https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/470

**REPUBLIC OF KENYA** **IN THE CHIEF MAGISTRATES COURT AT MOMBASA** **MAGISTRATES COURT CIVIL** **MCELRC CAUSE NO. E016 OF 2024** **CYNTHIA ACHIENG OTIENO……….….……...………………………….…..CLAIMANT** **VERSUS** **PETRO OIL KENYA LIMITED…………………….……………………….....RESPONDENT** **JUDGEMENT** **Introduction** 1. The Claimant commenced these proceedings through a Memorandum of Claim dated 25th January 2024. She alleged that the Respondent unlawfully and unfairly terminated her employment on 15th December 2023 by replacing her at her workstation, directing her to hand over her duties and thereafter failing to allow her to resume work. 2. The Claimant sought: A declaration that her employment was unlawfully and unfairly terminated; A declaration that she was constructively dismissed; A certificate of service; Terminal and contractual dues initially quantified at Kshs.490,196; Costs and interest; and any other appropriate relief. 3. The Respondent opposed the Claim through its Response dated 27th February 2024. It admitted employing the Claimant but denied terminating her on 15th December 2023. Its case was that she was placed on administrative leave to facilitate investigations into complaints of short delivery of fuel, refused to acknowledge the administrative leave, deserted duty and subsequently failed to attend a disciplinary hearing. 4. The Claimant’s case was heard on 20th May 2025. She testified, adopted her witness statement and produced her documentary evidence. She was cross-examined by counsel for the Respondent. 5. The Respondent’s case was heard on 11th May 2026. The Respondent called its witnesses, produced its documentary evidence and closed its case after cross-examination. 6. Upon conclusion of the hearing, both parties filed written submissions. The Claimant subsequently filed supplementary submissions addressing matters arising from the Respondent’s evidence. **The Claimant’s Case** 1. The Claimant testified that the Respondent employed her in January 2015 as a Pump Attendant at its Likoni Station. She was transferred to Bombolulu Station around March 2016 and was later promoted to a supervisory position in September 2022. 2. According to the Claimant, by November 2023 she was earning Kshs.28,726 per month. The Respondent, however, maintained that her remuneration comprised a basic salary of Kshs.23,413 and house allowance of Kshs.3,512. 3. The Claimant testified that on 15th December 2023 she reported to work at the Bombolulu Station and found another employee, Mr. Mutua Kilee, having been placed in her position. She stated that the Station-in-Charge, Mr. Huzefa Adamali, instructed her to hand over to Mr. Kilee. She consequently handed over: Loyalty Matatu Discount funds of Kshs.6,865; Petty cash of Kshs.5,160; and lubricants valued at Kshs.1,950. 4. The handover was recorded in a document dated 15th December 2023 and acknowledged by the employee receiving the items. The Claimant was instructed to return the following afternoon to wind up. She testified that she returned on 16th December 2023, but no person in authority attended to her. Her position was already occupied and no work was assigned to her. 5. She waited for approximately one week but received no formal communication explaining: Whether she had been suspended; Whether she had been placed on administrative leave; Whether she was required to return to work; or whether her employment had been terminated. 6. She consequently instructed advocates, who issued a demand letter dated 21st December 2023. The letter was received by the Respondent on the same date. 7. The Claimant testified that the Respondent did not immediately respond to the demand. Around 3rd January 2024, she received communication asking her to collect a show cause letter from the Respondent’s head office. She replied that all correspondence should be directed through her advocates. A further demand letter was consequently issued on 10th January 2024. 8. By a letter dated 13th January 2024, the Respondent denied that the Claimant had been terminated. It asserted that she had been placed on administrative leave pending investigations and invited her to a disciplinary hearing scheduled for 17th January 2024. 9. The Claimant did not attend the disciplinary hearing. Her position was that the disciplinary process was initiated after her employment had already been brought to an end by the Respondent’s conduct on 15th December 2023. The Respondent thereafter issued a summary dismissal letter dated 29th January 2024. 10. The Claimant maintained that: No administrative leave letter was issued or communicated to her on 15th December 2023; She did not refuse to sign any such letter; She did not desert duty; She was not contacted between 15th and 31st December 2023 and directed to resume duty; She was not paid for the days worked in December 2023; She was not paid during the alleged administrative leave; and the disciplinary process commenced only after she made demands concerning the termination. 11. She sought compensation, notice pay, unpaid salary, payment for accrued leave and off days, a certificate of service, costs and interest. Her written submissions ultimately particularised the monetary reliefs on the basis of the remuneration and outstanding days admitted in the Respondent’s records. **The Respondent’s Case** 1. The Respondent admitted that it employed the Claimant through a letter dated 6th January 2015 as a Pump Attendant. Her initial remuneration was: Basic salary of Kshs.12,655; and house allowance of Kshs.1,898. The Respondent stated that at the time of separation the Claimant was an Assistant Supervisor earning: Basic salary of Kshs.23,413; and house allowance of Kshs.3,512. The Respondent denied that she earned Kshs.28,726. 2. The Respondent further alleged that the Claimant had a history of disciplinary infractions, including insubordination, absenteeism and failure to follow proper fuel-dispensing procedures. 3. It relied on, among other documents: An email dated 7th November 2016 concerning sitting and eating on the forecourt; A notice to show cause dated 18th May 2020 regarding fuel-dispensing procedures; An invitation dated 20th May 2020 to attend a disciplinary hearing on 23rd May 2020; and records of the resulting disciplinary proceedings and warning. 4. Regarding the events of December 2023, the Respondent stated that it received complaints from Khiliji Construction Company Limited concerning discrepancies between fuel ordered and fuel delivered at the Bombolulu Station. The complaints related to transactions on 6th, 13th , 20th and 21st October 2023. The Respondent alleged that the PETECH system records did not correspond with the quantities reflected in the customer’s local purchase orders. The Respondent alleged a total short delivery valued at approximately Kshs.888.90. 5. Its witness, Mr. Huzefa Adamali, stated that he investigated the transactions and requested the Claimant and the pump attendants involved to record statements, but they declined. The Respondent’s position was that the Claimant, being the Assistant Supervisor, was responsible for confirming that the quantities recorded in the LPOs corresponded with the fuel dispensed through the pumps. 6. The Respondent stated that on 15th December 2023 it placed the Claimant on administrative leave to allow investigations to proceed. It alleged that: The Claimant refused to sign the administrative leave document; She failed to return to work; Human Resources repeatedly called her; She did not respond; and she instead engaged advocates who warned the Respondent against contacting her directly. 7. The Respondent issued a show cause letter dated 3rd January 2024. The allegations included: Absence from work from 16th December 2023; Failure to reconcile discrepancies between the LPOs and pump records; Insubordination; Failure or refusal to obey instructions; and suspected criminal conduct arising from the alleged short delivery of fuel. 8. On 13th January 2024, the Respondent invited the Claimant to a disciplinary hearing scheduled for 17th January 2024 and informed her of her right to be accompanied by another employee or shop-floor union representative. 9. The Claimant did not attend. The committee considered the allegations and her prior disciplinary record and recommended her dismissal for gross misconduct. The Respondent summarily dismissed her through the letter dated 29th January 2024. 10. It contended that the dismissal was substantively justified by misconduct and procedurally fair because the Claimant had been invited to respond to the allegations and attend a disciplinary hearing. **Issues for Determination** 1. Having considered the pleadings, oral evidence, documents and submissions, the issues for determination are: 2. Whether the Claimant’s employment was terminated on 15th December 2023; 3. Whether the termination was substantively justified; 4. Whether the Respondent followed a fair procedure; 5. Whether the Claimant was constructively dismissed; 6. Whether the Claimant is entitled to the reliefs sought; and 7. Who should bear the costs. **Analysis and Determination** Whether the Claimant’s employment was terminated on 15th December 2023 1. The parties agree that 15th December 2023 was the Claimant’s last day of active service. The evidence further establishes that on that date: Another employee had been placed in the Claimant’s position; The Claimant was instructed to hand over her responsibilities and accountable items; She executed a handover; She was instructed to return the following day to wind up; and when she returned, she was not permitted or enabled to resume her duties. The Respondent characterised these events as the commencement of administrative leave. 2. An employer is entitled, in appropriate circumstances, to remove an employee temporarily from active duty to facilitate investigations. However, where an employer relies on administrative leave to explain an employee’s exclusion from the workplace, it must demonstrate that the decision was clearly communicated to the employee. The administrative leave document relied upon by the Respondent does not bear the Claimant’s signature or acknowledgement. 3. Unlike the Claimant’s previous leave forms, it did not bear a clear acknowledgement by the Claimant. The Respondent also did not produce an email, WhatsApp message or other contemporaneous communication forwarding the alleged administrative leave decision to her. 4. During cross-examination, the Respondent’s witness conceded that there was no independent proof that the document was presented or communicated to the Claimant. The form merely stated “pending investigations” without identifying the allegations under investigation or clearly stating the duration and terms of the leave. 5. The Respondent had the Claimant’s telephone number and other contact details. It demonstrated its ability to communicate with her through WhatsApp when it sent subsequent disciplinary correspondence. No satisfactory explanation was offered for its failure to transmit the alleged administrative leave decision through those channels on or immediately after 15th December 2023. 6. The Respondent also did not pay the Claimant during the alleged administrative leave period. It did not pay her even for the admitted days worked in December 2023. Its witness explained that payment was withheld pending determination of what the Claimant might owe the company in relation to the alleged fuel shortages. That explanation indicates that the Respondent had already subjected the Claimant to an adverse financial consequence before concluding the disciplinary process. 7. The totality of the evidence demonstrates that the Respondent: Removed the Claimant from her position; Replaced her with another employee; Required her to hand over; Failed to allocate her work when she returned; Failed to communicate a definite administrative leave decision; Failed to pay her; and failed to clarify her employment status after receiving the demand dated 21st December 2023. 8. An employment relationship is determined not only by the words used by an employer, but also by the practical effect of the employer’s conduct. The practical effect of the Respondent’s conduct was to remove the Claimant from employment with effect from 15th December 2023. I therefore find that the Claimant’s employment was terminated by the Respondent on 15th December 2023. Whether the Respondent proved that the Claimant absconded duty 1. The Respondent’s defence was internally inconsistent. On the one hand, it asserted that the Claimant had been sent on administrative leave. On the other, it alleged that she had deserted or absconded duty. 2. An employee who has been directed by the employer to remain away from the workplace cannot simultaneously be accused of absconding merely because she did not report during the period in which she reasonably understood that she had been removed from duty. 3. More importantly, the Respondent did not produce: Call logs showing the alleged incessant calls; Letters directing the Claimant to resume duty; Emails asking her to explain her absence; WhatsApp messages issued between 15th and 31st December 2023 requiring her to report back; or any contemporaneous warning that continued absence would lead to disciplinary action. 4. During cross-examination, the Respondent’s witness admitted that no call logs or written communication proving the alleged efforts to recall the Claimant had been produced. 5. The Respondent received the first demand letter on 21st December 2023. That letter expressly alleged that the Claimant had been unlawfully terminated. A reasonable employer that genuinely believed the employee remained in employment but had absconded would have immediately clarified that: She had not been dismissed; She was required to resume work or remain on defined administrative leave; and failure to comply would attract disciplinary action. The Respondent did not do so. 6. The first formal show cause letter was dated 3rd January 2024, well after the Claimant had handed over, ceased working and issued her first demand. I therefore find that the allegation of abscondment was not proved. Whether there was a valid and fair reason for disciplinary action 1. The Respondent produced documents showing discrepancies between the quantities appearing in customer LPOs, delivery notes and the quantities recorded in the automated PETECH system. The documents related to transactions undertaken in October 2023 at the Bombolulu Station. 2. The Claimant was at the material time an Assistant Supervisor. The Respondent’s evidence was that her functions included ensuring that the quantity entered in the customer’s documentation corresponded with the quantity dispensed. 3. The documentary evidence was sufficient to give the Respondent a legitimate basis to investigate: Whether fuel had been short-delivered; Whether station procedures had been followed; Whether the Claimant had properly discharged her supervisory responsibilities; and whether disciplinary action was warranted. 4. An employer is not required to establish criminal liability beyond reasonable doubt before instituting disciplinary proceedings. It must, however, possess reasonable and sufficient grounds for its belief and thereafter subject those grounds to a fair disciplinary process. I am therefore satisfied that the Respondent had a potentially valid basis to commence investigations and disciplinary proceedings. 5. However, the existence of grounds for investigation is not equivalent to proof that the Claimant was personally responsible for the alleged short deliveries. The fuel was dispensed by several pump attendants. The Respondent’s evidence was that the Claimant was responsible for countersigning or confirming documentation. The documents did not conclusively establish that: The Claimant personally dispensed less fuel; She appropriated the difference; She colluded with the pump attendants or customer; She knowingly falsified the documents; or the alleged loss resulted from deliberate misconduct rather than error or system discrepancy. 6. The Respondent was entitled to investigate those matters, but it was required to hear the Claimant before reaching a final conclusion. I consequently find that the Respondent established a legitimate reason for commencing disciplinary proceedings but did not, before effecting the termination on 15th December 2023, establish the Claimant’s culpability through a fair process. Procedural fairness 1. Section 41 of the Employment Act requires an employer, before terminating employment on grounds of misconduct, to: Explain the allegations to the employee in a language the employee understands; Inform the employee that termination is under consideration; Permit the employee to be accompanied by another employee or shop-floor union representative; and hear and consider the employee’s representations before making the decision. 2. Sections 43 and 45 further require the employer to demonstrate a valid and fair reason and compliance with a fair procedure. 3. The Court in Walter Ogal Anuro v Teachers Service Commission stated that a termination must satisfy the twin requirements of substantive justification and procedural fairness. The Respondent itself relied on that authority. 4. In the present case, the Claimant was removed from active employment on 15th December 2023. The show cause letter was dated 3rd January 2024. The invitation to a disciplinary hearing was dated 13th January 2024. The hearing was scheduled for 17th January 2024. The summary dismissal letter was dated 29th January 2024. 5. By the time the Respondent issued the show cause letter and disciplinary invitation: The Claimant had already been replaced; She had already handed over; She had ceased working for several weeks; She had not been paid; She had issued a formal demand alleging termination; and the Respondent had not expressly recalled her or restored her to her position. 6. The disciplinary process therefore commenced after the Respondent had, through its conduct, already brought the employment relationship to an end. A hearing conducted after termination cannot retrospectively cure the absence of a hearing before termination. The Respondent argued that the Claimant remained its employee until 29th January 2024. That position is inconsistent with: Its failure to pay her salary; Its failure to communicate the alleged administrative leave; Its failure to recall her; Its replacement of her at the station; and its failure to respond promptly when informed that she regarded herself as terminated. I therefore find that the Respondent did not comply with section 41 before terminating the Claimant’s employment. The termination was procedurally unfair. Constructive dismissal 1. Constructive dismissal ordinarily arises where an employer commits a fundamental breach of the employment contract, compelling the employee to resign or abandon the contract in response to that breach. 2. In the present case, the Claimant did not resign. She reported to work but was replaced, required to hand over and prevented from continuing with her duties. The more accurate characterisation is that the Respondent directly terminated the employment relationship through its conduct. 3. Although the Claimant’s removal bore some features associated with constructive dismissal, a separate declaration of constructive dismissal is unnecessary. The Court will instead declare that the Respondent unlawfully and unfairly terminated the Claimant’s employment on 15th December 2023. **Reliefs** 1. Compensation for unfair termination- Under section 49(1)(c) of the Employment Act, the Court may award compensation not exceeding twelve months’ gross remuneration. In determining the appropriate award, I have considered: The Claimant had served the Respondent for approximately nine years; She had risen from Pump Attendant to Assistant Supervisor; The manner in which she was removed was abrupt and inadequately communicated; She was not heard before being replaced and required to hand over; She was not paid even the admitted salary for the days worked; The Respondent delayed in clarifying her status; The Claimant stated that she had not secured alternative employment; There were nevertheless legitimate fuel-discrepancy allegations requiring investigation; The Claimant had a prior disciplinary record; and maximum compensation is therefore not warranted. The proved monthly remuneration comprised: Basic salary: Kshs.23,413; and House allowance: Kshs.3,512. Her gross monthly remuneration was therefore Kshs.26,925. Considering the circumstances in their entirety, an award equivalent to eight months’ gross remuneration is fair. The Claimant is awarded: Kshs.26,925 × 8 = Kshs.215,400. 1. Salary in lieu of notice- Since the termination was not preceded by notice, the Claimant is entitled to one month’s salary in lieu of notice. She is awarded: Kshs.26,925. 2. Unpaid salary for December 2023- The Respondent’s summary dismissal letter acknowledged that the Claimant was entitled to payment for 14 days worked in December 2023. In her submissions, the Claimant quantified this head at Kshs.11,706.50, based on her basic salary. The Respondent did not produce evidence of payment. The Claimant is therefore awarded: Kshs.11,706.50. 3. Accrued leave- The Respondent’s summary dismissal letter acknowledged 39.5 leave days earned but not taken. Although the Respondent later submitted that no leave was outstanding, that submission is inconsistent with its own termination document. The Claimant calculated the amount using a daily basic salary of Kshs.780.43: Kshs.780.43 × 39.5 = Kshs.30,827.17. The Claimant is awarded: Kshs.30,827.17. 1. Off days worked- The Respondent’s summary dismissal letter similarly acknowledged 33 pending off days. The Claimant calculated the amount at the basic daily rate: Kshs.780.43 × 33 = Kshs.25,754.19. 1. Certificate of service- A certificate of service is a statutory entitlement under section 51 of the Employment Act. The Respondent shall issue the Claimant with a certificate of service within thirty days of this judgment. 2. Costs and interest- The Claimant has substantially succeeded in her claim and is awarded costs. The monetary award shall attract interest at court rates from the date of judgment until payment in full. The award shall be subject to statutory deductions where applicable. **Final Orders** 1. Judgment is entered for the Claimant against the Respondent as follows: Eight months’ compensation for unfair termination Kshs.215,400.00 One month’s salary in lieu of notice Kshs.26,925.00 Unpaid salary for December 2023 Kshs.11,706.50 Accrued leave – 39.5 days Kshs.30,827.17 Pending off days –33 days Kshs.25,754.19 **Total Kshs.310,612.86** 1. Accordingly, the Court makes the following final orders: 2. A declaration is hereby issued that the Respondent unlawfully and unfairly terminated the Claimant’s employment on 15th December 2023; 3. The prayer for a separate declaration of constructive dismissal is declined, the Court having found that the Respondent directly terminated the employment relationship through its conduct; 4. The Respondent shall pay the Claimant Kshs.310,612.86; 5. The Respondent shall issue the Claimant with a certificate of service within thirty days; 6. The Claimant shall have the costs of the suit; and 7. The monetary award shall attract interest at court rates from the date of judgment until payment in full. Orders accordingly. **DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOSFT TEAMS AT MOMBASA THIS 30TH JULY 2026.** **……………………………………………….** **EMILY M. MWAMUYE** **SENIOR RESIDENT MAGISTRATE**