https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1995

**REPUBLIC OF KENYA** **IN THE EMPLOYMENT AND LABOUR RELATIONS COURT AT NAIROBI** **ELRC APPEAL NO. E045 OF 2025** *(Before D. K. N. Marete)* **TRANSCHEM PHARMACEUTICALS LIMITED………………………APPELLANT** **VERSUS** **POLLY KINANU……………………………………………………………RESPONDENT** **JUDGMENT** This matter was originated by way of a Memorandum of Appeal dated 17th February 2025. It is an appeal from a judgment delivered on 17th January 2025 at Milimani in MCELRC 657 of 2023 in which the trial court found that the employment of the Respondent had been unfairly terminated and awarded her a total sum of Kshs. 381,900.00 together with costs and interest. The Memorandum of Appeal sets out the following grounds: 1. *The learned Magistrate erred in both law and fact in finding that the Appellant unfairly terminated the employment of the Respondent.* 2. *The learned Magistrate erred in both law and fact in finding that the termination of the Respondent’s employment was unlawful for lack of procedural and substantive fairness.* 3. *The learned Magistrate erred in law and fact in finding the Appellant liable to pay the Respondent Kshs. 381,900/= plus costs and interest.* 4. *The learned Magistrate erred in law and fact by failing to consider the Appellant’s submissions when rendering judgment.* 5. *The learned Magistrate erred in law by failing to consider in totality the evidence tendered and thereby arrived at an unlawful decision.* The Appellant prays for orders that; 1. *This appeal be allowed with costs in favour of the Appellant.* 2. *The judgment entered in MCELRC 657 of 2023 delivered on 17th January 2025 be set aside and substituted with an order dismissing the suit.* The Appellant’s case before the trial court was that the Respondent was employed as an Accountant on 20th June, 2014 at a monthly salary of Kshs. 28,500.00. In the course of a comprehensive internal audit, serious financial discrepancies totalling Kshs. 13,189,463.36 were discovered in the Appellant’s Development Branch for the period 1st January, 2021 to 28th February, 2022. The Respondent, being one of the persons responsible for cash remittances and reconciliations at that branch, was issued with a show cause letter dated 27th August, 2022 requiring her to explain the cash deficits. The Appellant’s further case is that upon being served with the letter, the Respondent deserted the workplace without responding to the show cause or attending any disciplinary hearing, thereby unilaterally terminating her own employment. The Appellant relied on the witness statement of its Managing Director, Lydia Muthoni Wahome, who categorically stated that the Respondent’s employment was never terminated by the Appellant and that the Respondent terminated her employment unilaterally upon being given an opportunity to show cause. On appeal, the Appellant distils its grounds into one overriding issue: whether the trial court erred in finding that the Respondent’s employment was unfairly terminated. The Appellant contends that the Respondent bore the initial burden under Section 47(5) of the Employment Act,2007 of proving that her employment was terminated and that such termination was unfair. The Appellant relies on the authority of **Pius Machafu Isindu v Lavington Security Guards Limited [2017] KECA 225 (KLR)** for the proposition that when the employee proves unfair termination, then the employee is called upon under Section 43(1) to prove the reasons for the termination. The Appellant further submits that the show cause letter produced by the Respondent, far from proving termination, actually demonstrates that a disciplinary process was underway and that the Respondent’s departure from the workplace upon receiving that letter amounted to desertion. The Appellant argues that the trial court’s reliance on the authority of **Boniface Nkubi Karagania v Protective Custody Limited [2019] eKLR** was misplaced because the Appellant’s case was never premised on desertion as a ground of termination, rather, it was the Respondent who unilaterally ended the employment by abandoning the workplace. The Respondent’s case in the trial court was that on 27th August, 2022 she received a show cause letter regarding cash deficits. Before she had any meaningful opportunity to respond, the Appellant’s Branch Manager, one, Moses Maingi, directed her to go home and await a telephone call from the Appellant. That call was never made. Two weeks later, the Respondent returned to the Appellant’s offices to enquire about the status of her employment and to seek her unpaid salary for August, 2022. She was denied entry by security guards acting on the instructions of the Appellant’s director. The Appellant subsequently paid and then reversed her August, 2022 salary. From that point henceforth, the Respondent received no further communication from the Appellant regarding her employment. On appeal, the Respondent submits that the trial court’s finding was correct and should be upheld. She contends that her return to the workplace two weeks after being sent home plainly demonstrates a continued intention to work, which is wholly inconsistent with desertion. She further argues that the Appellant had her permanent address on record pursuant to Section 10(2)(a) of the Employment Act,2007 and could have summoned her to a disciplinary hearing at any time but failed to do so. The absence of a resignation letter, the denial of entry to the premises and the reversal of her salary payment collectively establish, on a balance of probabilities, that the Appellant terminated her employment through its own conduct. The Respondent relies on **Boniface Nkubi Karagania v Protective Custody Limited [2019] KEELRC 152 (KLR)** and submits that desertion requires clear and overt acts demonstrating that the employee has no intention to return to work which evidence is entirely absent on the facts of this case. The duty of this court as a first appellate court is to re-evaluate the evidence on the record, make its own findings of fact and arrive at its own independent conclusions on whether or not to allow the appeal, bearing in mind that it did not have the opportunity of seeing and hearing the witnesses at first instance. This is enunciated in the celebrated authority of **Selle and Another v Associated Motor Boat Co. Ltd [1968] EA 123** and **Peters v Sunday Post Limited [1958] EA 424.** This court also has jurisdiction to reverse or affirm the findings of the trial court on questions of both fact and law. The issues that arise for determination in this appeal therefore are: 1. Whether the trial court erred in finding that the Respondent’s employment was unfairly terminated. 2. Whether the awards made by the trial court were properly granted and correctly computed. The 1st issue for determination is whether the trial court erred in finding that the Respondent’s employment was unfairly terminated. Section 47(5) of the Employment Act,2007 places the initial burden on the employee to prove that an unfair termination has occurred while the burden of justifying the grounds of the termination rests on the employer. The employee must at the onset establish *a prima facie* case of unfair termination of employment whereupon the employer comes in to justify such termination. The Appellant relies heavily on the authority of **Pius Machafu Isindu v Lavington Security Guards Limited [2017] KECA 225 (KLR)** for the proposition that the Respondent did not lay the necessary foundation to trigger the employer’s evidential burden. This reliance, with respect, is misplaced. In **Pius Machafu Isindu** above, the employee’s account of termination was riddled with contradictions and the consistent and unchallenged evidence of the employer’s witnesses was that the employee refused to attend a refresher course and then simply disappeared, making no protest for over five months before filing suit. The Court of Appeal found that this employee had not laid any foundation requiring the employer’s response under Section 43. Those facts bear no resemblance to those before this court. In the present case, the following facts are not in material dispute: the Respondent was issued with a show cause letter on 27th August 2022; the Appellant’s Branch Manager thereafter directed her to go home and await a call; no such call was ever made. Two weeks down the line, the Respondent returned to the Appellant’s premises to seek clarification on her employment status and was denied entry on the specific instructions of the Appellant’s director. Again, the Appellant paid and then reversed the Respondent’s salary for August, 2022 and no letter of termination was ever issued. On those facts, the Respondent has more than adequately discharged their burden under Section 47(5). She did not disappear or abandon her post. She was sent away by the management, attempted to return and was physically barred from the premises. She also lost her salary through the machinations of the employer. These are the hallmarks of employer-initiated termination, not employee desertion. The Appellant’s further argument is that the Respondent deserted the workplace and thereby unilaterally terminated her own employment. The burden of establishing desertion rests on the employer and is a high one. As this court observed in **Boniface Nkubi Karagania v Protective Custody Limited [2019] eKLR**, desertion requires clear and overt acts demonstrating that the employee has no intention to return to work. The burden of proof for an unjustified refusal to work rests on the employer. The Respondent’s conduct – returning to the workplace within two weeks, seeking to see the Director, and instructing advocates to issue a demand letter in January 2023 is entirely inconsistent with any intention to abandon employment. The Appellant produced no call logs, no written correspondence, no follow-up communication of any kind after sending the Respondent home. The show cause letter is not evidence of desertion; it is merely the starting point of a disciplinary process that the Appellant chose never to complete. On the question of procedural fairness, Section 41(1) of the Employment Act,2007 requires an employer, before terminating employment on the grounds of misconduct, to explain the reason for the proposed termination to the employee and to afford the employee an opportunity to be heard. Section 41(2) further requires the employer to hear and consider any representations the employee may make before proceeding to dismiss. These requirements were not met. The Appellant issued a show cause letter, sent the Respondent home and then allowed the disciplinary process to lapse entirely without taking any further step. An employer cannot convert its own failure to conclude a disciplinary process into evidence that the employee deserted. On the authority of **Ronald Nyambu Daudi v Tornado Carriers Limited [2019] eKLR**, an employer alleging desertion must show efforts made towards reaching out to the employee and putting them on notice that termination on this ground is under consideration. No such efforts were made here. The trial court’s reliance on this authority and on **Boniface Nkubi Karagania v Protective Custody Limited [2019] eKLR** was therefore appropriate, and the finding that the Respondent’s termination was both substantively and procedurally unfair cannot be faulted. This ground of appeal fails. The 2nd issue for determination is whether the awards made by the trial court were properly granted and correctly computed. In the instant case, having found that the Respondent was unfairly terminated, the trial court awarded compensation of Kshs. 171,000/= being six (6) months’ salary under Section 49(1)(c) of the Employment Act aforecited. The Respondent worked for approximately 8.2 years. The discretion to award up to 12 months’ compensation was exercised reasonably. An award of 6 months for a long-serving employee was well within the range of judicial discretion and is supported by the authority of **Wanyera v Central Isiolo Investment Limited (Appeal E002 of 2023) [2024] KEELRC 596 (KLR**.**)** The Appellant has not demonstrated that the trial court misdirected itself in the exercise of that discretion. As the Court of Appeal observed in **Kimathi v Ericsson Kenya Limited (Civil Appeal 601 of 2019) [2023] KECA 106 (KLR)**, this court ought not to interfere with the exercise of judicial discretion unless the trial court was clearly wrong and occasioned injustice. No such misdirection has been demonstrated. The award of one month’s notice pay of Kshs. 28,500.00 is proper under Section 44(2) as read together with Section 36 of the Employment Act, 2007. This is because no notice was given and no payment in lieu of such notice was made. The award of Kshs. 28,500.00 for unpaid August, 2022 salary is equally sustainable. The Respondent worked throughout August, 2022. The Appellant paid and then reversed the salary payment. The Respondent has sworn to this fact in her affidavit and exhibited a bank statement. The Appellant, as the custodian of employment records under Section 74 of the Employment Act,2007 produced no evidence of actual payment. This award stands and is permissible. On house allowance, the trial court awarded Kshs. 153,900.00 representing 15% of salary for 3 years, correctly limiting the claim to 3 years following the principle in **Charles Kariuki Mwangi v Intersecurity Services Limited [2018] eKLR**. The Respondent was never housed by the Appellant and was not paid house allowance. The Appellant has not demonstrated that the salary paid was consolidated so as to include house allowance. Section 10(7) of the Employment Act,2007 places the burden of proving or disproving a term of employment on the employer where no written particulars have been produced that clarify the position. The Appellant’s letter of offer left the basic salary figure blank and specified no consolidated pay arrangement. The award is accordingly proper and this ground of appeal also fails. In consideration of the Record of Appeal, the submissions of the parties, the evidence adduced at trial and the applicable law this court finds that the trial court did not err in fact or in law in coming up with its finding and conclusions. I am therefore inclined to dismiss the appeal and order as follows; 1. The judgment of the trial court in MCELRC 657 of 2023 delivered on 17th January 2025, including all orders and awards therein be and is hereby affirmed. 2. For the avoidance of doubt, the total sums awarded and affirmed are as follows: Six (6) months Compensation for unfair termination of employment....Kshs. 171,000.00 One (1) months salary in lieu of notice pay…………………………….Kshs. 28,500.00 Unpaid salary for August, 2022…………………………………………Kshs. 28,500.00 Three (3) years house allowance at 15%...............................................Kshs. 153,900.00 **Total of award……………………………………………………….Kshs. 381,900.00** 1. Interest on the total award at court rates from the date of filing the suit until payment in full. 2. The Appellant is ordered to issue the Respondent with the Certificate of Service in thirty (30) days from this judgment of court. 3. The costs of this appeal shall be borne by the Appellant. Delivered, dated and signed this **15th** day of **July** 2026. **D. K. Njagi Marete** **JUDGE** **Appearances:** 1. Mr. Machina instructed by Machina & Company Advocates for the Appellants. 2. Miss Kariuki instructed by Lemmy Regau & Company Advocates for the Respondent.