March, 2020. The show cause letter stated the charges, market activities, misuse of giving out stocks to retailers and making market presence. According to him, the claimant was suspected of fictitious market activities. There were allegations Henkel (the respondent) was paying for fictitious events and money shared by people responsible. 17. According to him, a regional distributor, Mr. Ogema informed him through and email at page 7 RBD of that some of the activities stated did not take place. At page 8 of RBD the invoice by Evolve was paid for events allegedly took place in 2018 yet Mr. Ogema said no activities took place in his area in 2018. 18. At paragraph IV of his witness statement, there were accusations of insubordination. According to him, the claimant was to seek his approval for any purchase order. This was communicated to the claimant through an email dated 21st May, 2019 (RN 55 – claimants’ bundle of document). The claimant did not comply with the instructions. He further stated that Henkel had authorization limits and that the Claimant had a limit of 30,000 Euros. The claimant was instructed not to use the limit without approval. It was his evidence that at paragraph 13 of his witness statement he stated that the sponsorship for female basketball team was not approved first. 19. Concerning conflict of interest involving Ngumbau, Mr. Philippe Huenerman stated that the company had no previous experience and that the claimant’s brother was a director in Ngumbau and running the company. This was not disclosed to the respondent by the claimant. He further stated that the claimant’s brother used to come to Henkel. It was his evidence that the claimant was given a chance to respond to the allegations in the Notice to show cause letter and fter the hearing the claimant was dismissed. She was informed of the right of appeal but did not appeal. 20. Regarding the counterclaim, he reconfirmed the same and that he had not seen any response to it from the claimant. The counterclaim involved payments to Evolve for activities that did not take place. The counterclaim was also about the basketball sponsorship which was done without approval. 21. In cross-examination he stated that the Claimant was employed around 2012 as Key Account Manager and was looking at primary disbursements. He was not sure who the claimant’s line manager was but confirmed that her performance was good. He further confirmed that his relationship with the claimant was cordial relationship from the start. He further confirmed that there were annual reviews and that the claimant was not reporting to him. The claimant got promoted from time to time and that she never received any warnings. 22. Concerning commission, he stated that the claimant was paid Kshs.603,468 in January, 2020 and that commissions were paid quarterly based on performance. He further stated that the respondent received email from Mr. Ogemo on the allegations against the claimant. He however stated that there was no investigation report tabled before the court. According to him, he carried out the investigations as a compliance officer. The email from Ogemo stated there were no activities in western Kenya. Activations were based on increase in demand for producers. 23. RN12 which was an email from Janes of Evolve, it talked about market activations. He further stated that Nzilani was a contractor but was not sure who Fredrick was. He further stated that he had no proof that the claimant received paybacks from Evolve. The claimant was in senior position and was expected to be knowledgeable about company policies. 24. Concerning Ngumbau and conflict of interest, he stated that the respondent had corporate policy on conflict of interest and all employees were aware of this. Ngumbau had no experience and track record and was therefore given preferential treatment. He stated the respondent received information of close nexus between Junker and the claimant and that Junker too had no track record. He however stated that he did not have proof that claimant and Judy were neighbours and friends. Concerning Account application form at page 26 of RBD, he stated that the document was authorised by the claimant and himself. 25. Regarding the disciplinary process, he stated that the claimant was interviewed by himself and respondent’s regional legal team and it was established that the claimant was involved in activities that contradicted the company’s corporate policy and that the allegations on the basketball team were made known to the claimant. Concerning the counterclaim, he stated that that there was proof that money was lost. The respondent made the payments and that the approvals were by finance department and the claimant. The claimant was the in-charge and worked with the finance department. 26. In re-examination she stated that the claimant was not dismissed on the basis of poor performance and that she had no previous warning, the allegations were serious and warning was not enough. 27. The respondent’s second witness Mr. Titus Kajume (RW2) stated among others that he recorded a witness statement on 19th June, 2020 which he relied on as his evidence in chief. He further stated that he used to work for the respondent and left in 2020. He also relied on the documents referred to in his statement (pages 21-38). 28. In cross examination he stated that he was employed in early 2015 and was reporting to the claimant. According to him, the email of 14th January, 2020 was not seeking favours he was simply stating what he was going through and that he wrote to Phillipe to express what he was going through. He admitted he was in intimate relationship with the claimant but was not a jilted lover. According to him, he was the one who ended the relationship. 29. Regarding his role while working for the respondent, he stated that he was the one heading the business. People undertaking scheduled activities were to report to him and that no one reported and he did not sign off any activity. According to him, it was true the claimant shared money however there were no written documents but he received the money. Mr. Kajume further stated he knew Ngumbau Martin and that he was the respondent’s distributor and that he knew he was respondent’s brother and further that he knew Judy was a neighbour to claimant and that he visited her many times with the claimant. 30. In re-examination he stated that fictitious payments were to Evolve and that he was in charge of all trade activities in Kenya and did not approve any activity. Further, Mr. Ogema was to be aware of all marketing activities in western because he was the respondent’s distributor in the region. **CLAIMANT’S SUBMISSION** 1. The claimant’s counsel Mr. Lusweti framed five issues for determination namely:- 1. *Whether the Claimant's termination was procedurally and substantively unfair* 2. *Whether the Claimant's constitutional rights have been violated* 3. *Whether the counterclaim and set off were proved* 4. *The Claimant’s Gross Monthly Salary* 5. *Whether the Claimant is entitled to the reliefs sought* On the issue whether the Claimant’s termination was procedurally and substantively unfair, counsel submitted that under *Section 45(2) of the Employment Act, 2007 t*he burden is on the employer to prove the reasons for termination and that they were valid, fair reasons relating to the employee's conduct, capacity, or compatibility, or based on the operational requirements of the employer and that this Honorable Court has consistently held that an employer must not only have a valid reason for terminating employment but must also follow a fair procedure and that regard relied on the case of *Mayieka v DHL Excel* *Supply Chain [KI Limited (Cause 2082 of 2016) [2022] KEELRC 12918 (KLR) and Seth Nyangweso Liaga v Metal Crowns Limited [2018] eKLR,* the court emphasized the dual requirements for a lawful termination. According to counsel, the Respondent's allegations of fictitious payment of invoices, conflict of interest, and insubordination were vehemently denied and adequately addressed by the Claimant in her response to the show because letter dated 6th April 2020. The Respondent failed to provide concrete evidence to substantiate these grave allegations during the disciplinary process or before this Court. The Alleged “Fictitious Marketing Activations” were Actually Conducted. 1. Mr. Lusweti further submitted that the Respondent alleged that payments made to Evolv Limited related to fictitious Market Impact Team (MIT) activations. This allegation was demonstrably false. The evidence demonstrated that the activations were duly requested through the retail sales function, actively planned and executed by sales teams, supported with route plans from regional representatives, and resourced with Point of Sale (POS) materials released by the marketing department. The activations were carried out in the field within the relevant period, and post activation reports were submitted in line with standard practice. These records establish that the activations were genuine and not fabricated, further confirmed by the involvement of multiple departments in planning, resourcing, and reporting, which underscored their authenticity and directly refuted the Respondent’s claim. These records clearly demonstrate that the marketing activations took place and were not fictitious as alleged by the Respondent. Further, there was no Evidence That the Claimant benefited from the payments. No documentary or financial evidence was produced demonstrating that the Claimant received any personal financial benefit from the payments in question. *In Pius Machafu Isindu v Lavington Security Guards Limited [2017] eKLR,* the Court of Appeal held that an employer must demonstrate that the reasons for dismissal are valid, fair and supported by evidence. Mere suspicion or unproven allegations could not justify termination. In the absence of such evidence, the allegation remains speculative and unsupported. 2. Counsel further submitted that the Respondent’s allegation that the Claimant approved invoices without Local Purchase Orders (LPOs) was without merit. The Claimant’s role was limited to reviewing supplier quotes and invoices as the user of services and goods, while the generation and approval of LPOs and invoices fell squarely under the procurement and finance departments. The LPOs produced by the Respondent bear the signatures of finance and purchasing officers, confirming that responsibility lay with those functions. Furthermore, the Claimant had no authority over supplier payment processing, and the Respondent has provided no proof that the Claimant had access to any payment platforms or made any payments. It was therefore evident that the Claimant could not have been responsible for any alleged irregularities in the generation of LPOs or supplier payments. 3. On the issue of conflict of interest, counsel submitted that the respondent’s allegation that the Claimant had a conflict of interest involving Ngumbau Traders was based on incomplete information. The Claimant was not involved in opening the distributor account and was unaware that her late brother held shares in the company. This shareholding only came to her attention during the Respondent’s internal audit process, at which point she immediately took steps to have the shares liquidated in order to eliminate any potential conflict. The Claimant therefore acted in good faith and in full compliance with the Respondent’s requirements once the matter came to her attention, demonstrating transparency and adherence to ethical standards. The allegation that the Claimant accorded preferential treatment to Ngumbau Traders was unsupported by evidence. The Claimant demonstrated that Ngumbau Traders was treated in the same manner as other distributors within the Respondent’s network. Credit facilities were approved by the Head of Finance, similar arrangements existed with other distributors, and sales representatives servicing Ngumbau Traders were responsible for entire regions and multiple customers. These facts confirm that no preferential treatment was extended. 4. Counsel further submitted that the Respondent further alleged that the Claimant had a conflict of interest in relation to the appointment and management of Juker International and Gluetex Builders Distributors Limited. This allegation was unfounded. In scouting for potential partners, the Claimant identified a dealer known within the hardware trade who expressed interest in investing in distribution. The supporting documentation adduced in court showed that The Respondent’s key witness and the Claimant’s direct manager, Mr. Philippe Huenermann was aware and indeed even approved the account opening form. The Respondent also questioned the granting of credit facilities to Juker International and Gluetex. It was submitted that the Claimant demonstrated that granting credit facilities was a standard commercial practice within the Respondent organization and was often part of negotiations when onboarding distributors. Several distributors within the network were granted credit facilities upon commencement of their trading relationships. Crucially, the approval of credit facilities was not within the Claimant’s sole authority. Such approvals were subject to review and authorization by the finance department in accordance with internal credit policies. The evidence showed that credit limits were recommended by the business team, processed by the credit controller, and approved by the Finance Manager. Further the Claimants direct manager, Mr. Philippe Huenermann approved Gluetex Limited’s credit limit. 5. Regarding the allegation that the Claimant was guilty of insubordination by failing to comply with instructions issued by her line manager was unfounded. The Claimant explained that the requested procurement control did not fall within the scope of her department, noting that supplier vetting, LPO generation, and procurement approvals were the responsibility of the purchasing function. This position was later acknowledged by the purchasing manager, who confirmed that approvals would be routed through the proper channels. The Claimant therefore did not refuse lawful instructions but clarified the operational limits of her role within the Respondent’s structure. 6. Regarding the legality of termination of service of the claimant, Mr. Lusweti submitted that a termination based on false allegations could not stand. The Respondent’s assertion that facts in its possession entitled it to summarily dismiss the Claimant, yet it opted for a 'normal termination', was a clear indication that the alleged reasons were not sufficiently established. The Court in *Mathew Kipkemboi Kitai v Postal Corporation of Kenya [20161KEHC 4065 (KLR)* affirmed the need for an employer to prove the validity and fairness of the reasons for dismissal. According to counsel, *Section 41 of the Employment Act, 2007,* outlines the mandatory procedure for termination, requiring notice, explanation, and a hearing. While the Claimant was issued a show cause letter and attended a hearing, the process was a mere formality designed to rubber-stamp a pre-determined outcome. The disciplinary panel failed to genuinely consider the Claimant’s detailed response and explanation. The requirement for fair procedure is not merely a technicality but a fundamental aspect of natural justice. Counsel relied on the case of *Jane Frances Ominde Munyakoh v. Imaging Solutions Limited [20131 KEELRC 438 (KLR)* where the court highlighted that an employee must be afforded a fair hearing and given an opportunity to present their case effectively. The Respondent's process, culminating in summary dismissal demonstrated lack of adherence to these principles. 7. Counsel further contended that the Claimant's termination was not carried out in compliance with the Respondents’ Policy protocols. Under the Policy protocols , a first and second warning must be given before being fired, according to Respondent’s policy. No written or verbal warning was ever given to the claimant prior to her summary dismissal and the respondents witnesses confirmed this during trial. Further, the Claimant submitted that her rights under Article 41 (2) (a) and (b) of the Constitution, guaranteeing fair labour practices and reasonable working conditions, were violated. The unfair dismissal and the unsubstantiated allegations against her constituted an egregious breach of these fundamental rights. Furthermore, the Respondent's actions infringed upon the Claimant's right to be treated with dignity as provided under Article 28 of the Constitution. The manner of dismissal, coupled with the defamatory allegations, caused immense reputational damage and emotional distress, thus violating her dignity. 8. Regarding the counterclaim, the respondent filed a counterclaim and set off seeking **Kshs, 9,220,159.72 and USD 1625.64 on 8th June,2022** three years after the filing of this suit. The respondent alleges that the claimant made fictitious and irregular payments. It was the Claimant’s submission that the Respondent had wholly failed to prove the said counterclaim and set-off. Firstly, it was a settled principle of law that the burden of proving a counterclaim rest with the party asserting it. The Respondent therefore bore the obligation to place before the Honourable Court clear and credible evidence showing that the alleged loss arose from the Claimant’s actions and that actual financial loss was suffered as a result. The Respondent failed to discharge this burden. During the hearing of this matter, the Respondent failed to produce any documentary or oral evidence linking the Claimant to the alleged fictitious or irregular payments. In particular, the Respondent did not produce any supplier confirmations, delivery notes, audit reports, financial reconciliations, or other accounting records demonstrating that the payments in question were fictitious. In the absence of such documentary proof, the allegations remain mere assertions unsupported by evidence. 9. Regarding the gross monthly salary, counsel submitted that the Respondent disputed the Claimant’s gross monthly salary by excluding certain components of the Claimant’s remuneration, most notably the commissions earned in the course of employment and the fuel benefit provided to the Claimant. It was the Claimant’s submission that the Respondent’s position did not accurately reflect the true structure of the Claimant’s remuneration. The Claimant’s remuneration package comprised both fixed monetary allowances and a variable commission component arising from her role as Divisional Manager responsible for sales performance. The Claimant’s fixed monthly earnings comprised the following: **Basic Salary -** Kshs. 479,453 **Car Allowance**-Kshs. 100,000 **Airtime Allowance -** Kshs. 5,000 **Fuel Allowance** through a Total Bon Voyage Fuel Card - Kshs. 30,000 monthly limit. The fuel card was a company-provided monthly benefit issued to facilitate the Claimant’s execution of her duties which involved frequent travel for sales supervision and distributor management. The card carried a consistent monthly limit of Kshs. 30,000, and therefore constituted a regular employment benefit forming part of the Claimant’s monthly remuneration package. Further, the Claimant was issued with a corporate postpaid mobile phone line whose monthly bills were settled directly by the respondent with Safaricom. The nature of the Claimant’s role required frequent communication with distributors, customers and internal teams across regions. As a result, the claimant’s monthly phone bills averaged Kshs 45,000 which was consistently settled by the respondent. 1. It was further submitted that in addition to the above fixed components, the Claimant earned sales commissions arising directly from her role in driving sales performance for the Respondent’s business. The Sales commissions were paid quarterly as per evidence produced in court. The Claimant’s commissions averaged approximately Kshs. 203,000 per month during her tenure as Divisional Manager. These commissions were not discretionary or occasional bonuses but were a structured and regular component of the Claimant’s compensation, tied to the performance expectations of her role. As a sales manager, the Claimant’s remuneration structure therefore consisted of both fixed salary components and a variable performance-based component, which together constituted the Claimant’s total earnings. 2. Counsel further submitted that where commissions and employment allowances form a regular component of an employee’s remuneration, courts have consistently recognized that such payments form part of the employee’s gross earnings for purposes of determining remedies following unlawful termination. ln *Parliamentary Service Commission v Salaries and Remuneration Commission [2025] KECA 275 (KLR):* The Court of Appeal emphasized that allowances and benefits are integral to remuneration and cannot be excluded when determining gross pay. 3. In conclusion counsel submitted that given the unfair and unlawful termination, the Claimant was entitled to remedies as provided for under **Section 49 of the Employment Act, 2007.** While reinstatement was initially sought, the effluxion of time and the adversarial nature of the proceedings may render it impracticable. However, the Claimant was entitled to compensation for unfair termination. In *Ken freight (E.A) Limited v Benson K. Nquti SC Pet. No. 37 of 2018 [20191 eKLR* this Court explained the applicability of the provisions of Section 49 as hereunder; *" What then should be the correct award on damages be based on? Having keenly* *perused the provisions of Section 49 of the Employment Act, we have no doubt that once a trial court finds that a termination of employment as wrongful or unfair, it is only left with one question to determine, namely, what is the appropriate remedy? The Act does provide for a number of remedies for unlawful or wrongful termination under Section 49 and it is up to the judge to exercise his discretion to determine whether to allow any or all of the remedies provided thereunder. To us, it does not matter how the termination was done, provided the same was challenged in a Court of law, and where a Court found the same to be unfair or wrongful, Section 49 applies....”* The out-of-court settlement for breach of contract (Kshs. 150,000,000/=) and damages for defamation (Kshs. 40,000,000/=) attests to the severity of the Respondent's conduct. The Claimant still seeks the remaining special damages. In addition counsel therefore sought payment of one month’s salary in lieu of notice - Kshs. 832,053/=, unpaid leave for each full year worked - Kshs. 14,976,954/=. Additionally, the Claimant was entitled to general damages for the distress, humiliation, and loss of career progression occasioned by the unfair dismissal and the violation of her constitutional rights. The substantial nature of the settled claims further supports the Claimant's entitlement to significant general damages. We rely in the decision of the Court in *Samson Kipkoech Chemai vs. Richard Erskine Leaky & 2 others (2017) eKLR* where Justice Nduma Nderi stated as follows; *‘‘However, if the court finds that the contract of service was curtailed unlawfully as it was in the present case, then the employee is entitled to general damages...”* **RESPONDENT’S SUBMISSIONS** 1. Counsel for the respondent Ms. Kashindi, submitted that Section 47 (5) of the Employment Act provided that any complaint of unfair termination of employment or wrongful dismissal, the burden of proving that an unfair termination of employment or wrongful dismissal has occurred shall rest on the employee, while the burden of justifying the grounds for the termination of employment or wrongful dismissal shall rest on the employer. Contrary to the Claimant's submissions at paragraph 1 that alleges that the employer bears the burden of proof in termination of employment cases, the employee bears the initial burden of proof in claims of unfair termination. Only when a *prima facie* case is established does the employer need to justify the termination. In, ***Professional Clean Care v Fondo (Appeal E068 of 2024) [2026] KEELRC 167 (KLR) (29 January 2026) (Judgment***), the court held that *“As a general rule, the employee bears the burden of proof that employment was terminated unfairly. under Section 47(5) of the Act, the employee bears the initial burden of proof in claims of unfair termination. Only when a prima facie case is established does the employer need to \_ justify the termination of employment.”* **See also *Rupra Construction Company Limited v Makomere [2025] KEELRC 1376 (KLR)*** and ***Gitonga v Karanja Njenga Advocates (Employment and Labour Relations Cause E625 of 2021) [2025] KEELRC*** 1. According to counsel, the Claimant has failed to establish a *prima facie* case as set out in detail below for the burden to shift to the Respondent. The standard of proof required of the Respondent in order to establish that the reasons for termination were valid was that of a balance of probabilities as was held in the case of ***Josephat Munyao Kovulo v Teachers Service Commission [2019] eKLR*** and the Court of Appeal in ***Kenya Revenue Authority V Reuwel Waithaka Gitahi & 2 Others [2019] eKLR*** as follows: - *“The standard of proof is on a balance of probability, not beyond reasonable doubt, and all the employer is required to , prove are the reasons that it “genuinely believed to exist,” causing it to terminate the employee's services. That is a partly subjective test. ”* Counsel further relied on the case of ***Lawrence Nyamichaba Ondari v National Hospital Insurance Fund [2018] KEELRC 1023 (KLR)*** where Abuodha J held that it was not for the court to audit the truth of reasons for termination of employment. All the court needs to ensure is that the reason put forward for dismissal or termination **are reasons which the employer reasonably believed to exist** and are reasons for which a reasonable employer would terminate the services of an employee. The Court of Appeal recently affirmed the foregoing holding on appeal in the case of ***Ondari v National Hospital Insurance Fund [2025] KECA 687 (KLR)*** and stated that :- *“In several of its decisions, this Court has held that it has no supervisory role and is not required to substitute the thoughts of an employer, where the employer has a valid reason to terminate employment and where due process has been followed.* According *to counsel,* the Respondent established that there were two suspected fictitious payments for alleged marketing activities/activations invoiced by Evolv Ltd in 2017 and 2018. The Claimant, in her capacity as the head of consumer adhesives, approved payment of two invoices from Evolv Ltd for Market Impact Team activities allegedly conducted in 2017 and 2018. Invoice 077 was for Kshs. 954,851.32. Invoice 106 was for Kshs. 1,075,305 The Claimant approved invoices without Local Purchase Orders issued prior to payment and without Electronic Tax Register receipts despite knowing that the alleged marketing activities in the two invoices did not take place. These approvals were against the standard procedures of the Respondent for approval of invoices. 1. Ms. Kashindi further submitted that while the Claimant alleged during hearing that the marketing activities were postponed from March 2018 to June 2018***,*** the Respondent did not find any evidence to support this allegation. The Claimant also alleged that the activities took place in June 2018. Mr. Ogema, the Respondent's Regional Distributor in the Western region where the activities were alleged to have taken place, confirmed that the marketing activities did not take place in 2018 as invoiced. In any event if the activities were postponed as alleged, the Claimant did not give an explanation for the hasty advance payment of the invoices. The activities that the Claimant alleged were postponed to June 2018 were paid for in April 2018. This led the Respondent to believe that there was impropriety in the payments in question doubled with the fact that the official distributor for the western region confirmed that no such marketing activities had taken place. Further during the hearing, the Claimant alleged that she had no role in the payments and that the payments were made by the finance team. The Claimant, however, admitted that she signed the invoice for Evolv Limited as the requestor and that by signing the invoice she was confirming to the finance team that the marketing activations had been concluded. A fact she knew was not correct. She confirmed that LPOs are written by the purchasing manager or someone in the department. Her responsibility was to confirm whether the services requested were delivered, which she did by signing the invoices. She also confirmed that the invoices and the Local Purchase Orders related to marketing activations within her department. 2. Regarding insubordination, counsel submitted that this was a valid ground for termination pursuant to **Section 44(4) (e)** of the **Employment Act** which stipulated that willful disobedience of lawful commands constituted gross misconduct. The Claimant disregarded explicit instructions from her line manager requiring approval for procurement and marketing expenditures. In early 2019, the Respondent learnt that certain staff members appeared to have been involved in receiving monies personally on the pretext that they were meant for sponsorship of a basketball team. The Respondent carried out investigations which led to the institution of disciplinary action against a former employee who exited the Company after the disciplinary process. The Claimant was suspected to have been implicated in the irregular sponsorship of the basketball team and particularly due to her involvement in the signing of a contract between Henkel and the basketball *team.* The contract was irregular in that; it was signed by the Claimant who, alone, had no signing authority for the Respondent; it had no **“two pairs of eyes**” as required by the Respondent's standards. Further, the contract was not vetted by Henkel's legal department and no payments ought to have been made. The contract was not transparently shared with Henkel and was not uploaded into the global sponsorship database and the Contract did not give the amount payable by Henkel to the basketball team. 3. According to Counsel, these irregularities were made known to the Claimant to which Claimant acknowledged the loopholes in the Sponsorship of the Basketball Team. Following this incident, the Respondent's then Managing Director and the Claimant's line manager, Mr. Philippe Huenermann**,** wrote to the Claimant vide an email of 31st May 2019 instructing her obtain approvals from him for any purchase order relating to promotion activities, advertising materials, events, sponsorships etc. The Claimant acknowledged the instruction and confirmed that it was *“noted and will be adhered to”.* Despite this, the Claimant approved several purchase orders thereafter without the authorization of her line manager. Some of the purchase orders that the Claimant approved and for which goods were procured without prior authorization from Mr. Philippe. The Claimant admitted during hearing that she did not loop in Mr. Philippe for these Purchase Orders that were signed post 31st May 1019 because the Purchase Orders were within her docket and as such, she did not need any permission or approval to sign the Purchase Orders. She had also submitted at paragraph 12 of her submissions that the LPOs were within her operational limits and as such required no approvals. This was a blatant admission of insubordination of express instruction that she had confirmed to her line manager she would adhere to. This was against the Claimant's own contractual terms of employment. 4. Counsel further submitted that although the Claimant was within her authorization limit of 30,000 Euros under the Respondent's Corporate Standard on Commitment Authorization, she had been given express instructions by her line manager. This was in view of past incidents at the Respondent including the sponsorship of the basketball team mentioned above. In ***Judicial Service Commission v Shollei & another (Civil Appeal 50 of 2014) [2014] KECA 334 (KLR) (19 September 2014) (Judgment),*** the Court of Appeal held that *“The modern law on the meaning and consequence of insubordination has ancient antecedents and has always had willful disobedience at its heart. In* ***Laws-Vs- London Chronicle Ltd [1959] 1 Wlr690,*** *Lord Evershed M.R. put it thus;* *“It is generally true that willful disobedience of an order will justify summary dismissal, since willful disobedience of a lawful and reasonable order shows a disregard - a complete disregard - of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master, and that unless he does so the relationship is, so to speak, struck at fundamentally”* The Claimant's actions post the instruction issued to her on 31st May 2019, amounted to willful disobedience of instructions. The Claimant's conduct was a deliberate disregard of authority, particularly in a context where financial controls had been tightened due to prior irregularities. 1. Regarding conflict of interest, Ms. Kashindi submitted that clause 5.3.2 of the Respondent's HR Manual requires employees to disclose and report a conflict of interest failing which such serious fault shall be actionable under the disciplinary procedure. The Claimant's contract also required her to be honest in her dealings with the Company, its customers or its supplies. Further clause 2.7 of the HR Manual gave an example of conflict of interest to include the “business relationships with a company in which the employee, a relative or a friend of an employee has a direct or indirect stake in the form of a significant shareholding. Counsel therefore submitted that the Claimant was conflicted with two suppliers of the Respondent in that Ngumbau Five Star Co. Ltd (Ngumbau Traders) traded with Henkel from its inception in 2013. The Claimant's brother, Martin Muema (deceased), was a principal shareholder in the company. This was two years after the Claimant was employed at the Respondent in 2011. The Respondent only became aware of this relationship in 2020, despite having traded with Ngumbau Traders for seven years during which the Claimant did not declare the conflict of interest. During the hearing of the Claimant's case, she alleged that she was not aware of her brother's involvement with Ngumbau Traders until the time of his demise. She also claimed that she did not know the office location of Ngumbau Traders and that her brother would visit the Respondent as one of the Respondent's distributors. She however admitted that all distributors fell under her docket. 2. According to counsel, contrary to the Claimant's allegations and submissions that she did not know of her brother's, Martin Muema, shareholding in Ngumbaru Traders, Titus Kajume, the then Head of Trade and Marketing in East Africa at the Respondent who reported to the Claimant, confirmed that he knew Martin Muema as the Claimant's brother when he joined the Respondent in 2015. He stated that he knew this from the various visits to Ngumbau Traders that he attended with the Claimant. In fact, it was the Claimant who introduced Martin Muema to him as her brother sometime in 2015. Titus also confirmed that Martin Muema visited the Respondent on several occasions as a distributor under the umbrella of Ngumbau Traders. It is therefore implausible for the Claimant to allege that she only became aware of her brother's involvement with Ngumbau Traders in 2019 upon his demise. Concerning Juker International (Juker), Counsel submitted, it was one of the distributors of the Respondent. The directors of Juker were Judy Mwangi and Esther Kerubo. The company began trading with Henkel in 2014, shortly after its incorporation. Juker was appointed a regional distributor yet it had no known established experience and capability having been established solely and exclusively to trade with the Respondent. Juker ran into financial difficulties and ceased trading with Henkel in 2018 but still owed Henkel some amount of money. There was no significant effort by the Claimant to collect the outstanding amount from Juker after they stopped dealing with Henkel yet distributors were under her docket as she admitted during hearing. Judy Mwangi who was one of the directors of the company was a close friend of the Claimant and also a neighbor in Embakasi Estate. During re-examination, Titus Kajume confirmed that he, together with the Claimant, visited Judy Mwangi at her home and warehouse on several occasions. He knew that the Claimant and Judy Mwangi were close friends and were once neighbours in Embakasi Estate. 3. Counsel therefore submitted that failure to disclose these conflicts of interest was against the Respondent's HR policy manual and Code of Conduct as well as the Claimant's contractual obligations. This Court in ***Mark T. Mwangi v Gateway Insurance Company Limited [2013] eKLR*** held that the employer was justified in summarily dismissing an employee for breach of the employer's policies procedures and in making this finding stated that: *An officer, senior as the claimant was as a Branch manager, had the senior responsibility to undertake his duties to the best interests of his employer at all times. The act of taking a vehicle cover for purposes of having his private vehicle pass the inspection process and then return the same cover, was in itself gross misconduct and an act unbecoming of a senior employee who should act more responsibly. He should not have done that as this act was contrary to the provisions of section 44 of the Employment Act, despite the fact he had no supervisor over him at the branch. He should have conducted himself in a responsible manner this notwithstanding. That is why he had been given the responsibility of being branch manager by the respondent as an officer who could be trusted with their, property, business and assets, but he chose to use these \_ for his own private purposes. If the audit had not been conducted, this conduct would have gone on unabated as the claimant did not see anything wrong with it. He could simply take cover for his vehicles; use them to a short purpose and then return. Even though he was committing criminal acts and was never arrested as he suggested in his evidence, this was a perfect ground for summary dismissal. In the final analysis, therefore, the outcome on the evidence presented is that the conditions precedent to the lawful exercise of the power of summary dismissal - a p prima \_ facie of serious misconduct - was indeed \_ fulfilled.* 1. Concerning the disciplinary process, counsel submitted that the Respondent, in line with its Human Resource Management Policy, commenced inquiries into the suspected misconduct by the Claimant on the above grounds. This followed information received from a whistleblower regarding the above-mentioned misconduct and by a letter dated 31st March 2020, the Respondent invited the Claimant to show cause why disciplinary action should not be taken against her for misconduct. The letter particularized in detail the allegations of misconduct, including suspected fictitious payments relating to Invoice No. 077 dated 6th November 2017, Invoice No. 106 dated 10th March 2018 (erroneously indicated as 2017), conflict of interest concerns relating to Ngumbau Traders and Juker/Gluetex, and acts of insubordination relating to purchase orders issued between 23rd September 2019 and 23rd January 2020. The Claimant was asked to submit her written submissions/response to the allegations raised against her by 6th April 2020. The Claimant exercised her right to respond. On 6th April 2020, she submitted a written response dated 3rd April 2020 addressing the allegations raised in the show cause letter. She denied all the allegations raised against her. 2. Further, contrary to the Claimant's submissions at paragraph 18 regarding the provision of the investigation report, the Show Cause letter was exhaustive of all the material particulars upon which the Claimant was required to respond, and she did in fact respond comprehensively to the allegations. The Claimant did not request any additional documents either upon receipt of the Show Cause letter or at any time prior to or at the disciplinary hearing. In this regard, counsel submitted that the decision in ***Malombe v Cooper K-Brands Limited (Cause 2483 of 2017) (2022) KEELRC 12754 (KLR) (6th October 2022)*,** relied upon by the Claimant, was distinguishable on its facts. In that case, the claimant had specifically requested for particulars which were not furnished. According to Ms. Kashindi, there was no requirement to provide an investigation report where sufficient detail is already given. In ***Ndinda v Ethics and Anti-Corruption Commission (Constitutional Petition E209 of2021) [2025] KEELRC 3181 (KLR) (13 November 2025) (Judgment),*** the court held that: *“The petitioner complained about not being provided with the investigation report and documents but the court wonders which documents the petitioner needed in addition to a matter she interacted with as counsel and recorded a consent which she did not deny..Not in all cases where an employee accuses the employer of unfair termination, documents must be provided even those within the knowledge of the employee and with which they have more than once interacted with in the course of employment. ”* 1. The disciplinary hearing was convened on 7th April 2020. The Claimant attended and was accorded an opportunity to make oral representations in addition to her written response. Minutes of the meeting were recorded and later signed by the Claimant on 14th April 2020, confirming both her attendance and participation. The Respondent, subsequently, by an email of 23rd April 2020, informed the Claimant of an avenue for appeal against her dismissal. The Claimant by email of 23rd April 2020 responded to the Respondent's email of even date asserting that she would not appeal against her dismissal on the basis that the procedure ought to have been outlined in her summary dismissal letter. This was an additional safeguard for the Claimant to which she willingly declined to pursue. 2. Concerning Mr. Philippe Hunerman participation in the disciplinary committee, Counsel submitted that he participated as the compliance officer of the Respondent and that the decision maker during the disciplinary hearing was Ranjan Das. It was also material to note that at no point during the disciplinary proceedings did the Claimant object to the composition of the disciplinary panel and furher that the law does not prescribe who should sit in an employer's disciplinary tribunal nor does it dictate who within an employer's structure must sign a termination letter. A member of the disciplinary committee or any authorized person is competent to sign the letter communicating outcome of the disciplinary hearing. Whoever signs a summary dismissal letter is immaterial and does not go to the root of the decision of the disciplinary tribunal. 3. Regarding mode of termination of employment by an employer, counsel submitted that it can either be by notice or summary dismissal and that the employer retains the discretion to impose disciplinary measures proportionate to the gravity of the misconduct. The Respondent acted within its managerial prerogative in determining the appropriate sanction based on the Claimant's conduct. The legal effect of termination either by notice or summary dismissal is cessation of the employment relationship. The Claimant's actions amounted to gross misconduct within the meaning of section 44 of the Employment Act 2007 justifying summary dismissal without notice. Contrary to the Claimant's submissions at paragraph 13 asserting that her employment was terminated through ‘normal termination', the Claimant was summarily dismissed from employment on the ground of gross misconduct. 4. Regarding the claimant’s monthly emoluments, counsel submitted that the alleged monthly salary as submitted by the Claimant in paragraph 32 of the Claimant's submissions was heinously exaggerated. By a letter dated 11th December 2019, the Claimant was promoted to the position of the Division Manager AC - East Africa at grade MC3a. Her basic salary was increased from KES 416, 915/- to KES 479, 453/-. She was also informed that she would get additional benefits applied as per her new job grade. The benefits attached to the new grade were car allowance of Kshs. 100,000 and Airtime allowance of Kshs. 5,000. The Claimant was also entitled to sales commission which was dependent on the performance of her department. This is evident from January 2020 pay slip which has additional pay of sales commission. Sales commission arises only after confirmed sales and the same fluctuates across periods. Sales Commission cannot be predictable and averaged to be paid on monthly basis not as alleged at paragraphs 31 of the Claimant's submission. 5. In ***Postal Corporation of Kenya v Tanui (Civil Appeal 127 of 2015) [2019] KECA 489 (KLR) (19 July 2019) (Judgment)***, the Court of Appeal pronounced itself on benefits being computed as part of gross pay as below: *In common parlance, basic salary is the base income of an individual, the fixed part of one's compensation package; while an allowance is the amount received by the employee for meeting service requirements. It is provided in addition to the basic salary and varies from employer to employer. Some employers may well offer allowances that are clearly predicated on actual performance of the contract but which do not \_ form part of the gross salary of an employee.* 1. Counsel therefore submitted that contrary to the allegations in paragraphs 30 and 31 of the Claimant's submissions, the Claimant did not receive any benefit of fuel allowance Kshs. 30,000 monthly nor postpaid corporate mobile phone benefit of Kshs. 45,000 monthly. In ***Richard Erskine Leakey & 2 others v Samson Kipkoech Chemai [2019]KECA 700 (KLR),*** the court of Appeal affirmed the decision in ***Pravin Bowry v Ethics & Anti-Corruption Commission [2013] eKLR*** wherein the court stated that:- *“…there are certain allowances that are dependent on actual performance of the contract of employment and should not be taken into account when computing gross salary of an employee in cases of unfair or wrongful termination of employment. Some of the enlisted allowances were ‘the claim for telephone allowance; provision of security guards; provision of fuel; cost of medical premium and annual insurance; amounts due for outpatient and medicines; amount in lieu of leave; proportionate AAR premiums for Claimant's wife; cost of AAR cover for the unspent term of contract are all dismissed for the reason that these allowances are predicated on actual performance of the contract and not otherwise in the court's view…'.* The court further held that; *“In our view, there are certain allowances that are dependent on actual performance of the contract of employment. When calculating damages due to an employee in the event of unfair or wrongful termination, it is only the emoluments or gross salary of “The only issue left is whether in terminating the petitioner's service, the respondent discriminated or violated any of her rights and fundamental freedoms. Employment Act and employment law generally permits termination of employment contract by any party to it for valid reasons. Employment is not servitude. The Act further adequately provides for available remedies including quantum of compensation payable in the event of a successful claim for unfair termination of the contract. The court is therefore reluctant to rush into looking at ordinary termination of employment from a constitutional lense. There ought to exist egregious and outrageous reasons and or process of termination that no reasonable employer would embark on for the matter to mutate into a claim for breach of rights and fundamental freedoms.* *In this regard, the Court finds and holds that the allegations by the petitioner of breach of her rights and fundamental freedoms is unproved and unmerited.”* *the employee that should be taken into account, not allowances and privileges dependent on actual service and performance of the contract.”* 1. Concerning breach of constitutional rights, counsel submitted that in ***Anarita Karimi Njeri-vs- Attorney General[1979]KLR* 154,** the court held that where a person seeks redress from the court in a matter involving the Constitution, they must set out, with a reasonable degree of precision, the nature of the complaint, the specific provision alleged to have been infringed, and the manner in which it is said to have been violated. Further, in ***Ndinda v Ethics and Anti-Corruption Commission (Constitutional Petition E209 of 2021) [2025] KEELRC 3181 (KLR) (13 November 2025) (Judgment)*** this court (Abuodha, J) in dismissing claim for violation of rights and fundamental freedoms held that: 2. Ms. Kashindi therefore submitted that from the foregoing and in absence of evidence on the alleged violation of Constitutional rights, the Claimant was not entitled to grant of declaration for unfair labour practices and a reasonable working condition under Article 41(2)(a) and (2)(b) of the Constitution. Section 49 of the Employment prescribed lawful remedies in cases of proof of unfair termination of employment to be payment in lieu of notice, outstanding wages and compensation not exceeding twelve months based on the gross monthly wage or salary of the employee at the time of dismissal. The Claimant was summarily dismissed from employment and is therefore not entitled to salary in lieu. 3. Further, the Claimant was paid her salary up to 16th April 2020 which was her last day of work. The Claimant confirmed during cross-examination that this was paid and indicated that she had abandoned the prayer for unpaid salary for the month of April 2020. There was therefore absolutely no basis for the claim of Kshs. 14,976,954 or any part thereof on account of alleged accrued leave. The Claimant was duly paid her bonus and commissions during the period of her employment. The Claimant confirmed during cross-examination that her bonus had been paid. 4. Concerning the claim for alleged breach of contract in the sum of Kshs 150,000, 000 or any part thereof, it was submitted it was without basis. The Claimant had not demonstrated how her contract was breached to warrant the grant of this prayer. There was no detail in her statement of claim and neither did she lead any evidence to support this relief. Section 44 of the Employment Act allowed for summarily dismissal of an employee on the grounds of gross misconduct. The Respondent had justified reasons to summarily dismiss the Claimant. Regarding claim on defamation, it was submitted that the Claimant was not entitled to damages for defamation. She had not pleaded or proved the essential elements of defamation such as a false and defamatory statement, publication to a third party, reference to the Claimant, and actual reputational harm. Communications arising from an employment-related proceedings are protected by qualified privilege and cannot be deemed defamatory. In ***Miguna v Standard Group Limited & 4 others [2017] eKLR*** the court held that the burden of proving a defamatory matter was on the claimant. Further in ***Phineas Nyagah v Gitobu Imanyara [2013] eKLR***, the court reaffirmed that even where a party feels aggrieved, the law on defamation requires strict proof of each element. No such proof has been offered here. The disciplinary action was anchored on gross misconduct which the Claimant was fully aware of and participated in, and therefore could not purport to claim reputational damage. Her assertion of injury to reputation was speculative and unsubstantiated. In ***William Kiaritha Gacheru v East African Packaging Industries Ltd [2016] KEELRC 1633 (KLR)*** the court held that: *“Suffice is to say that this was a management discretion in handling a workplace issue and could not be reasonably said to have injured or lowered the reputation of the senior managers including the claimant who were selected for the testing on account of their position of responsibility in the company vis-a-vis the alleged theft.”* 1. Concerning the counterclaim and set off, it was submitted that the Respondent sought from the Claimant; a reimbursement of the sum of Kshs. 9,220, 159.72 and USD 1652.64 being the total loss suffered due to the Claimant's gross misconduct including fictitious payment for market activations, irregular sponsorship contract and insubordination. Contrary to the Claimant's submissions at paragraph 23, the Respondent adduced evidence on the grounds of the counterclaim and set-off which were and substantial mirrored those relied upon in support of the summary dismissal. 2. Further, the Claimant, in her capacity as the head of consumer adhesives, approved payment of two invoices from Evolv Ltd for Market Impact Team activities allegedly conducted in 2017 and 2018. Invoice 077 was for Kshs. 954,851.32. Invoice 106 was for Kshs. 1,075,305.The Claimant approved invoices without Local Purchase Orders issued prior to payment and without Electronic Tax Register receipts. Despite knowing that the alleged marketing activities in the two invoices did not take place. These approvals were against the standard procedures of the Respondent for approval of invoices. Contrary to the Claimant's submissions at paragraph 24 that the none of the Respondent's witnesses adduced evidence that the Claimant benefitted from the fictitious payments, the Respondent's witness, Titus Kajume, at paragraph 10 of his witness statement noted that no alleged marketing activities took place, instead the money paid out by the Respondent was paid back to her. On 5th September 2018 the Claimant advised that payment of Kshs.76,000/= for Masaku Sparks Women Basketball Team could be made in cash in violation of Clause 2.6 of the Henkel Global's Corporate Standards for Donations, Memberships and Sponsorships which on the same date the Respondent's Managing Director, Mr. Philippe Hunermann, had asked the Claimant to ensure its compliance. Payments for invoices Nos. 6 (Kshs. 232,000/=) and 8 (Kshs. 1,392,000/=) paid to Sports Connect Ltd (Africa) were authorized by the Claimant without the approval of the business concerned, in violation of the established procedures of the Respondent as well as Clause 5 of Henkel Global's Corporate Standards for Donations, Membership and Sponsorships. Invoice No. 8 (Kshs. 1,392,000/=) was authorized by the Claimant and paid without ETR Receipts contrary to established practice as well as Clause 5.5 of the Corporate Standards for Donations, Memberships and Sponsorships which provide that *‘Contractually agreed contributions made within the context of sponsorship activities may only be disbursed on the basis of proper invoices issued by the rightful recipient, in particular in accordance with the applicable tax regulations. Where applicable, advance payments by Henkel shall be avoided'* 3. Counsel therefore submitted that the Respondent had on a balance of probabilities proved its counter claim against the Claimant, and therefore urge the Honourable Court to enter judgment in the Respondent's favor in terms of the counter claim. The Respondent suffered substantial financial loss as a direct consequence of the Claimant's conduct which formed the grounds for her summary dismissal from employment. The counterclaim is not a distinct cause of action but an integral and contemporaneous consequence of the same conduct underlying the summary dismissal of the Claimant. Counsel further submitted that without prejudice to the averments made above, in the event that the court awards any damages to the Claimant (which are not due for reasons detailed above), the Respondent sought a set-off of **Kshs. 9,220, 159.72** and **USD 1652.64/=** being the total loss suffered by the Respondent due to the Claimant's gross misconduct including fictitious payment for market activations, irregular sponsorship contract and insubordination as detailed above. **DETERMINATION** 1. The Court has carefully considered the elaborate pleadings and detailed submission for which the court is truly grateful to counsel for their insightful and persuasive nature. However, in order to determine the dispute herein, the court flags out three main issues: - 1. Whether there existed justifiable reasons for terminating the claimant’s service by the respondent. If not, is the respondent liable to compensate the claimant for unfair termination and consequential remedies? 2. In terminating the claimant’s service, did the respondent violate her constitutional rights and defamed her in the process? 3. Is the respondent entitled to the judgment on the counterclaim and or set-off? 2. On the question whether there existed justifiable reasons for terminating the claimant’s service by the respondent. It is noted that as per the termination letter dated 16th April, 2024 the claimant was terminated on three main grounds the details of which are contained in the termination letter and extensively covered in the pleadings and submissions. These were: - 1. Fictitious payments to Evolv Limited with respect to alleged Market Impact Teams. 2. Conflict of interest with respect to Ngumbau Five Star Co. Limited (Ngumbau Traders) and Junker International 3. Insubordination and disobeying lawful instructions in that she failed to abide with an instruction issued by her line manager on numerous occasions. 3. The Claimant disputed these grounds and consequently sought the Court’s intervention in declaring the termination unlawful and unfair and that the court do order the respondent to compensate her as detailed in her statement of claim. With respect to fictitious payments, it was the claimant’s position that these allegations were not true and that she provided reports that showed they were sales promotion activities as shown at page 215 of RBD and further that her department was audited during her tenure and that there was both internal and external audit and there were no adverse findings. In her defence to these allegations, Mr. Lusweti submitted that evidence demonstrated that the activations were duly requested through the retail sales function, actively planned and executed by sales teams, supported with route plans from regional representatives, and resourced with Point of Sale (POS) materials released by the marketing department. The activations were carried out in the field within the relevant period, and post activation reports were submitted in line with standard practice. These records established that the activations were genuine and not fabricated and further were confirmed by the involvement of multiple departments in planning, resourcing, and reporting, which underscored their authenticity and directly refuted the Respondent’s claim. According to counsel, these records clearly demonstrated that the marketing activations took place and were not fictitious as alleged by the Respondent and further that there was no evidence that the claimant benefited from the payments. No documentary or financial evidence was produced demonstrating that the Claimant received any personal financial benefit from the payments in question. The claimant further contended that the Claimant’s role was limited to reviewing supplier quotes and invoices as the user of services and goods, while the generation and approval of LPOs and invoices fell squarely under the procurement and finance departments. The LPOs produced by the Respondent bear the signatures of finance and purchasing officers, confirming that responsibility lay with those functions. Furthermore, the Claimant had no authority over supplier payment processing, and the Respondent had provided no proof that the Claimant had access to any payment platforms or made any payments. 4. The respondent’s accusations against the claimant in respect to the alleged fictititious payments were anchored on among others that a regional distributor, Mr. Ogema informed Mr. Philippe Huenermann through and email at page 7 of RBD that some of the activities stated did not take place and at page 8 of RBD the invoice by Evolve was paid for events allegedly took place in 2018 yet Mr. Ogema said no activities took place in his area in 2018. Ms. Kashindi submitted that the Claimant, in her capacity as the head of consumer adhesives, approved payment of two invoices from Evolv Ltd for Market Impact Team activities allegedly conducted in 2017 and 2018. Invoice 077 was for Kshs. 954,851.32. Invoice 106 was for Kshs. 1,075,305. The Claimant approved invoices without Local Purchase Orders issued prior to payment and without Electronic Tax Register receipts despite knowing that the alleged marketing activities in the two invoices did not take place. These approvals were against the standard procedures of the Respondent for approval of invoices. 5. From the foregoing, the court notes that the allegation of payment for activities that were alleged not to have taken place was a serious allegation that would obviously support a summary dismissal however the court is concerned that despite the seriousness of the allegations, the respondent did not provide sufficient evidence to rebut the defence raised by the claimant that her role was limited to reviewing supplier quotes and invoices as the user of services and goods, while the generation and approval of LPOs and invoices fell squarely under the procurement and finance departments and that the LPOs produced by the Respondent bore the signatures of finance and purchasing officers, confirming that responsibility lay with those functions. Furthermore, she had no authority over supplier payment processing. 6. The defences raised by the claimant made it incumbent upon the respondent to provide and lead evidence from the finance department to rebut the claimant’s defence. Besides, it is the court’s view that the email by Mr. Ogema was not sufficient proof that the alleged activities did not take place. It was necessary to call Mr. Ogema as a witness and give the claimant the benefit of cross-examining him since it would appear that the respondent heavily relied on his email to support the allegation that the events that the claimant allegedly approved for payment did not take place hence fictitious. It is further curious to note that Mr. Ogema’s email makes reference to Emco Traders and no reference or connection was established through evidence or witness statement of the connection between Emco Traders and Evolv. Without more therefore the court finds and holds that this ground for summary dismissal was not sufficiently proved by the respondent as required of it under section 43 as read together with section 47(5) of the Employment Act. The Respondent provided no proof that the Claimant had access to any payment platforms or made any payments. 7. Concerning conflict of interest with respect to Ngumbau Five Star Co. Limited (Ngumbau Traders) and Junker International, the claimant’s defence was that she was aware of conflict-of-interest policy and conceded that Martin Mutuku (deceased) was her brother and that she became aware after his death that he acquired shares in one of the respondent’s distributors Ngumbao Five Star and that she consequently spoke to Betty Njagi and asked her what she should do since this was a case of a past conflict of interest and that she declared the conflict after her brother had died. It was her evidence that she would not know the shareholding of companies unless she asked for CR-12 from company’s registry and further that there was no requirement to ask for CR 12 and that she did not recruit Ngumbao Five Star Company as respondent’s distributor. Customers for respondents were freely recruited. With regard to Junker, it was the claimant’s defence that Junker later known as Gluetex, was within her docket and that both companies were associated to one person Judy Mwangi. She however denied close association with Judy and further denied ever giving Gluetex any preferential treatment. She however acknowledged that Gluetex was registered on 29th November, 2018 and that account opening forms found at page 26 RBD called upon Glutex to provide physical address and that she listed it. 8. In support to these accusations, the respondent on its part stated that the respondent had corporate policy on conflict of interest and that Ngumbau had no experience and track record and was therefore given preferential treatment by the claimant. Mr. Philippe Huenermann further testified that the respondent received information of close nexus between Junker and the claimant and that Junker too had no track record. He however stated that he did not have proof that claimant and Judy were neighbours and friends. Concerning Account application form by Junker at page 26 of RBD, he stated that the document was authorised by the claimant and himself. 9. My little research has revealed that there is a dearth of local caselaw on corporate conflict of interest. Majority of cases I have come across concern advocate-client conflict of interest. In the case of *British-American Investments Company (K) Limited v Njomaitha Investments Limited & another [2014] KEHC 4627 (KLR)* it was stated that:- *“…It is therefore clear that where a party asserts that conflict of interest exists, he must provide sufficient evidence to demonstrate that such conflict of interest indeed exists. It is incumbent upon such party wishing to disqualify an advocate or a firm of advocates from acting for a particular party to show that it has suffered or will suffer prejudice if such an advocate or firm of advocates continues to so act for that party. Mere suspicion, apprehension of a possible conflict of interest or fear of prejudice cannot be a basis to stop an advocate from acting on behalf of a party…”* 1. By parity of reasoning, it is not enough to merely allege conflict of interest. A party so alleging must provide sufficient evidence to demonstrate that such conflict indeed exists and that such party will suffer or likely to suffer loss or prejudice if such conflict continues. Mere suspicion, apprehension of a possible conflict of interest or fear of prejudice is not enough. Further, a conflict of interest *per se* is not automatically illegal, but it becomes illegal when a person fails to disclose it, uses their position for personal financial gain, or breaks specific public or corporate integrity laws. 2. In this particular case, eventhough the respondent alleged that the claimant was a sister to the late Martin Mutuku who held shares in Ngumbau Five Star Co. Limited (Ngumbau Traders) and that one Judy Mwangi, a partner in Junker International was neighbour and close friend to the claimant, the respondent did not lead any evidence that the assocations as stated above occasioned it any prejudice and the claimant financially benefitted from these associations or did anything to the prejudice of the respondent’s business by virtue of these associations. In any event with regard to Ngumbau Traders, the claimant stated and it was not denied by the respondent, that Martin Mutuku (deceased) was her brother and that she became aware after his death that he acquired shares in one of the respondent’s distributors Ngumbao Five Star and that she consequently spoke to Betty Njagi and asked her what she should do since this was a case of a past conflict of interest and that she declared the conflict after her brother had died. Further with regard to Junker, Mr. Philippe Huenermann testified that he did not have proof that claimant and Judy were neighbours and friends and further that the Account application form by Junker was authorised by the claimant and himself. Consequently, the court finds and holds that the respondent did not sufficiently establish conflict of interest in the claimant to warrant her summary dismissal. 1. Concerning insubordination, the claimant was accused of not obeying instructions by her line manager Mr. Philippe Huenermann issued on 31st May, 2019 asking her to seek approvals for any purchase order relating to promotion activities, advertising materials, events and sponsorships. The claimant was therefore accused of disobeying this directive by procuring without authorization:- 1. Purchase order 27571 of 23rd September, 2019 to Smart Printers Ltd for 10 Floor Stand displays valued at Kshs. 230,000/ 2. Purchase order 27676 of 7th October, 2019 to Smart Printers Ltd for 5,000 wall calendars valued at Kshs. 390,000/- 3. Purchase order 27693 of 29th October, 2019 to Vaja’s Manufucturers for 3,000 dustcoats valued at Kshs. 1,470,000/- 4. Purchase order 28121 of 10th December, 2019 to Kkraft Brand Design Ltd for 7 Free Standing Units valued at Kshs. 519,003/ 5. Purchase order 28439 of 23rd January, 2020 to Smart Printers Ltd for AC stickers valued at Kshs. 261,000/- 6. Purchase order 28440 of 23rd January, 2020 to Brand Central Ltd for 50 branded hoodies valued at Kshs. 90,000/- to Kkraft Brand 2. In response to these allegations the claimant stated among others that invoices from Smart Printers Limited found at page 236 of RBD fell under invoices to be approved by Mr. Philippe but she signed the invoices. She however stated that procurement was not under her docket and that she signed all LPO’s. Further approvals would be by purchase department and in that regard looped in Emma. The approvals by Philippe were additional. The claimant further stated that she had a limit which she did not exceed. Regarding irregular payments to the Basket ball team called Tangit found at page 257-258 of RBD, she stated that the payments related to marketing and sponsorship activities and that the questions raised at pages 260-261 were about the contract – allegations that “two pairs of eyes policy” was not followed. The contract never made any provision for payment. LPO was generated by purchase department and brought to her to confirm if the same was rendered. The rest of the process was beyond her. 3. The Court however takes note of submission by Counsel for the respondent Ms. Kashindi that in early 2019, the Respondent learnt that certain staff members appeared to have been involved in receiving monies personally on the pretext that they were meant for sponsorship of a basketball team. The Respondent carried out investigations which led to the institution of disciplinary action against a former employee who exited the Company after the disciplinary process. The Claimant was suspected to have been implicated in the irregular sponsorship of the basketball team and particularly due to her involvement in the signing of a contract between Henkel and the basketball *team.* The contract was irregular in that; it was signed by the Claimant who, alone, had no signing authority for the Respondent; it had no **“two pairs of eyes**” as required by the Respondent's standards. Further, the contract was not vetted by Henkel's legal department and no payments ought to have been made. The contract was not transparently shared with Henkel and was not uploaded into the global sponsorship database and the Contract did not give the amount payable by Henkel to the basketball team. 4. According to Counsel, these irregularities were made known to the Claimant to which she acknowledged the loopholes in the Sponsorship of the Basketball Team. Following this incident, the Respondent's then Managing Director and the Claimant's line manager, Mr. Philippe Huenermann**,** wrote to the Claimant vide an email of 31st May 2019 instructing her obtain approvals from him for any purchase order relating to promotion activities, advertising materials, events, sponsorships etc. The Claimant acknowledged the instruction and confirmed that it was *“noted and will be adhered to”.* Despite this, the Claimant approved several purchase orders thereafter without the authorization of her line manager. The Claimant admitted during the disciplinary hearing that she did not loop in Mr. Philippe for these Purchase Orders and that they were signed post 31st May 2019. 5. Under **Section 44(4)(e) of the Employment Act,** insubordination is classified as a form of **gross misconduct that legally justifies the summary dismissal of an employee.** The Employment Act states that gross misconduct occurs when:- *"...an employee knowingly fails, or refuses, to obey a lawful and proper command which it was within the scope of his duty to obey, issued by his employer or a person placed in authority over him by his employer.* In this particular case, the claimant conceded that Mr. Philippe Huenermann was her line manager and that she received the email of 31st May 2019 instructing her to obtain approvals from him for any purchase order relating to promotion activities, advertising materials, events, sponsorships etc and further that she confirmed to Mr. Philippe Huenermann that the email was noted and would be adhered to. The claimant further conceded that she was aware of the second pair of eyes policy. 1. From the foregoing, it cannot be gainsaid that the claimant was duty bound to adhere to instructions by her superior and her contention that the Purchase Orders post Mr. Philippe Huenermann email message of 31st May 2019 which she acknowledged and confirmed would be adhered to, fell within her docket and as such, she did not need any permission or approval to sign the Purchase Orders was insubordinating and a clear case of consciously failing and or refusing to obey a lawful and proper command which was within the scope of her duty to obey. The command or instructions were issued by Mr. Philippe Huenermann who she acknowldged was her line manager hence a person placed in authority over her by the respondent. The respondent was therefore justified in summarily dismissing the claimant on this ground. 2. The Court having found that not in all but only one justifiable ground for summarily dismissing the claimant, she is not entitled to compensation for unfair termination and further having been summarily dismissed, she is also not entitled to payment in lieu of notice of termination. 3. The claimant alleged that in terminating her service, the respondent violated her constitutional rights and defamed her in the process. In this respect the dictum in the often-cited case of Anarita ***Karimi Njeri-vs- Attorney General [1979] KLR* 154** becomes relevant. In that casethe court held that where a person seeks redress from the court in a matter involving the Constitution, they must set out, with a reasonable degree of precision, the nature of the complaint, the specific provision alleged to have been infringed, and the manner in which it is said to have been violated. Further, in the recent case of ***Ndinda v Ethics and Anti-Corruption Commission (Constitutional Petition E209 of 2021) [2025] KEELRC 3181 (KLR) (13 November 2025) (Judgment)*** this court (Abuodha, J) in dismissing claim for violation of rights and fundamental freedoms held that: *“The only issue left is whether in terminating the petitioner's service, the respondent discriminated or violated any of her rights and fundamental freedoms. Employment Act and employment law generally permits termination of employment contract by any party to it for valid reasons. Employment is not servitude. The Act further adequately provides for available remedies including quantum of compensation payable in the event of a successful claim for unfair termination of the contract. The court is therefore reluctant to rush into looking at ordinary termination of employment from a constitutional lense. There ought to exist egregious and outrageous reasons and or process of termination that no reasonable employer would embark on for the matter to mutate into a claim for breach of rights and fundamental freedoms.* *In this regard, the Court finds and holds that the allegations by the petitioner of breach of her rights and fundamental freedoms is unproved and unmerited.”* 1. I cannot agree more except reiterate that nothing in the case before smacks of violation of any constitutional right or defamatory act hence these allegations are without basis and are hereby rejected as bloated imagination and unproved. 2. The claimant additionally made claim for Car Allowance-Kshs. 100,000, Airtime Allowance - Kshs. 5,000, Fuel Allowance through a Total Bon Voyage Fuel Card - Kshs. 30,000 monthly limit. The Court takes the view that the allowances claimed by the claimant were a function of her employment contract. They were vehicles to enable smooth and efficient performance of the roles assigned to her by the employer. They did not constitute statutory emoluments such as house allowance and payment in lieu of leave. They were therefore coterminous with contract of employment and are not claimable post termination of service. Regarding sales commission these also as rightly submitted by counsel for the respondent were not payable as a matter of course but depended on the performance of her department. Sales commission arose only after confirmed sales and the same fluctuated across periods. of the Claimant's submission. In support of the foregoing observations, the court relies on the case ***Postal Corporation of Kenya v Tanui (Civil Appeal 127 of 2015) [2019] KECA 489 (KLR) (19 July 2019) (Judgment)***, where the Court of Appeal pronounced itself on benefits being computed as part of gross pay as below: *In common parlance, basic salary is the base income of an individual, the fixed part of one's compensation package; while an allowance is the amount received by the employee for meeting service requirements. It is provided in addition to the basic salary and varies from employer to employer. Some employers may well offer allowances that are clearly predicated on actual performance of the contract but which do not \_ form part of the gross salary of an employee.* Further in *Pravin Bowry v Ethics & Anti-Corruption Commission [2013] eKLR* the Court of Appeal stated that:- *“…there are certain allowances that are dependent on actual performance of the contract of employment and should not be taken into account when computing gross salary of an employee in cases of unfair or wrongful termination of employment. Some of the enlisted allowances were ‘the claim for telephone allowance; provision of security guards; provision of fuel; cost of medical premium and annual insurance; amounts due for outpatient and medicines; amount in lieu of leave; proportionate AAR premiums for Claimant's wife; cost of AAR cover for the unspent term of contract are all dismissed for the reason that these allowances are predicated on actual performance of the contract and not otherwise in the court's view…'.* The court further held that; *“In our view, there are certain allowances that are dependent on actual performance of the contract of employment. When calculating damages due to an employee in the event of unfair or wrongful termination, it is only the emoluments or gross salary of “The only issue left is whether in terminating the petitioner's service, the respondent discriminated or violated any of her rights and fundamental freedoms. Employment Act and employment law generally permits termination of employment contract by any party to it for valid reasons. Employment is not servitude. The Act further adequately provides for available remedies including quantum of compensation payable in the event of a successful claim for unfair termination of the contract. The court is therefore reluctant to rush into looking at ordinary termination of employment from a constitutional lense. There ought to exist egregious and outrageous reasons and or process of termination that no reasonable employer would embark on for the matter to mutate into a claim for breach of rights and fundamental freedoms.* *In this regard, the Court finds and holds that the allegations by the petitioner of breach of her rights and fundamental freedoms is unproved and unmerited.”* *the employee that should be taken into account, not allowances and privileges dependent on actual service and performance of the contract.”* 1. The Court is not only bound by the above cited decisions of the Court of Appeal but totally agrees with them and has nothing useful to add save to say that these claims are not claimable and are therefore rejected. 2. This brings me to the last question flagged for determination that is, whether the respondent entitled to the judgment on the counterclaim and or set-off. The Respondent sought from the Claimant; a reimbursement of the sum of Kshs. 9,220, 159.72 and USD 1652.64 claiming it to be the total loss suffered due to the Claimant's gross misconduct including fictitious payment for market activations and irregular sponsorship. The Court however notes that apart from the fact that it has found that these allegations were not sufficiently proved to support the claimant’s summary dismissal, these claims constitute special damages which must be strictly proved. 3. In this particular case, it must be properly established that apart from the alleged irregular approvals, the claimant benefitted from these alleged irregular payments. It is the Court’s view that employment contracts are personal and unique and not every act of misconduct or negligence causing an employer a loss or damage is claimable against such employee by way of a counterclaim in a suit for unfair termination by such employee. Where such counterclaim is raised, it essential that the employer clearly demonstrates that the employee benefitted from such misconduct, fraud or negligence not remediable by dismissal or termination of service and must be pursued by way of counterclaim or set-off. In this case and as already observed, the respondent did not establish that the claimant benefitted from the alleged irregular payments. The counterclaim is therefore found without merit and is hereby dismissed. The issue offset does not arise since the court has already reached the conclusion that the respondent was justified in dismissing the claimant on account of insubordination hence not entitled to any compensation. 4. **Consequently, the claim and the counterclaim are hereby dismissed with no order as to costs. That is to say each party to bear their own costs.** 5. **It is so ordered.** **Dated at Nairobi this 12th day of August 2026** **Delivered virtually this 12th day of August 2026** **Abuodha Nelson Jorum** **Presiding Judge-Appeals Division**