https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1417

 **REPUBLIC OF KENYA** **IN THE EMPLOYMENT *&* LABOUR RELATIONS** **COURT OF KENYA AT KISUMU** **APPEAL NO. E068 OF 2025** THE BOARD OF MANAGEMENT KAGONYA SECONDARY SCHOOL…………….….………**APPELLANT** **VERSUS** ZACHARY ODINDO ODHIAMBO…….............................**RESPONDENT** *(Being an Appeal from the Judgment and Order of Hon. E. Tsimonjero (SRM) in Ukwala MCELRC Cause No. E001 of 2023 delivered on 18th July 2025)* **JUDGMENT** 1. This appeal arises from the Judgment of Hon. E. Tsimonjero SRM delivered on 18th July 2025 in **Ukwala MELRC No. E001 of 2023,** **Zachary Odindo Odhiambo *v* The Board of Management Kagonya Secondary School***.* Aggrieved by that decision, the Appellant lodged a Memorandum of Appeal dated 14th August 2025 setting out the following grounds: * + 1. *That the Trial Magistrate erred in law and fact in finding that the Appellant failed to establish the reasons for the Respondent’s termination as per section 43 of the Employment Act 2007.* 2. *That the learned Trial Magistrate erred in law and in fact in finding that the Respondent was entitled to Kshs. 156,000/- in 12 months’ salary in compensation for wrongful termination without reasons to justify the maximum award and equally failed to take into account relevant factors set out under section 49(4) of the Employment Act.* 3. *That the Trial Magistrate erred in law and fact in finding that the Respondent was entitled to Kshs. 13,000/- in 1 Months’ salary in lieu of notice without support from the pleadings and evidence.* 4. *That the Trial Magistrate erred in law and fact in finding that the Respondent was entitled to Kshs. 46,800/- in unpaid house allowance for 2 years.* 5. *That the Trial Magistrate erred in law and fact in finding that the Respondent was entitled to Kshs. 13,000/- in service pay for 2 years.* 6. *That the Trial Magistrate erred in law by failing to direct that the award of damages was subject to statutory deductions as expressly provided for under section 49(2) of the Employment Act.* 7. *That the Trial Court erred in failing to properly evaluate the evidence, thereby arriving at an erroneous conclusion that the Appellant was liable to the Respondent for wrongful termination thereby improperly using his discretion.* 8. *That the award of salary was excessive, unjustified and contrary to the terms of the employment contract, if any, between the parties.* 9. *That the trial court erred in fact and in law by failing to consider the Appellant’s submissions and documentary evidence demonstrating that no salary and house allowance arrear were due.* 2. On the basis of these grounds, the Appellant urges the Court to allow the appeal, set aside the judgment of the Trial Court, dismiss the suit before the Magistrate’s Court and award it costs of both the appeal and the proceedings before the Trial Court. The Appellant further prays for such other or further orders as the Court may deem fit to grant. 3. The Respondent on his part also filed a cross-appeal dated 1st September 2025 founded on the following grounds: * 1. *That the learned Trial Magistrate erred in law and fact by dismissing the Respondent's claim for Kshs. 117,000/- (salary for 9 months from 1st April 2020 to 31st December 2020) despite:* 2. *Finding as a fact that the Respondent was assigned by the Appellant's Principal to supervise the agriculture project during the COVID-19 closure* 3. *Accepting the Respondent's unchallenged evidence (CW-2) that he performed these duties and even the Counsel for the Appellant, during hearing, indicated that the written statements of CW-3 and CW-4 be adopted instead of calling their makers, in order to saves court’s time since they are almost the same.* 4. *Applying an incorrect and excessively onerous standard of proof by requiring physical project documentation, contrary to the principle that uncontroverted testimony constitutes sufficient proof.* 5. *The learned Trial Magistrate erred in law and fact by dismissing the Respondent's claim for Kshs. 4,766.67 (salary for 11 days from 1st to 11th January 2021) despite finding that:* + 1. *The employment contract was terminated on 11th January 2021.* 2. *The termination was procedurally unfair.* 6. *The Respondent was therefore entitled to remuneration for the days worked in January 2021 up to the point of his unlawful termination.* 7. *The learned Trial Magistrate erred in law in the application of judicial notice under the Evidence Act by using the general fact of school closures to conclusively negate the Respondent's specific and proven evidence of performing unique, assigned duties (project supervision) that were not part of normal academic instruction and were feasible during the closure period.* 8. *The learned Trial Magistrate erred in law by awarding house allowance for only 2 years (Kshs. 46,800/-) instead of the claimed 3 years (Kshs. 70,200/-) without any justification, despite finding that the contract period ran from 2nd January 2019 to 11th January 2021, a period spanning two years and eleven days, thus entitling the Respondent to the allowance for the entirety of his service.* 9. *The learned Trial Magistrate erred in law by awarding gratuity for only 2 years (Kshs. 13,000/-) instead of the claimed 3 years (Kshs. 19,500/-) without any justification. The Respondent's service period of over two full years entitled him to gratuity calculation for three years under the principle that a fraction of a year in the third calendar year of service is recognized for gratuity purposes.* 10. *The learned Trial Magistrate erred in law by limiting the award of interest to the date of the judgment, whereas the Amended Memorandum of Claim specifically prayed for interest from the date of filing suit. The Respondent is entitled to interest on the awarded sums from the date the cause of action arose, or at the very least, from the date of filing the suit.* 4. On the basis of the foregoing grounds, the Respondent urges the court to partially set aside the judgment by allowing the claims for salary for nine months in the sum of Kshs. 117,000/-, salary for 11 days in the sum of Kshs. 4,766.67, house allowance for three years amounting to Kshs. 70,200/- and gratuity for three years amounting to Kshs. 19,500/-. He further seeks an order setting aside the award of Kshs. 156,000/- for unfair termination and substituting it with an award equivalent to 12 months’ salary calculated inclusive of statutory house allowance. The Respondent also prays for interest on the entire decretal sum at court rates from the date of filing suit until payment in full, costs of the cross-appeal and such other relief as the court may deem fit and just to grant. 5. Both the appeal and the cross-appeal were canvassed by way of written submissions. Appellant’s Submissions 1. In support of the appeal, the Appellant identifies three issues for determination, namely: whether the trial court properly exercised its discretion in awarding the maximum compensation equivalent to 12 months’ salary; whether the Respondent’s salary was inclusive of house allowance; and whether the trial court failed to consider the mandatory factors set out under section 49(4) of the Employment Act before making the award. 2. On the 12 months’ salary compensation the Appellant submits that no special circumstances warranted the maximum award. It asserts that the court did not give a reason for opting to make the award under section 49(1)(c) and not under section 49(1)(a) or (b). It submits that the award of maximum salary should only be granted in exceptional circumstances which have not been demonstrated in this case. The Appellant submits that one months’ salary in lieu of notice is sufficient compensation given that the Respondent is not a trained teacher under the TSC. It also asserts that the Respondent has prospects of engaging in alternative training and getting another source of livelihood. In support of its position, it cites **Kenfreight (EA) Limited *v* Benson K Nguti [2016] KECA 409 (KLR)**, in which it was held that a Trial Court is obligated to consider the factors under section 49(4) of the Employment Act before awarding compensation for unfair termination. 3. On the issue of house allowance, the Appellant submits that the Respondent’s salary was consolidated and therefore inclusive of house allowance. It contends that the Respondent failed to produce payslips or any other evidence to controvert that position. As regards the court’s failure to take into consideration section 49(4) of the Employment Act, the Appellant submits that the court failed to analyse relevant considerations such as the Respondent’s length of service, his ability to secure alternative employment and whether any exceptional circumstances existed to warrant the award made. Reliance is placed on **CMC Aviation Limited *v* Mohammed Noor [2015] KECA 775 (KLR),** where the Court of Appeal held that the remedy of compensation is discretionary and must be exercised judiciously after consideration of the factors outlined in section 49 (4) of the Employment Act. The Respondent further relies on **Ol Pejeta Ranching Limited *v* David Wanjau Muhoro [2017] KECA 329 (KLR)**, in which the court underscored that maximum compensation should not be awarded mechanically, but only on a justifiable basis. In view of the foregoing, the Appellant urges this court to interfere with the award on the basis that the trial court considered irrelevant matters or failed to consider relevant factors, thereby arriving at a plainly erroneous decision. For this proposition, reliance is placed on **United India Insurance Co. Ltd *v* East African Underwriters (Kenya) Ltd [1985] KLR 898**. Respondent’s Submissions 1. Regarding the Trial Court’s award of the maximum compensation, the Respondent submits that it was justified. He asserts that contrary to the Appellant’s assertions the trial court rightly considered the provisions of section 49(4) of the Employment Act, specifically the fact that his termination was via text message, there was no evidence of misconduct or poor performance, no hearing took place and the reasons for termination were given after the fact. Citing **Bank of Baroda (K) Limited *v* Antony Mbugua Irungu [2014] eKLR**, the Respondent submits that length of service is not the sole consideration in assessing compensation, and that the manner of termination and the employee’s conduct are equally relevant. He also relies on **Kenya Ports Authority *v* Munyao *&* 4 others [2023] KESC 112 (KLR)**, for the proposition that a court is not required to mechanically list every factor under section 49(4) so long as the judgment, read as a whole, demonstrates consideration of the relevant factors. 2. On whether his salary was consolidated, the Respondent submits that the Appellant failed to prove that the salary was inclusive of house allowance. He contends that the letter of appointment did not indicate that the salary was consolidated and that the burden of proof rested upon the employer pursuant to sections 10(7) and 74 of the Employment Act. In support of this position, he relies on **Otieno *v* Ison Technologies Kenya Limited (Cause E509 of 2022) [2023] KEELRC 2924 (KLR),** where it was stated: *“It is unclear to the court whether the salary included a housing allowance component since the agreement is silent and RWI admitted, on cross-examination that the contract did not state that the salary was consolidated which is further amplified by the copy of the payslip on record which expressly states that the salary indicated is basic salary. The claimant testified that his salary was not consolidated. In the circumstances, the court is satisfied that the claimant is entitled to housing allowance at 15% of the basic salary for 3 years, Kes 404,460/= as the right accrued on employment.”* 1. On the claims for notice pay and service pay; the Respondent submits that his employment was terminated through a text message without prior notice and that he was therefore entitled to one month’s salary in lieu of notice pursuant to sections 35(1) and 36 of the Employment Act. As for service pay the Respondent submits that he is entitled to the same. He asserts that although he was a member of NSSF, the Appellant did not produce any evidence of remittance. He relies on **Ochieng another *v* Pride Kings Services Ltd (Cause E057 of 2024) [2025] KEELRC 213 (KLR),** where the court held that service pay may still be payable where an employer fails to prove remittance of NSSF contributions. 2. On the complaint that the Trial Court failed to expressly state that the award was subject to statutory deductions, the Respondent submits that such a direction was unnecessary since statutory deductions are an administrative matter already provided for under section 49(2) of the Employment Act. He therefore urges the Court to dismiss that ground as misconceived. 3. Turning to the cross-appeal, the Respondent submits that the Trial Court erred in dismissing the claim for salary for the period between 1st April 2020 and 31st December 2020 on the basis that schools were closed during the COVID-19 pandemic and that no documentary proof of work done had been produced. He highlights his testimony on the principal’s request to supervise the school’s agriculture project during the closure period on the understanding that his salary would continue and would be paid upon resumption of learning. He also cites PW2’s testimony to the effect that he helped students during the COVID-19 period. He maintains that this evidence remained uncontroverted, particularly because the Appellant failed to call the Principal as a witness. He relies on, **CMC Aviation Limited *v* Cruisair Limited (No. 1) [1978] KLR 103** for the proposition that uncontroverted evidence ought to be accepted unless manifestly incredible. The Respondent further submits that the court improperly invoked judicial notice of school closures during the COVID-19 pandemic to displace direct evidence that he continued rendering services. In support of this argument, he relies on **Kenya Breweries Limited *v* Odongo [2000] 1 EA 284**, for the argument that judicial notice should not displace evidence actually adduced. The Respondent accordingly urges the court to award Kshs. 117,000/- being salary for the nine months in question. 4. With regard to the claim for salary for the period between 1st January 2021 and 11th January 2021, the Respondent submits that the trial court erred in dismissing the same despite the undisputed fact that schools had resumed operations and that he remained at work during the said period. He therefore prays for Kshs. 4,766.67 being salary for the 11 days worked. 5. On the awards for house allowance and gratuity, the Respondent submits that the Trial Court erred by limiting the awards to two years despite having found that the contract of employment ran from 2nd January 2019 to 11th January 2021. He asserts that there was no justification for excluding 11 days in January 2021 and the period between January and March 2020. The Respondent therefore urges the court to award the Kshs. 70,200/- sought. With respect to gratuity, the Respondent argues that service extending into a third calendar year entitled him to gratuity for three years. Reliance is placed on the decision in **Martin Ireri Ndwiga *v* Olerai Management Company [2017] eKLR**, where the court held that service pay is due to an employee not covered by statutory deductions, and on **Bamburi Cement Ltd *v* William Kilonzi [2016] eKLR**, where the Court of Appeal discussed the nature of gratuity as a payment for services rendered. The Respondent therefore seeks enhancement of gratuity to Kshs. 19,500/-. 6. On compensation for unfair termination, the Respondent submits that the trial court erred in computing compensation on the basis of basic salary alone without taking into account house allowance. He argues that section 49(1)(c) of the Employment Act provides for compensation based on wages, while section 2 of the Act defines wages to include both basic salary and any additional remuneration payable to the employee. He therefore contends that house allowance formed part of his monthly remuneration and that compensation ought to have been calculated on the basis of Kshs. 14,950/- per month, being the aggregate of the basic salary and 15% house allowance. The Respondent consequently urges the court to substitute the award of Kshs. 156,000/- with Kshs. 179,400/-, being compensation equivalent to 12 months’ full remuneration. 7. On the issue of interest, the Respondent submits that the trial court erred in awarding interest from the date of judgment instead of from the date of filing suit as specifically prayed in the Amended Memorandum of Claim. He argues that the claims for unpaid salary, gratuity and house allowance were liquidated claims that accrued prior to judgment and therefore attracted interest from the date of filing suit. In support of this position, reliance is placed on **Kingori *v* Basari Company Limited *&* 2 others (Civil Case 611 of 2016) [2025] KEMC 309 (KLR)**. The Respondent accordingly urges the court to award interest on the decretal sum from 6th July 2023 until payment in full. In conclusion, the Respondent urges the court to dismiss the appeal in its entirety and allow the cross-appeal. Disposition 1. The Court on first appeal is enjoined to revisit the proceedings in the Trial Court whilst bearing in mind unlike that Court, it did not have the benefit of seeing the witnesses for the parties testify, and accordingly make due allowance in that regard. The Court has considered the evidence adduced and the law, as well as the submissions of parties. The Appellant was the employer of the Respondent and as such employer was the one with the burden of availing employment records. Having failed to show the salary was consolidated, the employer cannot claim it was by asserting the Respondent was to avail the payslips. It was the determination of the Court that the salary was not consolidated and that house allowance was payable. The Trial Court correctly determined the issue. The only problem was the award of 2 years. The Respondent in his cross-appeal seeks the award of 3 years house allowance. 2. The non-payment of house allowance is an injury that is continuous until remedied and the Respondent ought to have sought payment within 12 months. He therefore is only entitled to recover the sum due as house allowance for 12 months being Kshs. 23,400/-. The determination that the Respondent was entitled to 12 months compensation is well thought out as the termination was egregious – a text was sent terminating the employment. It is unfortunate the Employment Act does not impose a longer period for certain kinds of dismissal. 3. The Learned Magistrate, like any other Court does not need to say that the salary awarded to an employee as part of the recovery of claims made is subject to statutory deduction. Only salary unpaid is subject to statutory deduction and therefore if any sums are awarded as damages these are excluded in computation of tax. As such, there was no error in the determination made by the Learned Magistrate and his decision is upheld save for the issue of house allowance which is accordingly reduced to Kshs. 23,400/-. The rest of the Appeal is without merit and is dismissed with no order as to costs. 4. The period when covid 19 happened was a *force majeure* and it was common knowledge that schools shut down. The claim for salary for the period is therefore untenable and the Learned Magistrate was right in dismissing the claim. On appeal, I do not find any error in the manner the claim for unpaid salary during the Covid pandemic was handled. I uphold his determination on the matter of salary on that score. The foregoing is ample that the cross appeal is unmerited and only fit for dismissal. 5. The final result is that the cross-appeal is dismissed with no order as to costs with the result that the judgment and decree of the Learned Magistrate is upheld with the minor adjustment of award on house allowance as indicated above. 6. In sum, the main appeal is allowed to a very limited extent on the house allowance quantum and the balance of the appeal accordingly dismissed. There will be no award of costs to either party. It is so ordered. **Dated and delivered at Kisumu this 21st day of May 2026** **Nzioki wa Makau, MCIArb.** **JUDGE**