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Judicial Service Commission v Mbiti (Civil Appeal E307 of 2024) [2026] KECA 1605 (KLR) (31 July 2026) (Judgment) Neutral citation: [2026] KECA 1605 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal E307 of 2024 PO Kiage, J Mohammed & WK Korir, JJA July 31, 2026 Between The Judicial Service Commission Appellant and Peter Musyoki Mbiti Respondent (Being an appeal from judgment and decree of the Employment and Labour Relations Court at Nairobi (J. Rika, J.) dated 12th February, 2024 in ELRC Cause No. E843 of 2021)) Judgment Background 1.This is an appeal by the Judicial Service Commission (the appellant) from the judgment of the Employment and Labour Relations Court (ELRC) (Rika, J.) dated 12th February, 2024 in ELRC Cause No. E834 of 2021. In that judgment, the ELRC declared the respondent’s dismissal unfair, unlawful, and unconstitutional, ordered his reinstatement, and awarded salary arrears.Peter Musyoki Mbiti is the respondent herein. 2.Aggrieved by that decision, the appellant lodged the present appeal. The appellant seeks that the judgment of the ELRC be set aside and substituted with an order finding that the respondent’s termination of employment vide the letter dated 4th January 2021 was lawful, fair, and justified. 3.The dispute originated from a Statement of Claim dated 6th October 2021, by which the respondent commenced proceedings before the ELRC against the appellant. He averred that he had been employed by the appellant and had risen through the ranks to the position of accountant before his dismissal from service. 4.The respondent further averred that, following the conclusion of criminal proceedings in which cash bail had been deposited, the depositor sought a refund but was unable to recover the money. This prompted investigations and an audit, which allegedly disclosed unaccounted public funds, including Kshs. 200,000 deposited as cash bail on behalf of Elisha K. Birir and Ben K. Birir (the accused persons) in the relevant criminal proceedings. 5.The respondent’s case before the ELRC was that, at the material time, it was the established practice at Loitoktok Law Courts for Court officials to receive cash payments and issue official receipts as the station had no designated bank account. The monies so received would subsequently be handed over to the accountant in charge for banking into the Kajiado Law Courts account. He maintained that he received the disputed cash bail pursuant to instructions issued by the Head of Station, the Accountant in charge being absent from duty. He further asserted that, upon the accountant’s resumption of duty, he handed over the money for banking.According to the respondent, if the funds were subsequently unaccounted for, responsibility lay with the accountant in charge rather than with himself. 6.On the basis of those averments, the respondent sought the following reliefs before the ELRC:a.A declaration that the process of termination of his employment was illegal, unprocedural, and irregular;b.A declaration that the termination of his employment amounted to unfair and unlawful termination;c.A declaration that the termination of his employment amounted to unfair administrative action;d.An order directing payment of full salary from the date of suspension;e.An order for reinstatement to the position held prior to dismissal;f.An award of Kshs. 927,120 being compensation equivalent to twelve months’ salary for unlawful and unfair termination;g.General damages for unfair discriminatory action;h.General damages for career regression;i.Interest on the foregoing sums; andj.Costs of the suit. 7.The appellant opposed the claim through a Response to Claim dated 14th December 2021. It averred that the respondent had been issued with a notice to show cause dated 25th September 2019 on allegations of gross misconduct arising from his receipt of cash bail amounting to Kshs. 200,000 in Criminal Case No. 96/2016 and his failure to bank those funds. The appellant further averred that the respondent was suspended from duty on 25th September 2019 and subsequently responded to the allegations by a letter dated 9th October 2019. 8.The appellant further pleaded that the respondent was invited to appear before the Human Resource Management Advisory Committee (HRMAC) on 24th August 2020 to answer the allegations against him. During the disciplinary proceedings, the respondent gave his explanation and called one witness, namely the Head of Station. According to the appellant, although the respondent admitted receiving the cash bail and issuing official receipts, he failed to demonstrate that the money had been handed over to the accountant in charge for banking. The appellant maintained that this explanation was unsupported by any documentary or other independent evidence. 9.The appellant further contended that the respondent's evidence materially contradicted that of his own witness, who testified that monies collected at the station were ordinarily banked on a daily basis in accordance with the prevailing practice. 10.Upon conclusion of the disciplinary proceedings, HRMAC recommended that further investigations be undertaken to establish whether the accountant in charge had undertaken to refund the disputed cash to the depositor following a complaint lodged with the Judiciary Ombudsman. The matter was thereafter referred to the Directorate Human Resource Management Committee (DHRMC), which recommended that the respondent be dismissed for gross misconduct with effect from 14th March 2019. That recommendation was subsequently approved by the appellant, culminating in the respondent's dismissal by letter dated 4th January 2021. 11.The respondent lodged an internal appeal against the dismissal, but the appeal was unsuccessful. The appellant therefore maintained before the ELRC that the respondent's dismissal was both substantively justified and procedurally fair. 12.Upon considering the pleadings and evidence, the learned Judge framed the following issues for determination:i.Whether the respondent had been lawfully and fairly dismissed from employment; andii.Whether he was entitled to the reliefs sought in the Statement of Claim. 13.In determining the dispute, the learned Judge found that the respondent had been accorded a fair disciplinary process in compliance with the Employment Act, the Fair Administrative Action Act, and Article 47 of the Constitution. However, the court held that the appellant had failed to establish valid and fair reasons to justify the respondent's summary dismissal. The learned Judge observed that the dismissal letter dated 4th January 2021 attributed the dismissal to alleged fraudulent receipt of cash bail and the respondent's failure to prove that he had handed over the money to the accountant in charge. 14.Upon evaluating the evidence, the learned Judge found that the respondent had received the cash bail on Friday, 29th July 2016 and had duly issued official receipts. The accountant in charge was absent from duty on that date and the court station did not have facilities for direct banking, banking services being undertaken through the Kajiado Law Courts account. The court accepted the respondent's explanation that he retained the money over the weekend and handed it over to the accountant in charge on Monday, 1st August 2016. 15.The trial court consequently held:“It was unreasonable of the respondent to charge that there was anything fraudulent, deceitful, dishonest and illegal in the claimant's conduct with regard to his handling of the cash bail." 16.The learned Judge ultimately concluded:“In the end the Court is satisfied that substantive justice, under the Employment Act, the Judicial Service Act, Articles 41 and 47 of the Constitution and the Fair Administrative Action Act, was denied to the Claimant. No valid reason was established to end the Claimant's 10 years of judicial service." 17.Consequently, by a judgment delivered on 12th February 2024, the ELRC granted the following reliefs:a.A declaration that the termination of the respondent's employment was unfair, unlawful, and unconstitutional;b.An order reinstating the respondent to the position he held as at 25th September 2019;c.Payment of salary arrears from 25th September 2019 to 28th June 2021;d.A declaration that the period between 28th June 2021 and the date of reinstatement would be treated as unpaid leave; ande.No order as to costs or interest. 18.Aggrieved by the judgment, the appellant lodged a Notice of Appeal dated 12th February 2024 and thereafter filed a Memorandum of Appeal dated 25th April 2024 raising five grounds of appeal. In summary, the appellant contends that the learned Judge erred in finding that no valid and fair reasons existed for the respondent’s dismissal; failed to appreciate the appellant’s statutory authority to conduct disciplinary proceedings through its committees while retaining ultimate decision-making authority; improperly granted the remedy of reinstatement notwithstanding the statutory limitation period; erroneously awarded salary arrears for a period during which the respondent was no longer in employment; and granted relief exceeding the limits prescribed under Section 49 of the Employment Act. Submissions by Counsel 19.The appeal was disposed of by way of written submissions, which counsel briefly highlighted during the hearing. Learned counsel Mr. Musyoka, held brief for learned Senior Counsel Mr. Kanjama for the appellant, while learned counsel Ms. Makaba appeared holding brief for learned counsel Mr. Sudi for the respondent. 20.On behalf of the appellant, Mr. Musyoka submitted that the learned Judge erred in holding that the appellant lacked valid reasons for dismissing the respondent. Counsel relied on Section 43(2) of the Employment Act, which provides that the reasons for termination are those matters that the employer genuinely believed to exist at the time of termination and which caused the employer to terminate the employee’s services. 21.Counsel further relied on, among other authorities, this Court’s decision in Judicial Service Commission v Gladys Boss Shollei [2014] eKLR (Civil Appeal No. 50 of 2014) which adopted the reasoning of the Supreme Court of Canada in McKinley v B.C. Tel (2001) 2 S.C.R 161, where the Court observed that:“Whether an employer is justified in dismissing an employee on grounds of dishonesty is a question that requires assessment of the context of the alleged misconduct…” 22.Counsel submitted that the appellant had established, on a balance of probabilities, valid and fair reasons for terminating the respondent’s employment. It was argued that the appellant genuinely believed that the respondent had failed to account for public funds entrusted to him and that the respondent had failed to produce any evidence demonstrating that he handed over the disputed cash bail to the accountant in charge. 23.Counsel further submitted that the learned Judge failed to appreciate that although the appellant delegated the conduct of disciplinary proceedings to the Human Resource Management Advisory Committee (HRMAC), the ultimate disciplinary mandate remained vested in the Judicial Service Commission. Counsel relied on the case of Judicial Service Commission & Another v Onyango [2023] KECA 1109 (KLR) where this Court pronounced itself as follows:“ 45.At all times, the responsibility of making a decision was vested in the JSC. Whereas the Commission delegated its authority to HRMAC to conduct the disciplinary hearing, that did not vest upon the said HRMAC the mandate to make a determination on the respondent’s fate.” 24.Turning to the remedies granted, counsel argued that the order of reinstatement was made without regard to the statutory limitation prescribed under Section 12(3) of the Employment and Labour Relations Court Act and Section 49(4) of the Employment Act. Counsel submitted that the respondent had remained out of employment from 25th September 2019 and that the order of reinstatement, issued on 12th February 2024, was made more than four years after his dismissal. 25.Counsel further submitted that the learned Judge failed to consider the statutory principles governing reinstatement under Section 49 of the Employment Act and therefore the order of reinstatement ought to be set aside. Reliance was placed on this Court’s decision in Sotik Highlands Tea Estates Limited v Kenya Plantation and Agricultural Workers Union [2017] eKLR where the Court stated as follows:“… we think that it was a misdirection for the learned judge to make an order for reinstatement when the effect would be to order the appellant to reinstate Siro to Employment when the period of three years allowed in law had long passed. To that extent the learned judge acted without jurisdiction…” 26.Counsel also challenged the learned Judge’s reliance on the decision of this Court in Judicial Service Commission & Another v Lucy Muthoni Njora [2021] eKLR which held that “once a dismissal decision involving a State Officer was adjudged unlawful, null and void, reinstatement was an automatic remedy.” Counsel submitted that the said decision does not establish reinstatement as an automatic consequence of an unlawful dismissal. 27.It was further submitted that, in exercising the discretion to order the reinstatement, the trial court ought to have considered all the factors enumerated under Section 49(4)(a) to (m) of the Employment Act. 28.With regard to the award of salary arrears from 25th September, 2019 to 28th June, 2021, counsel argued that, following dismissal, the respondent ceased to be an employee and therefore had no legal entitlement to salary for the period after termination. It was submitted that such an award could only arise where reinstatement had been lawfully ordered within the statutory period. 29.Counsel further contended that the award of salary arrears effectively compensated the respondent for a period exceeding the statutory minimum contemplated under Section 49(1)(c) of the Employment Act. Reliance was placed on the decision of the Supreme Court in Kenfreight (E.A) Limited v Benson K. Nguti [2019] eKLR, where the Apex Court pronounced itself in the following terms:“Section 49 of the Employment Act provided for remedies for unfair termination of an employment contract. When giving an award, the court had discretion to determine what was fair under the circumstances. However, the court’s discretion was based on the set parameters including the limiting of the award to maximum of the equivalent of 12 months’ salary…” 30.Counsel accordingly urged this Court to allow the appeal and set aside the judgment of the ELRC. 31.Opposing the appeal, Ms. Makaba, learned counsel for the respondent, submitted that the disciplinary process was fundamentally unfair and that the respondent’s constitutional and statutory right to a fair hearing had been grossly violated by the appellant. Counsel argued that the respondent had twice been denied an opportunity to call material witnesses and that exculpatory evidence from three key witnesses was disregarded by the appellant. 32.Counsel relied principally on the decision of the Supreme Court in Samuel Gitau Gichuru v Package Insurance Brokers [2021] eKLR, where the Apex Court held that:“(75)However, the procedure followed to terminate the contract was in breach of Section 41 and 45(2) (c) of the Employment Act for the reason that the appellant was not accorded a chance to defend himself or respond to the allegations against him… Consequently, the failure to follow fair procedure rendered the termination of the appellant’s employment unfair within the meaning of section 45 of the Act.”and further:“(78)It is evident that no hearing was demonstrated to have been conducted and the only inference one can draw is that the dismissal was unfair and unlawful for failing to accord the appellant a fair hearing. The respondent was required to facilitate the termination in accordance with Section 41(1) of the Employment Act in order to come within the ambit of fairness. The allegation that the appellant faced would have well been explained if granted the opportunity so as to avoid the harsh sanction of a summary dismissal as contemplated under section 41 of the Employment Act.” 33.Counsel further submitted that the appellant acted contrary to both the Fair Administrative Action Act and the Employment Act by disregarding evidence that exonerated the respondent. It was argued that the Judiciary Ombudsman, the Head of Station at Loitoktok Law Courts, and HRMAC had all reached conclusions favourable to the respondent, yet the appellant nevertheless proceeded to dismiss him without lawful justification. 34.On the remedies granted, counsel submitted that the learned Judge properly exercised judicial discretion. Reliance was placed on this Court’s decision in Kenya Airways Limited v Aviation and Allied Workers Union Kenya & 3 Others [2014] eKLR which set out the guidelines for reinstatement of an employee in the following terms:“… That the court can grant reinstatement is, however, not an automatic right of an employee. It is discretionary and each case has to be considered on its own merits based on the spirit of fairness and justice in keeping with the objectives of industrial adjudication…” 35.Counsel therefore urged this Court to dismiss the appeal in its entirety and uphold the judgment of the ELRC. Determination 36.This being a first appeal, our duty is to re-evaluate the evidence adduced before the trial court, analyse it independently, and draw our own conclusions, while bearing in mind that we neither saw nor heard the witnesses testify. In discharging that mandate, we are guided by Rule 31(1) of the Court of Appeal Rules, 2022 and the well-established principles enunciated in this Court’s decisions in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 and Gitobu Imanyara & 2 Others v Attorney General [2016] eKLR. 37.Equally instructive is the decision of the former Court of Appeal for East Africa in Peters v Sunday Post Limited [1958] EA 424, in which it was emphasized 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.” 38.We have considered the record of appeal, the judgment of the ELRC, the rival submissions, the authorities cited by counsel, and the applicable law. We observe that the learned Judge expressly found that the disciplinary process leading to the respondent’s dismissal substantially complied with the requirements of procedural fairness under the Employment Act, the Fair Administrative Action Act, and Article 47 of the Constitution. In particular, the learned Judge held that:“(63)The procedure employed by the respondent… met the basic minimum requirements of procedural fairness under the Employment Act and the respondent’s Human Resource Manual.”The learned Judge further observed that:“(74)The Court is of the view that the minimum statutory and constitutional standards of fair hearing, under the Employment Act, the Fair Administrative Act and Article 47 of the Constitution were observed.” 39.The learned Judge therefore found that the constitutional and statutory requirements of fair administrative action and fair hearing had been satisfied. 40.Significantly, those findings were not challenged by way of cross-appeal.It is settled that a respondent who seeks to impeach or vary adverse findings of a trial court must file a cross-appeal or a notice affirming the decision on other grounds, as appropriate. In the absence of a cross- appeal, those findings remain undisturbed and binding for purposes of this appeal. 41.Accordingly, procedural fairness is not an issue falling for our determination. The appeal therefore turns on two questions only:a.whether the appellant established valid and fair reasons for terminating the respondent’s employment within the meaning of sections 43 and 45 of the Employment Act; andb.whether the remedies granted by the ELRC were available in law. 42.On the first issue, sections 43 and 45 of the Employment Act impose upon an employer the burden of proving the reasons for termination and demonstrating that those reasons were valid, fair and related to the employee’s conduct, capacity, compatibility or the employer’s operational requirements. The legal burden rests squarely upon the employer. This principle has consistently been affirmed by this Court in Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union (Kenya) [2017] eKLR, CMC Aviation Ltd v Mohammed Noor [2015] eKLR and National Bank of Kenya Ltd v Samuel Nguru Mutonya [2019] eKLR. 43.It therefore fell upon the appellant to demonstrate, on a balance of probabilities, that the respondent’s dismissal was founded upon a valid and fair reason as contemplated by sections 43 and 45 of the Employment Act. Mere suspicion, however strong, cannot substitute proof of a valid reason for termination. As this Court observed in Kenfreight (EA) Ltd v Benson K. Nguti [2016] eKLR, substantive fairness demands objective justification for the employer’s decision, and the employer bears the evidential burden of establishing the facts constituting the alleged misconduct. 44.The respondent’s employment was terminated by a letter dated 4th January 2021, although the letter stipulated that the dismissal would take effect from 25 September 2019, being the date on which the respondent had been suspended from duty. The reason advanced for the dismissal was that the respondent had allegedly committed gross misconduct by fraudulently receiving Kshs.200,000 from a litigant in Loitoktok Criminal Case No. 96/2016, claiming to have handed over the money to the accountant in charge, but failing to produce documentary proof of such handover. 45.This issue before us is whether, in the circumstances disclosed by the evidence, that allegation constituted a valid and fair reason for dismissal within the meaning of sections 43 and 45 of the Employment Act. 46.Our re-evaluation of the record reveals that, at the material time, Loitoktok Law Courts was a relatively new station which did not maintain its own bank account. Instead, all court collections were banked through the account operated by Kajiado Law Courts. The evidence further established that responsibility for banking court collections rested with the accountant in charge, who alone possessed the requisite banking details and ordinarily undertook the banking of monies received at the station. 47.It is common ground that the respondent received the sum of Kshs.200,000 from the depositor and duly issued official court receipts acknowledging receipt thereof. The evidence further discloses that the accountant in charge was absent from duty on the material Friday. Consequently, the money could not be banked on that day. The respondent’s explanation was that he retained the money over the weekend and handed it to the accountant immediately upon his resumption of duty on the following Monday for purposes of banking. 48.It is equally undisputed that no contemporaneous written record or handing-over notes was prepared to document the transfer of the money to the accountant. The appellant relied principally upon the omission as constituting proof of gross misconduct warranting dismissal. 49.We are unable, with respect, to agree that the mere absence of written documentation, viewed in isolation from the totality of the evidence, established the misconduct alleged. An employer is required to prove not merely suspicion or procedural irregularity, but the factual basis of the misconduct relied upon. As this Court observed in Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union (Kenya) [2017] eKLR, the employer bears the statutory burden of proving both the existence of the reason for the termination and that such reason was valid and fair. Likewise, in CMC Aviation Ltd v Mohammed Noor [2015] eKLR, this Court underscored that the burden imposed by section 43 of the Employment Act is not discharged by conjecture or suspicion, however plausible it may appear. 50.The surrounding circumstances, in our view, considerably weaken the appellant’s contention that the respondent fraudulently appropriated the money. First, the respondent openly acknowledged receipt of the funds and issued official court receipts. Secondly, the operational arrangement at Loitoktok Law Courts, as explained by the witnesses, required monies collected to be handed over to the accountant in charge for banking.Thirdly, the evidence of the then Head of Station confirmed that this was the prevailing administrative practice at the station. 51.More significantly, the appellant’s own Assistant Director of Human Resource testified that the accountant in charge admitted having received the money from the respondent and undertook to refund it. That evidence emanated from the appellant’s own witness and substantially corroborated the respondent’s explanation regarding the disposition of funds. It was therefore incumbent upon the appellant to demonstrate why, notwithstanding that admission, the respondent alone should bear responsibility for the alleged loss. No satisfactory explanation emerges from the record. 52.In our respectful view, the learned Judge correctly appreciated the evidentiary burden resting upon the appellant. Having evaluated the evidence, the learned Judge concluded that the appellant had failed to establish a valid reason for the respondent’s dismissal. We discern no error of principle or misapprehension of the evidence that would justify appellate interference with that conclusion. 53.The appellant essentially invited this Court to infer dishonesty from the absence of documentary evidence of the handover. However, as this Court observed in Kenfreight (EA) Ltd v Benson K. Nguti (supra), allegations of misconduct must be established by credible evidence demonstrating that the employer genuinely and reasonably believed, on reasonable grounds, that the employee had committed the misconduct alleged. Mere administrative lapses or procedural deficiencies, without more, do not invariably constitute valid grounds for summary dismissal. 54.Furthermore, section 47(5) of the Employment Act imposes upon the employer the burden of justifying the grounds for termination once an employee establishes that dismissal occurred. Read together with sections 43 and 45 of the Employment Act, those provisions require the employer to establish substantive justification on a balance of probabilities. We are satisfied that the appellant did not discharge that statutory burden. 55.Consequently, we agree with the learned Judge that the respondent’s dismissal lacked substantive justification and was therefore unfair within the meaning of section 45 of the Employment Act. We accordingly find no basis for disturbing the trial court’s finding on liability. 56.Having found that the respondent's dismissal was substantively unfair, we now turn to consider whether the remedies granted by the learned Judge were available in law. 57.The learned Judge ordered the reinstatement of the respondent to his former employment. The appellant contends that the learned Judge lacked jurisdiction to grant that remedy because, by the time judgment was delivered, the statutory period within which an order of reinstatement may be made had expired. The respondent, on the other hand, maintains that the learned Judge properly exercised the discretion vested in the ELRC after considering the relevant statutory factors. 58.The remedy of reinstatement is governed principally by section 12(3)(vii) of the Employment and Labour Relations Court Act, which empowers the Court to order the reinstatement of an employee within three years of dismissal, subject to such conditions as the Court may deem fit. The provision is couched in mandatory terms and constitutes a jurisdictional limitation upon the Court's remedial powers. 59.The principles governing reinstatement are now well settled. In Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR, this Court held that reinstatement is an exceptional remedy, not an automatic consequence of every finding of unfair termination. Before granting such relief, the Court must have regard to the statutory considerations under section 49 of the Employment Act, the practicability of reinstatement, the employment relationship between the parties and, importantly, the temporal limitation prescribed by section 12(3)(vii) of the Employment and Labour Relations Court Act. 60.More recently, this Court has reiterated that the jurisdiction to order reinstatement is circumscribed by the express language of section 12(3)(vii), and that once the statutory period has lapsed, the Court is divested of jurisdiction to grant that remedy notwithstanding that the dismissal may have been found to be unfair. Jurisdiction flows from statute and cannot be enlarged by judicial discretion. 61.The record shows that the respondent's dismissal was communicated by a letter dated 4th January 2021. The letter expressly provided that the dismissal would take effect from 25 September 2019, being the date on which the respondent had been suspended from duty. Whether one reckons time from the date of the dismissal letter or from the effective date stipulated therein, it is common ground that by the time the judgment of the ELRC was delivered on 12 February 2024, more than three years had elapsed. 62.In those circumstances, we respectfully agree with the appellant that the learned Judge lacked jurisdiction to grant an order of reinstatement. While we appreciate the equitable considerations that informed the learned Judge's decision, jurisdiction cannot be conferred by sympathy, acquiescence or judicial discretion. Once the statutory period prescribed by section 12(3)(vii) had expired, the Court's jurisdiction to order reinstatement was extinguished. Accordingly, the order of reinstatement cannot stand and is hereby set aside. 63.We next consider the award of salary arrears equivalent to one year and nine months. The appellant argues that such an award has no statutory foundation under the Employment Act. 64.We find merit in that contention. Section 49(1) of the Employment Act prescribes the remedies available where termination is found to be unfair. In particular, section 49(1)(c) empowers the Court to award an employee compensation equivalent to a number of months' gross salary not exceeding twelve months, having regard to the factors enumerated in section 49(4). The statutory remedy is one of compensation, not payment of salary for periods during which no services were rendered, unless such relief is otherwise specifically provided by law. 65.This Court has consistently held that compensation under section 49 is discretionary and must be anchored upon the statutory framework established by the Employment Act. In Kenfreight (EA) Ltd v Benson K. Nguti (supra), the Court emphasized that remedies for unfair termination are statutory in nature and should be granted strictly within the confines of section 49. The Court expressed a similar position in National Bank of Kenya Ltd v Samuel Nguru Mutonya [2019] eKLR, observing that compensation under section 49 is intended to redress the injustice occasioned by unfair termination rather than to compensate an employee by way of continuing salary after cessation of employment. 66.In the present appeal, the learned Judge awarded salary arrears for a period of one year and nine months. With respect, that order finds no support in section 49(1) of the Employment Act and therefore cannot be sustained. 67.Having regard to the respondent's length of service, the circumstances surrounding the termination, the appellant's failure to establish a valid and fair reason for dismissal, and the statutory factors under section 49(4) of the Employment Act, we are satisfied that an award of compensation equivalent to twelve (12) months' gross salary constitutes fair and adequate recompense for the unlawful termination of the respondent's employment. We accordingly substitute the award of salary arrears with compensation equivalent to twelve months' gross salary. 68.In the result, the appeal succeeds only to the limited extent that the orders of reinstatement and payment of salary arrears are set aside. They are substituted with an award of compensation equivalent to twelve (12) months' gross salary pursuant to section 49(1)(c) of the Employment Act. 69.Save for the foregoing variation on remedies, the judgment of the Employment and Labour Relations Court is hereby affirmed. 70.As each party has succeeded in part, and bearing in mind the nature of the issues raised in the appeal, we consider it appropriate that each party shall bear its own costs both before the Employment and Labour Relations Court and in this appeal. 71.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2026.P. O. KIAGE…………...…..........…..JUDGE OF APPEALJAMILA MOHAMMED…………...…...............JUDGE OF APPEALW. KORIR……………………..........JUDGE OF APPEALI certify that this is a true copy of the original Signed DEPUTY REGISTRAR