https://new.kenyalaw.org/akn/ke/judgment/keca/2026/912
The Court held that the trial judge correctly exercised discretion in awarding three months' salary under section 49 because the alleged discrimination was part of the flawed redundancy process and not a separate actionable wrong supported by independent evidence. The appellant also failed to show any basis for...
Source-derived case information.
- Citation
- [2026] KECA 912 (KLR)
- Parties
- Appellant: Swaleh Baaker Abdulrahman; Respondent: Transafrica Motors Limited
- Court
- Court of Appeal
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal E141 of 2023
- Procedural Posture
- Civil Appeal From ELRC Judgment on Redundancy/discrimination and Unfair Termination / Judgment on Appeal
- Outcome
- Appeal dismissed; ELRC judgment upheld
- Judges
- ["AK Murgor", "KI Laibuta", "GW Ngenye-Macharia"]
- Legal Topics
- Redundancy, Discrimination in Employment, Unfair Termination, Costs, Appellate Interference With Discretion, Section 49 Remedies, Section 40 Employment Act Compliance
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Swaleh Baaker Abdulrahman
Appellant
Transafrica Motors Limited
Respondent
Procedural Posture
Civil Appeal From ELRC Judgment on Redundancy/discrimination and Unfair Termination / Judgment on Appeal
Legal Issues
- 1 Whether the ELRC erred in awarding only three months' salary as damages instead of the compensation claimed for wrongful termination and discrimination.
- 2 Whether discrimination during redundancy was a distinct basis for additional damages separate from the termination remedy.
- 3 Whether the ELRC erred in ordering each party to bear its own costs.
Ratio Decidendi
The Court held that the trial judge correctly exercised discretion in awarding three months' salary under section 49 because the alleged discrimination was part of the flawed redundancy process and not a separate actionable wrong supported by independent evidence. The appellant also failed to show any basis for additional general damages or for interference with the costs order, especially because his substantial monetary claim failed and the respondent substantially succeeded in proving payment of terminal dues.
Court Disposition
Appeal dismissed; ELRC judgment upheld
Orders
- Appeal dismissed in its entirety.
- Judgment of the Employment and Labour Relations Court dated 25th May 2023 upheld.
Full Case Text
Judgment text and source record
1 paragraphs
Abdulrahman v Transafrica Motors Limited (Civil Appeal E141 of 2023) [2026] KECA 912 (KLR) (15 May 2026) (Judgment) Neutral citation: [2026] KECA 912 (KLR) Republic of Kenya In the Court of Appeal at Mombasa Civil Appeal E141 of 2023 AK Murgor, KI Laibuta & GW Ngenye-Macharia, JJA May 15, 2026 Between Swaleh Baaker Abdulrahman Appellant and Transafrica Motors Limited Respondent (Being an appeal from the Judgment and Decree of the Employment and Labour Relations Court at Mombasa (Monica Mbaru, J.) delivered on 25th May 2023 in E.L.R.C Case No. E059 of 2022 Cause E059 of 2022 ) Judgment 1.Before us is an appeal from the judgment and decree of the Employment and Labour Relations Court (the ELRC) at Mombasa (Monica Mbaru, J.) delivered on 25th May 2023 in ELRC Case No. E059 of 2022 in which the appellant (Swaleh Baakeer Abdulrahman) sued the respondent, his former employer, namely Transafrica Motors Limited, vide a Memorandum of Claim dated 4th July 2021 challenging the termination of his employment on grounds of redundancy and alleging discrimination and unfair labour practices. 2.The appellant’s case was that he was employed by the respondent as an accountant with effect from 10th July 2014 at a net salary of Kshs. 40,000 per month, which rose to a gross salary of Kshs. 57,817 by the time his employment was terminated on 11th April 2022; that, throughout his service, he discharged his duties professionally and diligently; that his responsibilities included overseeing management accounts, financial reporting, tax compliance, business and financial analysis, budgeting, and reporting to management; and that, by virtue of his position, he was at all material times fully conversant with the respondent’s financial standing. 3.According to the appellant, the respondent was financially stable and experiencing growth up to the time of his termination; that, for example, between January and March 2022, the respondent allegedly registered a turnover of more than Kshs. 671 million, which, in his view, demonstrated growth rather than downturn; that the respondent had made substantial savings through systematic and deliberate under-declaration of tax liabilities payable to the Kenya Revenue Authority, which improved its financial stability; and that there was no genuine financial crisis to justify redundancy. 4.The appellant further averred that, on 11th March 2022, without prior notification or due process, he was summoned to the Administration Manager’s office and served with a letter expressing the respondent’s intention to terminate his employment on grounds of redundancy; that this was followed by a termination letter dated 11th April 2022; that, when he questioned the rationale for his termination, the Administration Manager admitted that his employment record was clean, and that there were no complaints about his performance, but that there were instructions to terminate his employment notwithstanding his performance; that the reason cited in the termination letter, namely business downturn and operations not meeting expenditure, was a mere pretext; that the respondent had in fact recruited more than fifteen additional employees within a period of about six months, including staff in the Finance Department, thereby negating any claim of excess manpower or business decline; that, although the redundancy was said to have affected his department, he was the only one who was targeted, which amounted to ill motive, harassment, victimization and discrimination; and that, even after termination, the respondent continued to harass him by sending agents to search his residence and personal businesses, which infringed his constitutional rights. 5.The appellant further contended that the redundancy process contravened section 40 of the Employment Act, 2007 (the Act) and the ILO Convention No. 158 on Termination of Employment. He stated that he was not invited to any consultative meeting, nor was he informed of the criteria used in selecting him, and that his seniority was disregarded in favour of junior employees with less than one year’s service contrary to section 40(1) (c) of the Act. According to the appellant, his selection was discriminatory, unfair, and calculated to defeat his legitimate expectation to serve until the mandatory retirement age of sixty years. He contended that the respondent’s actions were in contravention of section 5(3) of the Act and Article 27(4) of the Constitution. 6.By reason of the matters aforesaid, the appellant prayed for judgment against the respondent for a declaration that termination of his employment was wrongful, unlawful, unfair, null and void; compensation equivalent to twelve months’ salary amounting to Kshs. 693,804; general damages for harassment, discrimination and infringement of his constitutional rights in the sum of Kshs. 2,081,412; compensation for the alleged twenty-two years remaining until retirement amounting to Kshs. 15,263,688 (bringing the total sum claimed to Kshs. 18,038,904); interest on the monetary awards; costs of the suit; and any other relief the court deemed fit to grant. 7.The respondent, represented by the Federation of Kenya Employers, filed a Memorandum of Response dated 30th October 2022 admitting that the appellant was engaged on 10th July 2014, but denied the substantive allegations contained in the Memorandum of Claim. Its case was that the Covid-19 pandemic occasioned a drastic downturn in its business, thereby necessitating reduction of its workforce in order to remain afloat; that there were a total of nineteen staff, including the appellant, whose positions were declared redundant; that, within the Accounts Department, seven members of staff were laid off, reducing the number from thirty to twenty-three; and that the appellant was therefore not the only employee affected by the redundancy. 8.With regard to the procedure followed, the respondent averred that, when it realised the need to downsize, it wrote to the Ministry of Labour on 11th February 2022 notifying the Ministry of the intended redundancy; and that the appellant was appropriately informed on 11th March 2022 of the intended redundancy and subsequently issued with a termination letter dated 11th April 2022 in compliance with the law. In addition to the foregoing, the respondent denied having recruited any new staff to replace the appellant and averred that the appellant’s roles and duties were merged with and taken over by the Finance Controller, who had previously supervised him. 9.Regarding the selection process, the respondent averred that members of staff in the Accounts Department were also affected, and that there was no discrimination; that due diligence was exercised when considering skills, ability and reliability; that the appellant did not have a clean employment record, having previously been issued with several warning letters concerning lateness and performance of his duties, including a warning letter dated 18th February 2019 relating to tax shortfalls that led to heavy fines by the tax authorities; that senior management opted to include the appellant in the redundancy list due to his poor record as evidenced by four warning letters in his file; and that there was a valid reason for the appellant’s selection. 10.The respondent further averred that, upon redundancy, the appellant’s dues were computed and paid; that the dues comprised salary for days worked, pending leave days, one month’s notice and severance pay, all amounting to Kshs. 262,286.47, less statutory deductions of Kshs. 72,754.20, leaving a net sum of Kshs. 189,632.18; that this amount was duly paid and acknowledged by the appellant on 19th April 2022; and that he was also issued with a certificate of service and executed a discharge voucher. 11.The respondent contended that redundancy is a managerial prerogative as long as it is exercised within the confines of the law; that the redundancy was valid and carried out in accordance with section 40 of the Employment Act, 2007; and that the appellant was not entitled to any of the reliefs sought. Accordingly, the respondent prayed that the appellant’s suit be dismissed with costs. 12.The matter proceeded for hearing on 27th April 2023. The appellant gave oral evidence in support of his case while the respondent failed to call any witness. 13.In its judgment dated 25th May 2023, the ELRC (Monica Mbaru, J.) observed that redundancy under section 2 of the Act concerns loss of employment through no fault of the employee, and is distinct from termination for misconduct, poor performance or gross misconduct under sections 41 and 44 of the Act. The court found that the respondent’s reliance on the appellant’s alleged poor record and warning letters in selecting him for redundancy blurred this distinction and suggested that redundancy had been used to mask disciplinary concerns, which was improper and unlawful. 14.The court further found that, although the respondent claimed that seven employees were laid off, the notice to the Minister only referenced the appellant. The court held that redundancy applied against a single employee in such circumstances was discriminatory and an unfair labour practice; that, pursuant to section 5(7) of the Act, the burden shifted to the respondent to prove that discrimination did not take place; and that, having failed to call any evidence at the trial, the respondent failed to discharge this burden. Consequently, the court found that the respondent had discriminated against the appellant by singling him out for redundancy without lawful justification. Accordingly, the court declared that the appellant was discriminated against and awarded him damages equivalent to three months’ gross salary, amounting to Kshs. 173,451. The court declined to award additional sums for days worked, leave pay, notice pay, and service pay, finding that these had already been settled in accordance with the termination letter and the claimant’s own tabulation of his terminal dues. Each party was ordered to bear their own costs. 15.Aggrieved by the learned Judge’s decision, the appellant moved to this Court on appeal vide a Memorandum of Appeal dated 19th June 2023 on the following grounds, namely:“ 1.That having found that the Respondent failed to adhere and comply with the mandatory conditions set out in Section 40 of the Employment Act 2007 in terminating the Claimant's employment contract on account of redundancy, the learned trial Judge erred in law and in fact by not awarding the Claimant compensation for wrongful and unlawful termination as set out in Section 49(1) (c) as read together with Section 50 of the Employment Act 2007. 2.That having found that the Claimant was discriminated against by the Respondent contrary to the provisions of Section 5 (7) (c) of the Employment Act 2007 by picking him alone out of all the other employees for unlawful layoff under the guise of redundancy, the learned trial Judge erred in law and fact by awarding him damages of only three month's salary amounting to Kshs. 173,451 instead of the amount claimed in the Memorandum of Claim dated 4th July 2021. 3.That having concluded that the Claimant was unlawfully and unfairly terminated, and the Claimant having therefore been successful in his suit against the Respondent, the learned trial Judge erred in law and fact by not awarding the Claimant the costs of the suit.” 16.On the grounds aforesaid, the appellant prays that the appeal be allowed; that the award in the judgment be set aside and substituted for an award of compensation for unlawful termination equivalent to twelve months’ salary amounting to Kshs. 693,804 and damages at Kshs. 2,081,412; and orders that the respondent do pay costs in the trial court and in this appeal. 17.In support of the appeal, learned counsel, M/s. Akanga Alera and Associates, filed written submissions and a list of authorities dated 7th February 2024. On their part, learned counsel for the respondent, Mr. Kirui of M/s. Kirui Kamwibua & Company, did not file any written submissions, but nonetheless made oral submissions when the appeal came up for hearing on the Court’s virtual platform on 17th December 2025. 18.This Court’s mandate on first appeal was espoused in Ng’ati Farmers’ Co-Operative Society Ltd v Ledidi & 15 Others [2009] KLR 331 as follows:“An appeal to this Court from a trial by the High Court is by way of re-trial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that, this 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 witness and should make due allowance in that respect. In particular, this 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 demeanour of a witness is inconsistent with the evidence in the case generally.” 19.This mandate was underscored in the case of Kenya Ports Authority v Kuston (Kenya) Limited [2009] 2 EA 212 as follows:“On a first appeal from the High Court, the Court of Appeal should 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 that respect. Secondly that the responsibility of the court is to rule on the evidence on record and not to introduce extraneous matters not dealt with by the parties in the evidence.” 20.However, we are conscious as cautioned by the predecessor to this Court in Peters v Sunday Post Ltd [1958] EA 424 that:“It is a strong thing for an appellate court to differ from the finding, on a question of fact, of the judge who tried the case and who has had the advantage of seeing and hearing the witnesses. An appellate court has, indeed, jurisdiction to review the evidence in order to determine whether the conclusion originally reached upon that evidence should stand. But this is a jurisdiction which should be exercised with caution. It is not enough that the appellate court might itself have come to a different conclusion.” 21.In our view, the main issues that fall for our determination are: whether the learned Judge erred by not awarding compensation as prayed, and by awarding damages of three months’ salary instead of the amount claimed; and whether the learned Judge erred by not awarding the appellant costs of the suit. 22On the 1st issue as to whether the learned Judge was at fault in declining to award the sums claimed by the appellant, we take to mind the learned Judge’s reasoning in the impugned judgment in which she held that the respondent had discriminated against the claimant without justification, having singled him out from among other employees for retrenchment under the pretext of redundancy, and that such conduct was unlawful. 23On the question of quantum, the learned Judge noted that the claimant's last drawn salary was Kshs. 57,817 per month, and that he had been in the respondent's employment for a period exceeding seven years. The learned Judge was accordingly satisfied that an award of damages equivalent to three months' gross salary, amounting to Kshs. 173,451, was appropriate in the circumstances. 24.Regarding the ancillary claims for payment of days worked, notice pay and severance pay, the learned Judge observed that the respondent had, by the termination letter dated 11th April 2022, offered to settle those dues, and that the same had in fact been paid, subject only to lawful statutory deductions. The learned Judge therefore found that it was not justified for the claimant to pursue those claims further. 25.Consequently, the learned Judge entered judgment in favour of the claimant and against the respondent on the following terms: first, a declaration that the claimant had been discriminated against by the respondent; second, an award of damages in the sum of Kshs. 173,451; and third, that each party bears its own costs. 26.Taking issue with the learned Judge’s decision, counsel for the appellant submitted that section 12(3) of the Employment and Labour Relations Court Act, 2011 vests in the trial court the power to award both damages and compensation as separate and distinct remedies; that that provision is further reinforced by Rule 28(1) of the Employment and Labour Relations Court (Procedure) Rules, 2016, which empowers the court to issue various orders, including an order for payment of costs and any other order necessary to meet the ends of justice; and that the court is accordingly competent to make awards for both damages and compensation as contemplated under section 12(3) of the Employment and Labour Relations Court Act, provided that such awards are directed at meeting the ends of justice; that the damages awarded to the appellant were in respect of the specifically pleaded discrimination visited upon him by the respondent in contravention of section 5 of the Employment Act, 2007, which constitutes a serious human rights violation under the Bill of Rights pursuant to Article 27 of the Constitution. 27.Counsel further submitted that wrongful termination had equally been pleaded by the appellant in the body of his Statement of Claim, and that the two infractions being distinct, each ought to attract its own separate remedy; that the appellant's specific and distinct pleadings were guided by rule 4(1) of the Employment and Labour Relations Court (Procedure) Rules, 2016 which provides that a statement of claim must set out, among other matters, the facts and grounds of the claim, the issues alleged to have been violated, infringed, breached or not observed, the rights of the employee not granted or to be granted, and the relief sought; and that the termination of the appellant's employment had curtailed his right to work, a loss that calls for compensation as a measure of mitigation. 28.In support of the foregoing, counsel placed reliance on the decision in Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 others [2014] KECA 404 (KLR) for the proposition that section 49(1)(c) of the Employment Act provides for the payment of compensation not exceeding the equivalent of twelve months' gross salary as an alternative remedy to reinstatement, available to an employee whose services have been wrongfully terminated. 29.In rebuttal, learned counsel for the respondent submitted that section 49 of the Act gives the trial court the discretion to determine what remedies to grant; that, unless it is shown that the exercise of the discretion was wrongfully applied, this Court cannot disturb that discretion; and that the appellant has not raised any issue as regards the exercise of the trial court’s discretion, or how the court misdirected itself in awarding three months’ salary under section 49 of the Act. According to counsel, the court exercised its discretion in making a global award for the pleaded discrimination and unlawful termination. 30.We take to mind the provision of section 50 of the Act, which reads:“ 50.Courts to be guidedIn determining a complaint or suit under this Act involving wrongful dismissal or unfair termination of the employment of an employee, the Employment and Labour Relations Court shall be guided by the provisions of section 49. 32.Section 49(1) of the Act sets out the remedies for wrongful dismissal and unfair termination by way of payment by the employer to the employee of 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; orc).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”. 32.In Kenfreight (EA) Limited v Nguti [2019] KESC 79 (KLR), the Supreme Court emphasized that the court’s decision to give awards under section 49 of the Act is discretionary in nature. The learned Judges took the view that:“ 32.When giving an award under section 49 of the Employment Act, a court of law is expected to exercise judicial discretion on what is fair in the circumstances. The Black’s Law Dictionary 9th edition at page 534 defines judicial discretion as follows:‘the exercise of judgment by a judge or court based on what is fair under the circumstances and guided by the rules and principles of law; a court’s power to act or not to act when a litigant is not entitled to demand the act as a matter of right’ 33.On an award on damages, the Act limits the award a court of law can make to a maximum of 12 months’ salary. In as much as the trial court therefore does have a discretion in the quantum of damages to award for unfair or wrongful termination of employment, it must be guided by the principles and parameters set under sub-section 4 of section 49 of the Employment Act …. 34.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.” 35.While section 49 of the Act is the primary statutory provision that guides the ELRC in determining the appropriate remedies to grant for unfair or unlawful termination, the court has additional remedial powers under section 12(3) of the Employment and Labour Relations Court Act to make various other orders, including compensation, damages, and “any other appropriate relief as the Court may deem fit to grant”, in accordance with the provisions of the Constitution or other written law. However, a proper basis must be laid to justify the grant of additional remedies beyond those specifically provided for under section 49 of the Act. 36.In Rift Valley Railways (K) Limited v William Nembe Obora & 74 others [2016] KECA 69 (KLR), this Court faulted the ELRC’s decision to make an order for 8 months’ salary as compensation for the time the claimants had been out of employment until the date when the court became seized of the matter, in addition to an award of 12 months’ salary on the basis of section 49(1) (c) of the Act, holding that:“(67)Section 12(3) of the Employment Act and Labour Relations Court Act (E & LRCA), appears to extend the remedies envisaged under the entire section 12 (3) and section 49 of the Employment Act. In our view, section 12 defines the general jurisdiction of the Employment and Labour Relations Court. That court under Section 12 (3), (v) and (vi) has power to award compensation and damages and section 49 enumerates the remedies the same court may grant where there is proof of wrongful dismissal and unfair termination. Those remedies are not, however, exhaustive. In this case, however, there was no basis to grant further relief under section 12 (3) (viii) of the E & LRCA. The award of eight (8) months' salary for the period from 4th July, 2011 to 26th March, 2012, in our view should not therefore, with all due respect, have been made in the circumstances of this case and it must be set aside.” 37.In this case, the appellant contends that the learned Judge did not properly exercise her discretion in awarding damages of three months’ salary, contending that he had specifically pleaded both discrimination and infringement of his constitutional rights as well as unlawful or unfair termination, which ought to have been treated as distinct infringements attracting separate remedies. 38.In United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd [1985] KECA 39 (KLR), Madan, JA. had the following to say on the circumstances in which this Court may interfere with a lower court’s exercise of judicial discretion:“The Court of Appeal will not interfere with a discretionary decision of the judge appealed from simply on the ground that its members, if sitting at first instance, would or might have given different weight to that given by the judge to the various factors in the case. The Court of Appeal is only entitled to interfere if one or more of the following matters are established: first, that the judge misdirected himself in law; secondly, that he misapprehended the facts; thirdly, that he took account of considerations of which he should not have taken account; fourthly, that he failed to take account of considerations of which he should have taken account, or fifthly, that his decision, albeit a discretionary one, is plainly wrong.” 39.In our considered view, no basis has been laid to justify interfering with the learned Judge’s exercise of discretion in awarding three months’ salary in compensation. The appellant did not demonstrate that the learned Judge had misdirected herself in law or misapprehended the facts; failed to take into account the considerations set out under section 49(4) of the Act; took into account irrelevant or inappropriate considerations; or that the decision was plainly wrong. 40.To our mind, the discriminatory action of the respondent in selecting the appellant for redundancy without lawful justification was part of the flawed procedure leading to his wrongful termination. Such discrimination cannot be extricated from the termination process so as to be viewed as a distinct and separate infringement deserving of further reliefs. We also find that the appellant did not adduce any evidence of any distinct acts of harassment, discrimination, or infringement of his constitutional rights and freedoms that ought to have persuaded the ELRC to invoke its powers under section 12(3) of the Employment and Labour Relations Court Act to grant further orders on general damages in the sum of Kshs. 2,081,412 as prayed. 41.Turning to the 2nd and last issue as to whether the learned Judge was at fault in declining to award the appellant costs of the suit, counsel for the appellant submitted that it is a well-established principle of law that costs follow the event; and that, having concluded that the appellant was discriminated against and that he was unlawfully and unfairly terminated, and the appellant having been successful in his suit against the respondent, the learned trial Judge ought to have awarded the appellant the costs of the suit. 42.Counsel cited the case of Meya Agri Traders Ltd v Elgon House (2010) Ltd [2023] KECA 574 (KLR) for the proposition that the ordinary rule in civil litigation and appeals is that costs are at the discretion of the court but most preferably, they should follow the event; and that there must exist special circumstances to warrant deviation from this general rule. 43.On their part, counsel for the respondent submitted that section 27 of the Civil Procedure Act is categorical that costs follow the event, but that the court has the discretion as to whether or not to award costs; and that the superior court cannot be faulted on the issue of costs unless it is shown that the decision was against the principles set out by the Supreme Court in Rai & 3 others v Rai & 4 others [2014] KESC 31 (KLR). According to counsel, the trial court was correct in its findings on award of costs. 44In Supermarine Handling Services Ltd v Kenya Revenue Authority [2010] KECA 373 (KLR), this Court held that:“Costs of any action, cause or other matter or issue shall follow the event unless the court or Judge shall for good reason otherwise order. See Section 27 (1) of the Civil Procedure Act ….Thus, where a trial court has exercised its discretion on costs, an appellate court should not interfere unless the discretion has been exercised unjudicially or on wrong principles. Where it gives no reason for its decision the Appellate Court will interfere if it is satisfied that the order is wrong. It will also interfere where reasons are given if it considers that those reasons do not constitute ‘good reason’ within the meaning of the rule.” 45.In Rai & 3 others v Rai & 4 others (supra), the Supreme Court observed that:“ 14.So the basic rule on attribution of costs is: costs follow the event. But it is well recognized that this principle is not to be used to penalize the losing party; rather, it is for compensating the successful party for the trouble taken in prosecuting or defending the suit. In Justice Kuloba’s words [Judicial Hints on Civil Procedure, at p 94]: ‘[T]he object of ordering a party to pay costs is to reimburse the successful party for amounts expended on the case. It must not be made merely as a penal measure …. Costs are a means by which a successful litigant is recouped for expenses to which he has been put in fighting an action.’ 15.It is clear that there is no prescribed definition of any set of ‘good reasons’ that will justify a Court’s departure, in awarding costs, from the general rule, costs-follow-the-event. In the classic common law style, the Courts have proceeded on a case-by-case basis, to identify ‘good reasons’ for such a departure …. 18.It emerges that the award of costs would normally be guided by the principle that ‘costs follow the event”: the effect being that the party who calls forth the event by instituting suit, will bear the costs if the suit fails; but if this party shows legitimate occasion, by successful suit, then the defendant or respondent will bear the costs. However, the vital factor in setting the preference, is the judiciously-exercised discretion of the Court, accommodating the special circumstances of the case, while being guided by ends of justice.” 46.It is noteworthy that the learned Judge did not give any reasons for declining to award the appellant costs of the suit. Be that as it may, it is not lost on us that the appellant had filed suit to recover a substantial sum of Kshs. 18,038,904, a claim that was dismissed. 47.On the other hand, the respondent had proved its case that it had paid the appellant all terminal dues under the Act. In our view, the sum awarded in compensation for discriminatory redundancy was insignificant compared to his global claim. To our mind, the discretionary award of 3 months’ salary in compensation can hardly tilt the scales of justice in his favour on account of costs. In our considered view, the circumstances of the appellant’s case called for departure from the general principle that costs follow the event. His claim having failed substantially, and the respondent’s defence having succeeded to a significant extent but for the discriminatory conduct, we cannot fault the learned Judge for directing that each party bears its own costs of the suit. 48.Having carefully considered the record of appeal, the grounds on which it was anchored, the rival submissions of learned counsel, the cited authorities and the law, we reach the inescapable conclusion that the appeal fails and is hereby dismissed. Consequently, the judgment of the ELRC (Monica Mbaru, J.) dated 25th May 2023 is hereby upheld. 49.In exercise of our discretion upon consideration of the nature of the dispute, we hereby order and direct that each party bears their own costs of the appeal. DATED AND DELIVERED AT MOMBASA THIS 15TH DAY OF MAY, 2026.A. K. MURGOR…………………………………JUDGE OF APPEALDR. K. I. LAIBUTA CArb, FCIArb.……………………………………JUDGE OF APPEALG. W. NGENYE-MACHARIA………………………………...JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR