https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1926

Orori v Kamny Industries Ltd (Employment and Labour Relations Appeal E194 of 2025) [2026] KEELRC 1926 (KLR) (3 July 2026) (Judgment) Neutral citation: [2026] KEELRC 1926 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Appeal E194 of 2025 JW Keli, J July 3, 2026 Between Richard Okari Orori Appellant and Kamny Industries Limited Respondent (eing an Appeal from the Judgment and Decree of the Hon. D. Milimu (SRM) delivered on 19th May 2025 in Thika MCELRC No. 039 of 2023) Judgment 1.The Appellant herein, being dissatisfied with the Judgment and Decree of the Hon. D. Milimu (SRM) delivered on 19th May 2025 in Thika MCELRC No. 039 of 2023 between the parties filed a Memorandum of Appeal dated the 13th June 2022 seeking the following orders: -a.This Honourable court do proceed to compensate the appellant for service gratuity for 39 years worked in the Respondent's Company.b.Costs of the Appeal before this Honourable court be awarded to the Claimant. Grounds of the Appeal 2.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent vide paragraph 3 and 4 of their Memorandum of response in the court below, agreed to engage the Appellant in the year 1982 and the letter of appointment dated 1/2/1982 in the claimant's list of documents dated 21st December 2023, produced as exhibit in the court below. 3.The Honourable Trial Magistrate erred in law in not appreciating the fact that the Respondent wrote various letters demonstrating that the appellant was a permanent employee, namely letters dated 24/01/2018, 2/02/2015 and 21/09/2012 in the claimant's further list of documents dated 6/5/2024 in the court below, which were produced as exhibits. 4.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent constantly remitted monthly contributions to N.S.S.F as shown by the N.S.S.F provisional member statement of account in the claimant's further list of documents dated 6/5/2024 in the court below. 5.The Honourable Trial Magistrate erred in law and in fact in not considering the annual leave form produced in the claimant's list of documents dated 21st December 2023 in the court below as evidence that the appellant was a permanent employee of the Respondent. 6.The Honourable Trial Magistrate erred in law and in fact in failing to appreciate that the Respondent did not produce an acknowledgement that the appellant signed to receive his service gratuity for the years worked and/or any written agreement on payment of service gratuity. 7.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent did not produce a document and/or letter for dismissal when the Appellant deserted employment as alleged vide paragraph 4 of the Memorandum of Response dated 13/3/2024 in the court below. 8.The Honourable Trial Magistrate erred in law and in fact in failing to appreciate that the legal ingredients in an issue of paying service gratuity for 39 years worked had been proved by the Appellant. 9.The Honourable Trial Magistrate erred in law and in fact in basing her findings on conjectures, suppositions and in extraneous matters. 10.The Honourable Trial Magistrate erred in law and in fact in not making a finding on the service gratuity for the period when the Appellant was employed by the Respondent. 11.The Honourable Trial Magistrate erred in law and in fact in failing to adjourn the matter on the first hearing on the part of the claimant in the court below on 27/01/2025 and ruled that the matter to proceed to defence hearing on the same date without having chance for the claimant's advocates on record to prepare adequately for the defence hearing. Background to the Appeal 12.The Claimant/Appellant filed a claim against the Respondent vide a memorandum of claim dated the 21st of December 2023 seeking the following orders: -a.A declaration be and is hereby issued that the acts of the Respondent complained of above amounted to constructive dismissal of the Claimant.b.An award of 12 months’ gross salary equivalent of Kshs. 531, 835/- as compensation for unlawful/unfair termination.c.An award of one (1) month’s gross salary equivalent to Kshs. 44,318.75 being payment in lieu of notice.d.An award of Kshs. 1,635,364.50 being payment for 1170 outstanding leave days for the entire period of employment.e.An award of Kshs. 1,728,431.25 being service gratuity calculated at one month’s salary for each completed year of service (39 years).f.An order for the Respondent do provide the Claimant with a retirement letter and amend the certificate of service dated 1st March 2021 to have a proper year of employment and be provided to the Claimant.g.Costs of the suit.h.Interests on prayers (b), (c), (d) and (e) at court’s rates.(pages 5-7 of Appellant’s ROA dated 26th September 2025) 13.The Claimant/Appellant filed his list of witnesses dated 21st December 2023; witness statement of even date; and list of documents of even date with the bundle of documents attached (pages 9-25 of ROA). They later filed a list and bundle of documents dated 6th May 2024 (pages 35-43 of ROA). 14.The claim was opposed by the Respondent who entered appearance and filed a memorandum of response dated 13th March 2024 (pages 31-34 of ROA). They also filed a witness statement dated 23rd August 2024; and list and bundle of documents dated 29th August 2024 (pages 48-160 of ROA). The Respondent later filed a further list and bundle of documents dated 8th September 2024 (pages 163-167 of the ROA). 15.The Claimant/Appellant’s case was heard on 27th January 2025 with the Claimant testifying. He adopted his filed witness statement as his evidence in chief, and produced his documents as exhibits. He was cross-examined by counsel for the Respondent, Mr. Ondigi (pages 284-289 of ROA). 16.The Respondent’s case was heard on the same day with one FRANCIS WACHIRA testifying on behalf of the Respondent as DW1. He produced the Appellant’s documents as exhibits, and was cross-examined by counsel for the Claimant/Appellant Ms. Kariuki (pages 291-293 of ROA). 17.The court delivered its Judgment on 19th May 2025 dismissing the Claimant/Appellant’s suit, save for the prayer for a certificate of service and half of the costs of the suit (judgment at pages 296-307 of ROA). Determination 18.The appeal was canvassed through written submissions. Both parties filed. Issues for determination 19.In his submissions dated 14th April 2026, the Appellant submitted generally on the appeal. 20.Similarly, the Respondent submitted generally on the grounds of appeal in their submissions dated 21st May 2026. 21.The court proceed on the issue of whether the appeal had merit. 22.This being a first appellate court, it was held in Selle v Associated Motor Boat Co. [1968] EA 123 that:- “The appellate court is not bound necessarily to accept the findings of fact by the court below. An appeal to the Court of Appeal from a trial by the High Court is by way of a retrial and the principles upon which the Court of Appeal acts are that the court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular the court is not bound necessarily to follow the trial Judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.” 23.Further in on principles for appeal decisions in Mbogo V Shah [1968] EA Page 93 De Lestang V.P (As He Then Was) Observed At Page 94:“I think it is well settled that this court will not interfere with the exercise of its discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.’’ 24.The grounds of appeal were as follows-a.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent vide paragraph 3 and 4 of their Memorandum of response in the court below, agreed to engage the Appellant in the year 1982 and the letter of appointment dated 1/2/1982 in the claimant's list of documents dated 21st December 2023, produced as exhibit in the court below.b.The Honourable Trial Magistrate erred in law in not appreciating the fact that the Respondent wrote various letters demonstrating that the appellant was a permanent employee, namely letters dated 24/01/2018, 2/02/2015 and 21/09/2012 in the claimant's further list of documents dated 6/5/2024 in the court below, which were produced as exhibits.c.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent constantly remitted monthly contributions to N.S.S.F as shown by the N.S.S.F provisional member statement of account in the claimant's further list of documents dated 6/5/2024 in the court below.d.The Honourable Trial Magistrate erred in law and in fact in not considering the annual leave form produced in the claimant's list of documents dated 21st December 2023 in the court below as evidence that the appellant was a permanent employee of the Respondent.e.The Honourable Trial Magistrate erred in law and in fact in failing to appreciate that the Respondent did not produce an acknowledgement that the appellant signed to receive his service gratuity for the years worked and/or any written agreement on payment of service gratuity.f.The Honourable Trial Magistrate erred in law and in fact in not appreciating the fact that the Respondent did not produce a document and/or letter for dismissal when the Appellant deserted employment as alleged vide paragraph 4 of the Memorandum of Response dated 13/3/2024 in the court below.g.The Honourable Trial Magistrate erred in law and in fact in failing to appreciate that the legal ingredients in an issue of paying service gratuity for 39 years worked had been proved by the Appellant.h.The Honourable Trial Magistrate erred in law and in fact in basing her findings on conjectures, suppositions and in extraneous matters.g.The Honourable Trial Magistrate erred in law and in fact in not making a finding on the service gratuity for the period when the Appellant was employed by the Respondent.g.The Honourable Trial Magistrate erred in law and in fact in failing to adjourn the matter on the first hearing on the part of the claimant in the court below on 27/01/2025 and ruled that the matter to proceed to defence hearing on the same date without having chance for the claimant's advocates on record to prepare adequately for the defence hearing. On the Claim of service gratuity 25.The appellant accused the trial court of not taking into consideration he was in continuous employment. It is my role as first appellate court to re-evaluate the evidence before the trial court and reach my own conclusion on all the above grounds of appeal. The court finds the end result sought in the appeal is payment of service gratuity. 26.The appellant stated that his period of employment with the respondent was from 1st February 1982 to 24th August 2020, when he was ordered to proceed on terminal leave by the Respondents' Human Resources Officer. No formal letter was issued. He was provided with a certificate of service dated 1st March 2021. He had reached retirement age. He also mentioned that he was paid his salary for February 2021, which was also considered his terminal benefits. His terminal leave commenced on 28th August 2020 and was extended several times until 2nd February 2021, when he retired without receiving a retirement letter. He claims he was not under any pension fund, hence claiming service gratuity. Exhibit 14 was the leave form dated 22nd August 2020, with the report dates extended, the last being 2nd February 2021 (page 18 of ROA). The payslip for February 2021, showing terminal dues, was marked as Exhibit 5 (page 19 of ROA). 27.The certificate of service was produced by the respondent, indicating employment from 16th April 2019 to 28th February 2021 (page 20 of ROA). To challenge the certificate of service, the Appellant provided a letter of employment dated 1st February 1982 (page 13 of ROA) and letters of the respondent’s company relocation from various places dated 01/07/2013, 01/04/2013, 01/07/2014, and 15/02/2019 (pages 14–17 of ROA). 28.The Appellant further produced a demand letter regarding termination benefits dated 11th December 2026, indicating he was born in 1959. The court finds that the substantive prayer on appeal is for service for 39 years only. 29.The Respondent entered an appearance and filed. The response was to the effect that he was employed in 1982 but deserted, only to return in 2002. He was then issued with a fresh contract dated 1st March 2008 (page 61 of ROA). The Respondent produced letters of recommendation of the Appellant for employment dated 8th December 1990. Letter of appointment dated 2-01-1991. Letter of recommendation dated 01/09/1991, letter of temporary contract dated 17/01/2007, letter dated 15th January 2019, being a termination of permanent employment with service pay from 2008 March indicated as the year of employment (page 64 of ROA.). The employer produced the Appellant’s leave claims (page 65 – 75). 30.The Respondent produced further contracts one ending 15th July 2019 accepted by the Appellant on 16th April, 2019, and a contract dated 1st April 2020 for 3 months. The employer also produced a discharge and release dated 11th March 2021, where the terminal dues of Kshs. 9,375 were paid. (see page 82 and clearance form page 83). 31.The trial court found as follows:-“This letter was signed by the claimant in acknowledgement on 15/1/2019.It is thus clear, that the only letter that made the claimant a "full", permanent and pensionable employee was the letter dated 1/3/2008 as evidenced by clause 5 of the letter. Thus, the claimant was not employed for 39 consecutive years as he claims. He was employed on multiple contracts, and then finally as a permanent and pensionable employee, with the same being terminated, after 11 years, as per the terms of the 2008 contract, with 3 months' notice which he acknowledged.He then signed the following short-term contracts: Signed on 16/4/2019 which would automatically cease on 15/7/2019. Signed on 8/4/2020 which would automatically cease on 30/6/2020. After all this, he signed an acknowledgment of discharge and release on 11/3/2021 releasing the respondent from any further claims/demands that may arise out of his employment based on the payment referenced therein.Thus, the claimant's claim that he was employed for 39 consecutive years has been disproven on a balance of probabilities.” (see page 300 of ROA) 32.Having evaluated the evidence as above and considered the provisions of section 76(1) of the Evidence Act and section 2 of the Employment Act as cited by the trial court, I find that the trial court's decision was sound on both facts and law. The period of service was not 39 years but from 2008 to 2019, when the permanent contract was mutually terminated, plus the period up to 30th June 2020. 33.Regarding whether he was entitled to service gratuity, I find that the trial court correctly applied section 35 (5) and (6) of the Employment Act to conclude that, having been on NSSF, the appellant was not eligible for the service gratuity. Section 35 (5) and (6) of the Employment Act reads: -‘(5) An employee whose contract of service has been terminated under subsection (1)(c) entitled to service pay for every year worked, the terms of which shall be fixed. (6) This section shall not apply where an employee is a member of— shall be (a) a registered pension or provident fund scheme under the Retirement Benefits Act; (b) a gratuity or service pay scheme established under a collective agreement; (c) any other scheme established and operated by an employer whose terms are more favourable than those of the service pay scheme established under this section; and (d) the National Social Security Fund.’ 34.The cross appeal was struck off vide Ruling dated 24th March 2026. The Appeal is held to lack merit and is dismissed. To temper mercy with justice, this being a claim by a retiree, I make no order as to costs. 35.The file is marked as closed. DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 3RD DAY OF JULY, 2026.JEMIMAH KELI,JUDGE.In The Presence Of:Court Assistant: OtienoRespondent- Ms Kariuki OwesiAppellant - Absent