https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1923

Nel v Kotecha Wholesellers Ltd (Cause E064 of 2024) [2026] KEELRC 1923 (KLR) (7 July 2026) (Judgment) Neutral citation: [2026] KEELRC 1923 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Kisumu Cause E064 of 2024 Nzioki wa Makau, J July 7, 2026 Between Louis Kipchumba Nel Claimant and Kotecha Wholesellers Ltd Respondent Judgment 1.The Claimant instituted this suit via a Memorandum of Claim dated 6th August 2024 alleging unfair termination of employment. His case is that he was employed by the Respondent on 1st November 1994 as a manager in charge of Stores and Logistics and served continuously for approximately twenty-nine (29) years until the termination of his employment in January 2024, at which point he was earning a gross monthly salary of Kshs. 169,639/-. He avers that while in the course of employment he was involved in an accident forcing him to proceed on sick leave with full salary. It is his contention that the salary was paid until November 2020 when it was stopped without notification. The Claimant states that after a prolonged hiatus he approached the Respondent in June 2023 to inquire as to when he could resume duty and was advised to report back in January 2024 with a medical clearance from his doctor. However, upon reporting on 2nd January 2024 with the doctor's report confirming his fitness to resume duty, he was verbally informed that his services were no longer needed. According to the Claimant, the termination of his employment was without prior notice, pay in lieu of notice and without an explanation or a hearing under section 41 of the Employment Act. He further states that he reported the dispute to the Labour Office, where conciliation proceedings were undertaken and an agreement reached, but the Respondent failed to honour the agreement or pay his terminal dues. 2.Consequently, the Claimant prays for a declaration that his termination was unfair and seeks one month's salary in lieu of notice, compensation for unfair termination under section 49(1)(c) of the Employment Act, severance pay, salary arrears for the period between November 2020 and December 2023, together with costs of the suit. 3.In response to the suit the Respondent filed a Response to Memorandum of Claim and Counterclaim dated 10th December 2024. It admits employing the Claimant but disputes that he earned a salary of Kshs. 169,639/- at the time of termination of his employment and that he served continuously for twenty-nine (29) years and two (2) months. According to the Respondent the Claimant's injury was not sustained in the course of employment but in a motorcycle accident while standing in the middle of the road around his residence. Following the accident, it is the Respondent's case that the Claimant proceeded on three months leave between August and November 2020 with full pay at the expiry of which it required him to furnish a medical certificate. However, instead of complying the Respondent contends that the Claimant absconded resulting in the withholding of his salary from November 2020 to December 2023 pursuant to section 30 (1) of the Employment Act, having failed to provide evidence of capacity to continue working. 4.With regard to referral of the dispute to the Labour Officer, it acknowledges an agreement for payment of Kshs. 969,834/-, but averres that the agreement failed to take into consideration an outstanding loan of Kshs. 620,000/-. In view of the foregoing, the Respondent counterclaims for the amount of Kshs. 620,000/- and prays for dismissal of the suit and granting of the counterclaim with costs. 5.In its Reply to Defence and Defence to Counterclaim, the Claimant maintained that he never owed the Respondent a loan of Kshs. 620,000/-. 6.At the hearing two witnesses testified for the Claimant whereas four witnesses testified on behalf of the Respondent. The Claimant testifying as CW1 adopted his witness statement dated 6th August 2024 and produced the six documents in the list of documents dated the same day. He testified that he was knocked down by a motorcycle and after recovering he went to his work place with a medical certificate but was informed that his position had already been taken. Upon cross-examination he acknowledged that deductions for payment of the loan were being subtracted from his salary. 7.The Claimant’s second witness CW 2 was Mr. Abdikadir Ali Mohamed who also adopted his witness statement dated 6th August 2024. He narrated that he was the Claimant’s former colleague and was present when he reported to work after recovery from the accident. He stated that he heard the Claimant being informed that he should go back home and report back in January 2024 with a medical report. Furthermore, he narrates that he overheard the Claimant being reassured that his position was still intact. Upon cross-examination, he acknowledged that the Claimant was injured in a road traffic accident. At this juncture the Claimant’s case was closed. 8.The witnesses for the Respondent were 4 witnesses. The first was Mr. Nadil Faisal, RW1 who adopted his witness statement dated 5th December 2024 as his evidence in chief. He stated that he was the Respondent’s Assistant Stores Manager from 3rd October 2007 to 21st July 2024. He testified that in the months of June 2023 and January 2024 he never saw the Claimant visit the Respondent’s premises, only visiting on 19th February 2024 to sort out personal issues. Upon cross-examination he acknowledged that he had not produced any evidence showing that he was once the Respondent’s employee. 9.The second witness for defence was Mr. Vincent Ochieng Siso (RW2) who on his part also adopted his witness statement of the 3rd December 2024. He was adamant that both in the month of June and on 2nd January 2024 he was working for the Respondent but never saw the Claimant. The third witness for the Respondent was Mr. Peter Fanuel Mwita (RW3) who adopted his statement dated 3rd December 2024 stating that he was the invoicing clerk at the Respondent. He testified that he was stationed at the front office where anyone visiting the Respondent had to pass through before going to any other office. He testified that he was present in June 2023 and January 2024 but never saw the Claimant visiting the premises. 10.The Respondent’s last witness was Mr. Rajesh Purshottam Kotecha its director. He also adopted his statement dated 13th January 2025 and produced the documents in the list of documents of even date. He stated that between 4th August 2012 and 30th November 2021 the Claimant had been given numerous loans amounting to Kshs. 620,000/-. He testified that he visited the Labour Offices at Vihiga where the figure of Kshs. 969,834/- was agreed upon but he refused to sign the letter because the loan was not included. He asserted that to him, the Claimant was never terminated and could resume employment with the Respondent as in his view, there was no termination meted out by the Respondent. He maintained the Claimant left and was to return after getting better. He said he had worked with the Claimant for a very long time. 11.After conclusion of the hearing, parties filed written submissions. Claimant’s Submissions 12.On his termination, the Claimant reiterates that it was unfair contending that although the Respondent denied terminating his employment, it failed to explain how the employment relationship came to an end. He highlights the fact that the Respondent’s minutes indicated that business was not brisk, hence the director was not in a position to accept the Claimant back. 13.Regarding the reliefs sought, the Claimant submits that he is entitled to one month's salary in lieu of notice because his employment was terminated verbally without notice or payment in lieu thereof. He relies on section 35(1)(c) of the Employment Act, which requires termination of a monthly contract upon at least twenty-eight days' written notice. He further relies on the recommendation of the Labour Officer made during conciliation that he be paid one month's salary in lieu of notice. 14.On compensation for unfair termination, the Claimant submits that he was neither informed of the reasons for his dismissal nor accorded a hearing before the termination of his employment. He contends that the Respondent's refusal to reinstate him after he had recovered, as reflected in its own documents, demonstrates that his employment was terminated without adherence to procedural fairness. He therefore urges the Court to award compensation for unfair termination. 15.The Claimant further submits that he is entitled to severance pay on the ground that the Respondent effectively declared him redundant after informing him that his position had been taken over by another employee and that there was no position available for him. He asserts that the Respondent's statement that business was not brisk and that it could not take him back amounted to redundancy. He relies on section 40(1)(g) of the Employment Act, 2007, which requires an employer declaring an employee redundant to pay severance pay at the rate of not less than fifteen days' pay for each completed year of service. He maintains that having served the Respondent for twenty-nine years and two months, he is entitled to severance pay. 16.On salary arrears the Claimant submits that he is entitled to the same for the period between November 2020 and December 2023. He contends that although he remained on sick leave following the workplace accident and kept the Respondent informed of his medical condition, he was instructed to resume work in January 2024 only to be informed that his services were no longer required. He asserts that the Respondent should either have reinstated him after his recovery or paid his lawful terminal dues. He further submits that despite participating in the conciliation process and a recommendation having been made in his favour, the Respondent failed to comply with the conciliator's recommendations. 17.In response to the counterclaim, the Claimant submits that the Respondent failed to prove the alleged debt of Kshs. 620,000/-. He argues that he did not sign the petty cash vouchers relied upon by the Respondent, that the vouchers do not demonstrate that they originated from the Respondent, and that no bank statements were produced to establish that the alleged sums were ever remitted to him. He therefore urges the Court to dismiss the counterclaim. Consequently, he urges the Court to allow the claim as prayed. Respondent's Submissions 18.On its part the Respondent identifies two issues for determination, namely:a.Whether the Claimant's employment was wrongfully, unfairly and unlawfully terminated; andb.Whether he is entitled to the reliefs sought. 19.As to whether the Claimant was unfairly terminated, the Respondent submits that he voluntarily deserted duty. It asserts that although an employee is entitled to sick leave under section 30 of the Employment Act, the Claimant failed to provide the requested medical certificate before resuming duty which failure under normal circumstances constitutes a ground for summary dismissal. The Respondent further submits that absence from work without authority constitutes a valid ground for summary dismissal under section 44(4) of the Employment Act. It relies on the case of Calister Nyatichi Oriku v Epco Builders Ltd [2018] eKLR, where the Court held that an employee absent due to illness must notify the employer within a reasonable time. It also cites the decision in the case of Stephen Kariuki & another v Michael Njoroge & Sandstone Logistics Ltd/Cylinder Works Ltd [2017] KEELRC 1986 (KLR), where the Court held that upon resuming duty an employee must furnish a medical certificate, failing which the absence may amount to a ground for summary dismissal. It asserts that the Prescription Note dated 7th September 2023 was never presented to the Respondent and that its witnesses confirmed the Claimant never reported to its premises between June 2023 and January 2024. 20.On the remedies sought, the Respondent submits that the Claimant is not entitled to notice pay because his employment was never terminated. It relies on Banking Insurance & Finance Union (Kenya) v Barclays Bank of Kenya Ltd [2014] eKLR, where the Court held that an employee who absents himself from work without informing the employer is deemed to have abandoned the contract of employment. The Respondent further submits that the claim for compensation under section 49 of the Employment Act is unsustainable since there was no termination of employment. It relies on David Getare Nyangau v Houseman General Contractors Ltd [2013] eKLR for the principle that a party must prove entitlement to the relief sought. It also cites John Mutsumi David v Delta Guards Ltd [2016] eKLR, where the Court held that an employee who absconds duty cannot claim notice pay, compensation or severance pay. The Respondent also cited the case of John Kebaso Mose v Uchumi Supermarket, [2017] KEELRC 228 (KLR), where the Court held that where there is no termination of employment, claims founded on unfair termination cannot succeed. 21.Regarding salary arrears, the Respondent submits that the Claimant was absent from duty for an extended period without complying with section 30 of the Employment Act by furnishing the required medical certificate. It asserts that any entitlement to paid sick leave was limited to the statutory period prescribed under section 30 and did not extend to the several years claimed by the Claimant. 22.On the counterclaim, the Respondent submits that it advanced the Claimant loans amounting to Kshs. 620,000/- between 2012 and 2021, which were recoverable through monthly deductions. It contends that the outstanding balance remains unpaid and is supported by the loan ledger and vouchers produced in evidence. The Respondent therefore urges the Court to dismiss the Claimant's suit with costs and to enter judgment on the counterclaim for Kshs. 620,000/- together with costs and interest. Disposition 23.The case pits an old-time employee of the Respondent against his erstwhile employer. The Respondent's final witness Mr. Rajesh Purshottam Kotecha stated that he had a good relationship with the Claimant and that all was well until the accident the Claimant suffered. He said the accident caused the Claimant not to resume work. He spoke of the Claimant having been there for a considerable period. It was the Claimant's testimony that he was allowed to recuperate and that when he attempted to return he was not permitted to do so. The Claimant acknowledges that there was a lot of time between the accident and when he finally got to seek reprieve from the court as the Respondent had allowed him to recuperate first. 24.The Claimant was terminated as he has not been paid any salary for the extended period he has been away. This is despite the fondness the Respondent's director displayed over the service of the Claimant. Having determined the Claimant was unwell he ought to have been subjected to the process that would cause a dignified exit. The Respondent did not do that and for that the Court holds the termination was unfair and unlawful. Mr. Rajesh Purshottam Kotecha the Respondent's director testified that he visited the Labour Offices at Vihiga where the figure of Kshs. 969,834/- was agreed upon but he refused to sign the letter because the loan of Kshs. 620,000/- was not included. 25.There was evidence there was a sum owed to the Respondent by the Claimant per the loan ledger and vouchers produced. The outstanding balance was sought in the counterclaim which was a sum of Kshs. 620,000/-. The Respondent would be entitled to this as evidence shows the sum remains unpaid. 26.The termination of the Claimant was in a way that calls for the award of the maximum amount capable of grant. The Claimant had worked for the Respondent for 29 odd years and deserved to be treated better. He had become akin to family as Mr. Kotecha stated. The Respondent having terminated the employee when the Claimant was earning Kshs. 169,639/-, the Claimant is entitled to Kshs. 2,035,668/- as compensation being 12 months salary. The Respondent will also pay the amount agreed on at the labour office being Kshs. 969,834/-. The Claimant is not entitled to any salary for the period he did not work for the Respondent meaning he will get nothing under this head of his claim. 27.In the final analysis, I enter judgment for the Claimant against the Respondent for:a.Kshs. 969,834/- as terminal benefits agreed upon.b.Kshs. 2,035,668/- as compensation for unfair and unlawful termination being equivalent to 12 months gross salary. 28.I also enter judgment for the Respondent against the Claimant for Kshs. 620,000/- being the counterclaim. 29.The sum on the counterclaim shall be offset from the sum of Kshs. 3,005,502/- payable to the Claimant leaving a balance of Kshs. 2,385,502/- as the sum due and payable to the Claimant. 30.On costs, the fundamental principle is that costs follow the event. A successful party is ordinarily awarded costs which are intended to cover a portion of the litigation expenses and incidentals. However, while the general rule is that costs follow the event, the Court has the discretion to order otherwise. In the case of Jasbir Singh Rai & 3 others v Tarlochan Singh Rai & 4 others [2014] eKLR the Supreme Court held as follows:“The award of costs would normally be guided by the principle that ‘costs follow the event’... However, the vital factor in setting the preference is the judicious exercise of discretion by the court..." 31.The Court holds and finds that costs are therefore not automatic and must be granted or denied based on the circumstances of each case. Here we have parties that have substantively succeeded in their claims. The best order would be for each party to bear their own costs. It is so ordered. DATED AND DELIVERED AT KISUMU THIS 7TH DAY OF JULY 2026NZIOKI WA MAKAU, MCIARB.JUDGE