[2025] KEELRC 1733 (KLR)

Okide v Power Point Systems (EA) Limited (Cause E343 of 2022) [2025] KEELRC 1733 (KLR) (12 June 2025) (Judgment)

Neutral citation: [2025] KEELRC 1733 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E343 of 2022

JW Keli, J

June 12, 2025

Between

Christopher Amos Okide

Claimant

and

Power Point Systems (Ea) Limited

Respondent

Judgment

1. The claimant filed a memorandum of claim dated 8th April 2022, received in court on the 24th May 2022, against the respondent, alleging unfair termination and seeking the following orders:-a.Declaration that the Respondent's Causes of Action, being termination letter notice dated 10th December 2021, issued against the Claimant, is irregular, unlawful, unprocedural, incompetent, breach of contract, invalid, null and void, ab initio.b.A declaration that the purported termination is irregular, unlawful, unfair and the same do not comply with the employment laws, terms of the contract between the Claimant and the Respondent, dated 5th October, 2011. c.A declaration that the termination letter dated 10/12/2021, constitutes breach of contract of the Claimant's employment dated 5/10/2011. d.An Order of permanent Injunction to issue and is hereby issued against the Respondent directing her to reinstate the Claimant back to service and without lose of benefits accrued. Monetary Remedies/Reliefs;e.One Month Salary in lieu of Notice, being……………………KSHS. 150,000/=f.Unlawful salary deductions(Jul-Oct 2020; @45,000/=).......................................................KSHS.180,000/=(Nov-Dec 2020; @30,000/=)………………………………………………….KSHS. 60,000/=g.Unpaid House Allowances: (15% of the basic salary):(Nov 2011 to April 2012 (BS 60,000/=) (9,000x 6months)……….KSHS. 54,000/=(May 2012 to Dec 2013 (BS 67,000/=) (10,050x 20months)……..KSHS. 201,000/=(Jan 2013 to Jan 2016 (BS 100,000/=), (15,000x 25months)………...KSHS. 375,000/=(Feb 2016 to Dec 2021 (BS 150,000/=) (22,500x 71months)………KSHS. 1,597,500/=h.Leave days earned and due (11 days, 2021);(11. days/30days x 150,000/=)..........................................................KSHS. 55,000/=i.Commuter (out of pocket commuting expenses) since Jan 2018 to Dec 2021). (Daily driving personal car, covering 60Km), fueling Kshs. 750/= P/day, for 5dys, 20dys p/week, 240dys p/year, 240 days per year x 4 yrs = 960 days less 84days annual leaves = 876days x 750/=...................................................KSHS. 657,000/=j.Car Insurance Charges Kshs. 5,000/= p/mnth x 45mnths……….KSHS. 225,000/=k.Car service charge, Kshs. 25,000/= p/month x 45mnths……..KSHS. 1,125,000/=l.12 Months' Salary, full compensation for wrongful termination/loss of earning:(12 Months x 150,000)………………………………...KSHS 1,800,000/=m.General Damages, to the Claimant, for breach of contract,Being……………………………………………………………..KSHS. 4,000,000/=n.Certificate of Service.i.That, the Honorable Court be pleased to issue an Order, and is hereby issued, directing the Respondent to bear Costs of this Suit and Interests thereto at Court rate, of the suit.ii.That, the Honorable Court to issue any other Order, Orders, and other Reliefs which this Court may deem fit to grant, and for the ends of justice to materialize.

2. In support of the claim the claimant filed his witness statement of even date, a list of documents dated 8th April 2022 together with the bundle of documents.

3. The claim was opposed by the respondent who entered appearance through the lawfirm of Chwero & Company Advocates and filed a response dated 20th June 2022 and amended on the 4th October 2022. The respondent filed witness statement of Stanley Ngatia Muriithi dated 20th June 2022 and his authority to plead.

Hearing and evidence 4. The claimant’s case was heard on the 17th May 2023 before Justice Ocharo Kebira where the claimant testified on oath, and adopted his witness statement dated 8th April 2022 as his evidence in chief. He produced his documents under list dated 8th April 2022 and a further list dated 28th April 2023 as exhibits C-exhibits 1-13. The claimant was cross-examined by counsel for the respondent, Mr. Chege and re-examined by his counsel.

5. The respondent’s case was heard before me on the 4th March 2025. The respondent called Stanley Ngatia Muriithi as RW1. He testified on oath and adopted his witness statement dated 20th June 2022 as his evidence in chief. He was cross-examined by counsel for the claimant Ms. Njenga and re-examined by respondent’s counsel.

6. The parties filed written submissions after close of the respondent’s case.

The claimant’s case in brief:- 7. The claimant’s case was that his employment was terminated unfairly without any disciplinary process, that he had worked frorm 1st November 2011 upto 14th December 2021. That his employment was terminated with basic salary of Kshs. 150, 000. The claimant said he was treated differently from other managers who he said had been afforded official cars. That he had an official car which was withdrawn in 2017. The claimant sought for payment of house allowance at rate of 15%, underpaid salary which he said was deducted unlawfully between July to December 2020, commuter allowance and car insurance, untaken leave days as well as compensation for unfair termination.

The Respondent’s case in brief 8. That the claimant was paid all-inclusive wages, that his services were terminated on 10th December summarily for failure to report to work from 1st December 2021 in accordance with the provisions of section 44(4) of the Employment Act. The Respondent denied that the claimant was entitled to official car and car service charges and like every other employee bore is commuter expenses. On the salary deduction, the respondent stated that they happened during COVID 19 pandemic when the company closed down and employees went home in the period July 2020 to December 2020. The respondent contended that the claimant agreed to salary deductions of Kshs. 45000 per month between the period July to October 2020 inclusive and Kshs. 30000 per month between the November to December 2020. The respondent contended that the deductions had been agreed on. The respondent stated that the claimant having absconded duty he was not entitled to compensation.

Determination Issues for determination 9. The claimant addressed the following issues in his submissions: -i)Whether the Claimant was an employee of the Respondent?ii)Whether the Claimant was granted all the allowances due to him during his tenure in Respondent’s employment?iii)Whether the Claimant’s contract was properly terminated?iv)Whether the Claimant was paid his terminal benefits due?v)Can this Court grant remedies sought?vi)Who shall bear the cost?

10. The respondent addressed the issue of fairness of the termination and merits of the reliefs sought.

11. The court having perused the parties’ pleadings and the trial proceedings before Justice Ocharo Kebita was of the considered opinion that the issues placed by the parties for determination in the suit were:-a.Whether the termination of the employment of the claimant was lawful and procedurally fairb.Whether the claimant was entitled to the relief sought.

Whether the termination of the employment of the claimant was lawful and procedurally fair 12. The threshold for determination of fairness of termination of employment is according to the provisions of section 45 (2) of the Employment Act to wit:- ‘45(2) A termination of employment by an employer is unfair if the employer fails to prove—(a)that the reason for the termination is valid(b)that the reason for the termination is a fair reason—(i)related to the employees conduct, capacity or compatibility; or(ii)based on the operational requirements of the employer; and(c)that the employment was terminated in accordance with fair procedure.’’ To pass the fairness test the termination must pass the substantive (in terms of reasons) fairness and the procedural fairness under section 41 of the Employment Act (Walter Ogal Anuro v Teachers Service Commission[2013]eKLR.

The claimant’s submissions 13. The claimant submitted that the termination of the Claimant’s employment contract was neither grounded on any statute nor law of contract, and the same was not justified as there were no disciplinary-related reasons advanced to the Claimant prior to the said termination. No specific charge or reason or ground mentioned or pointed out in the said termination letter. The claimant submitted that the cause of action executed vide a letter dated 10th December 2021 against the Claimant constituted a gross breach of a valid contract.That from the contents contained in the termination letter dated 10/12/2021 does not advance and / or convey disciplinary related reason or reasons for the termination. On the other hand, the pleadings contained in the statement of defense as amended and dated 4th October 2022 now purport to give reasons as to why the Claimant was dismissed from employment. In the said defense and the witness statement, it is evident that the entire defense case is contradictory and therefore self-defeatist. The Respondent’s pleadings including the statement by the witness have by implication admitted of having unlawfully terminated Claimant’s employment contract through a letter dated 10th December 2021, as he was not processed in line with the statutory requirements under the law. The allegation that the Claimant’s termination is attributed to absenteeism and that the Claimant absconded duty on 1st December 2021 or any other day is not supported by material evidence and therefore such allegation must fall, and this court must reject such invitation.

Respondent’s submissions 14. On 1st December 2021, the claimant did not report for duty. He reported on 10th December 2021 and the Respondent summarily dismissed him in accordance with Section 44 subsection (3) as read together with Section 44 (4) (a) of the Employment Act. Under the said Subsections, the employer is entitled to summarily dismiss an employee if he absents himself from work without leave or permission of the employer. No notice is required. It is the respondent case that it was entitled to dismiss the claimant on the basis of fundamental breach of his contract and absenting himself for ten days without leave or permission . The claimant did not address or challenge this issue either in the pleadings or evidence. The respondent pleaded in its response that the claimant was dismissed because of absenting himself from duty from 1st December 2021 to 10th December 2021. The claimant did not seek to reply to that fact. Secondly, the claimant did not refute or challenge those facts. No evidence was read to rebut the evidence of the respondent's supervisor DW1 Stanley Ngatia Muriithi who gave evidence that the claimant did not report for duty on 1st December 2021 and stayed away until 10th December 2021. This was material evidence that called for rebuttal but none was forth coming. The claimant assumed that he was wrongly dismissed and basically focused on claims against the respondent.

Decision 15. The burden of prove of employment claims is as stated under section 47(5) of the Employment Act to wit :-‘47 (5) For 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.’’

16. The reason for termination is to be proved in accordance with the provisions of section 43 of the Employment Act to wit:- ‘43. Proof of reason for termination(1)In any claim arising out of termination of a contract, the employer shall be required to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45. (2)The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.’’ (emphasis given).

17. The claimant’s employment was terminated vide letter dated 10th December 2021 which is reproduced as follows:-‘Ref hr/chris/01/21Date 10th Dec 2021Chris OkideHead of LogisticsDear ChrisRE: Termination of employment by ending of contract.I regret to inform you that your employment contract has been terminated by ending the contract W.E.F from 14th December 2021. The company will therefore pay your accrued entitlement as per your employment letter and any outstanding leave days entitled to you.Please ensure we have all company materials from you as you make arrangements to collect your personal effects.We appreciate your contribution to the achievements and growth of the company for the duration served, and wishes you well in your future endeavors.Yours FaithfullyPowerpoint Systems EA Ltd,Cosmas MusyokiChief Executive Officer’’(at Page 21 of the Claimant’s bundle).On face value of the letter there is no reason given for the termination of the employment. During cross-examination the claimant told the court he worked upto 14th December 2021 the date indicated as the effective date of termination in the letter dated 10th December 2021.

18. During cross-examination of RW1 told the court the claimant absconded and they tried to reach him unsuccessfully through phone call. He admitted they had not produced any evidence to that effect. RW1 had no evidence of clock in as it did not exist. The respondent submitted that its defence of absenteeism was not rebutted. The court finds that section 43 of the Employment Act is to the effect that- ‘The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.’’The letter of termination ought to disclose the reason for the termination. The court did not believe the alleged reasons of absenteeism taking into account the reason was not stated in the letter of termination and further the termination was not immediate. The letter is dated 10th and the termination was effective 14th. That can only point to the claimant having been on duty at time of termination. The court finds that reason for termination advanced in defence in court which are not in the letter of termination are of zero probative value. section 43 is to effect that the reason exists at time of termination and are the reasons for the termination.

19. Consequently the termination was without reasons and hence unlawful under section 45 of the Employment Act to wit :-‘45 (2) A termination of employment by an employer is unfair if the employer fails to prove—(a)that the reason for the termination is valid;(b)that the reason for the termination is a fair reason—(i)related to the employees conduct, capacity or compatibility; or(ii)based on the operational requirements of the employer; and(c)that the employment was terminated in accordance with fair procedure.’’

20. The court found no evidence of any disciplinary procedure before the termination. Section 41 of the Employment Act provides for mandatory procedural process to be complied with before termination of employment on account of misconduct, capacity or operational requirements. The respondent alleged the claimant was absent without permission which if true amount to gross misconduct under section 44 of the Employment Act. The reason was not valid. Even in cases under section 44 the employee is entitled to procedural fairness before summary dismissal under section 41 (2) of the employment act to wit:- ‘2) Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1) make.’’In the upshot the termination is held as both unlawful (for lack of reason) and procedurally unfair.

Whether the claimant is entitled to reliefs sought 21. The claimant sought the following reliefs:-a.Declaration that the Respondent's Causes of Action, being termination letter notice dated 10th December 2021, issued against the Claimant, is irregular, unlawful, unprocedural, incompetent, breach of contract, invalid, null and void, ab initio.b.A declaration that the purported termination is irregular, unlawful, unfair and the same do not comply with the employment laws, terms of the contract between the Claimant and the Respondent, dated 5th October, 2011. c.A declaration that the termination letter dated 10/12/2021, constitutes breach of contract of the Claimant's employment dated 5/10/2011. d.An Order of permanent Injunction to issue and is hereby issued against the Respondent directing her to reinstate the Claimant back to service and without lose of benefits accrued. Monetary Remedies/Reliefs;e.One Month Salary in lieu of Notice, being……………………KSHS. 150,000/=f.Unlawful salary deductions(Jul-Oct 2020; @45,000/=).......................................................KSHS.180,000/=(Nov-Dec 2020; @30,000/=)……………………….KSHS. 60,000/=g.Unpaid House Allowances: (15% of the basic salary):(Nov 2011 to April 2012 (BS 60,000/=) (9,000x 6months)……….KSHS. 54,000/=(May 2012 to Dec 2013 (BS 67,000/=) (10,050x 20months)……..KSHS. 201,000/=(Jan 2013 to Jan 2016 (BS 100,000/=), (15,000x 25months)………...KSHS. 375,000/=(Feb 2016 to Dec 2021 (BS 150,000/=) (22,500x 71months)………KSHS. 1,597,500/=h.Leave days earned and due (11 days, 2021);(12 days/30days x 150,000/=)................................................KSHS. 55,000/=i.Commuter (out of pocket commuting expenses) since Jan 2018 to Dec 2021). (Daily driving personal car, covering 60Km), fueling Kshs. 750/= P/day, for 5dys, 20dys p/week, 240dys p/year, 240 days per year x 4 yrs = 960 days less 84days annual leaves = 876days x 750/=...................................................KSHS. 657,000/=j.Car Insurance Charges Kshs. 5,000/= p/mnth x 45mnths……….KSHS. 225,000/=k.Car service charge, Kshs. 25,000/= p/month x 45mnths……..KSHS. 1,125,000/=l.12 Months' Salary, full compensation for wrongful termination/loss of earning:(12 Months x 150,000)……………………………...KSHS 1,800,000/=m.General Damages, to the Claimant, for breach of contract, Being………………………………………..KSHS. 4,000,000/=n.Certificate of Service.Costs follow the event.

22. The court already held the termination was unlawful and unfair. The court found that 3 years had lapsed since the termination hence the prayer for reinstatement was not available to the claimant according to section 12 (3)(vii) of the Employment and Labour Relations Court Act to wit:- ‘(vii) an order for reinstatement of any employee within three years of dismissal, subject to such conditions as the Court thinks fit to impose under circumstances contemplated under any written law; or’’

Compensation for the unfair termination 23. The claimant sought for maximum compensation. The respondent submitted that the claimant was only entitled to notice pay under the Act unless it was in the contract of employment and relied on a decision of the Court of Appeal.The court finds that the decision relied on of the Court of Appeal was in 1991 being Alfred J. Githinji vMumias Sugar Comapany Limited Civil Appeal No. 194 of 1991 thus before enactment of the Employmnet Act in 2007 which now provides for compensation on finding unfair termination under section 49 beyond the notice pay. In Ken freight (E.A) Limited v Benson K. Nguti SC Pet. No. 37 of 2018 [2019] eKLR the Supreme 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….”.

24. Section 49 provides as follows:- ‘49. Remedies for wrongful dismissal and unfair termination(1)Where in the opinion of a labour officer summary dismissal or termination of a contract of an employee is unjustified, the labour officer may recommend to the employer to pay to the employee any or all of the following—(a)the wages which the employee would have earned had the employee been given the period of notice to which he was entitled under this Act or his contract of service;(b)where dismissal terminates the contract before the completion of any service upon which the employee's wages became due, the proportion of the wage due for the period of time for which the employee has worked; and any other loss consequent upon the dismissal and arising between the date of dismissal and the date of expiry of the period of notice referred to in paragraph (a) which the employee would have been entitled to by virtue of the contract; or(c)the equivalent of a number of months wages or salary not exceeding twelve months based on the gross monthly wage or salary of the employee at the time of dismissal.’’(The court may award all or any of the above.)(Kenfreight (supra))

25. The court found there was no procedural fairness, hence notice pay is due as sought for one month's salary Kshs. 150000 under section 35 of the Employment Act .

26. On compensation the court may award upto maximum equivalent of 12 months gross salary. In Kenya Broadcasting Corporation v Geoffrey Wakio the Court stated “This Court has established the rule that an award of the maximum 12 months’ pay must be based on sound judicial principles. In Ol Pejeta Ranching Limited vs. David Wanjau Muhoro [2017] eKLR this Court categorically stated that the trial Judge must justify or explain why a claimant is entitled to the maximum award; that the exercise of discretion must not be capricious or whimsical.”

27. The court is guided by factors under section 49(4) of the Act to wit’-‘(4)A labour officer shall, in deciding whether to recommend the remedies specified in subsections (1) and (3), take into account any or all of the following—(a)the wishes of the employee;(b)the circumstances in which the termination took place, including the extent, if any, to which the employee caused or contributed to the termination; and(c)the practicability of recommending reinstatement or re-engagement;(d)the common law principle that there should be no order for specific performance in a contract for service except in very exceptional circumstances;(e)the employee's length of service with the employer;(f)the reasonable expectation of the employee as to the length of time for which his employment with that employer might have continued but for the termination;(g)the opportunities available to the employee for securing comparable or suitable employment with another employer;(h)the value of any severance payable by law;(i)the right to press claims or any unpaid wages, expenses or other claims owing to the employee;(j)any expenses reasonable incurred by the employee as a consequence of the termination;(k)any conduct of the employee which to any extent caused or contributed to the termination;(l)any failure by the employee to reasonably mitigate the losses attributable to the unjustified termination; and(m)any compensation, including ex-gratia payment, in respect of termination of employment paid by the employer and received by the employee.’’

28. In the instant case the claimant was employed on the 1st November 2011 and his services terminated on 14th December 2021 for no reason. The claimant had no record of misconduct while in service as the alleged absenteeism was not proved. There was no warning letter or notice to show case produced. The claimant stated he had not found a suitable employment. He was in management and in the opinion of the court there was no indication he was likely secure a similar job in the market. The court found the instant case justified the maximum compensation of unlawful termination equivalent of 12 months' salary which is allowed for the sum of Kshs. 1,800,000/=.

29. On the claim for unlawful salary deductions- (Jul-Oct 2020; @45,000/=)..KSHS.180,000/=(Nov-Dec 2020; @30,000/….KSHS. 60,000/=.The court took notice of the fact that the claimant was in management. There was no history of him having made a claim for monies deducted. The Court took further judicial notice of the effects of COVID 19 pandemic and impact on businesses, globally. The court found that the version of events by the Respondent was believable.

30. On claim for Leave days earned and due (11 days, 2021);days/30days x 150,000/=).KSHS. 55,000/=The court found no challenge on this issue. The claimant worked upto 14th December 2021. The prorated leave of 11 days is allowed.

31. On the claim for Unpaid House Allowances: (15% of the basic salary):(Nov 2011 to April 2012 (BS 60,000/=) (9,000x 6months).KSHS. 54,000/=,(May 2012 to Dec 2013 (BS 67,000/=) (10,050x 20months).KSHS. 201,000/=,(Jan 2013 to Jan 2016 (BS 100,000/=), (15,000x 25months).KSHS. 375,000/=,(Feb 2016 to Dec 2021 (BS 150,000/=) (22,500x 71months)KSHS. 1,597,500/= .The court held that 15% of minimum wages as house allowance applied to employees under minimum wages. The claimant was not. He was paid above minimum wages hence the 15% was not applicable. The salary being above the minimum wages plus 15% the claim for house allowance fails.

32. On claim for Commuter (out of pocket commuting expenses) since Jan 2018 to Dec 2021). (Daily driving personal car, covering 60Km), fueling Kshs. 750/= P/day, for 5dys, 20dys p/week, 240dys p/year, 240 days per year x 4 yrs = 960 days less 84days annual leaves = 876days x 750/=(KSHS. 657,000/=) Car Insurance Charges Kshs. 5,000/= p/mnth x 45mnths……….KSHS. 225,000/= Car service charge, Kshs. 25,000/= p/month x 45mnths……..KSHS. 1,125,000/=. The court did not find any basis to award the above. They claims being of special damages ought to be strictly proved.

Conclusion 33. In conclusion, the court found that the claim for unfair termination was merited. Judgment is entered for the claimant against the respondent as follows:-a.The termination is held to have been unlawful and unfair.b.Notice pay award of Kshs. 150,000c.Compensation for unfair termination is awarded for Kshs., 1,800,000d.Prorated untaken leave days pay in lieu for 11 days for the sum of Kshs. 55,000/=e.Total sum of Kshs. 2,005,000 awarded with interest at court rates from date of judgment.f.Costs of the suit.g.Certificate of service to issue under section 51 of the Employment Act

34. It is so Ordered.

DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 12TH DAY OF JUNE, 2025. J.W. KELI,JUDGE.In the presence of:Court Assistant: OtienoClaimant : -Ms. NjengaRespondent: absent