https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2190

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT NAKURU CAUSE NO. E052 OF 2025 (Before Hon. Lady Justice Anna Ngibuini Mwaure) PETER NUTHUA WAIRIMU………………..…..…… CLAIMANT VERSUS NGIRABI ENTERPRISE…………..………..…….1ST RESPONDENT JOSEPH KAZUNGU MWANGI…………..…..2ND RESPONDENT JUDGMENT Introduction 1. The Claimant commenced this suit via a memorandum of Claim dated 2nd September 2025, seeking the following orders that: a) A declaration that the dismissal was unlawful, unfair, and unconstitutional. b) Payment of Kshs.1,042,200/= being one month’s salary in lieu of notice, salary of July 2025(unpaid), untaken annual leave, service pay, compensation for unfair termination (12 months’ salary), overtime, work on public holidays, and house allowance. ELRC CAUSE NO. E052 OF 2025 RULING 1 | P A G E c)Payment in respect of untaken annual leave for the entire duration of employment. d) Overtime compensation for hours worked beyond the statutory maximum. e) Payment for work performed on public holidays. f) Housing allowance arrears for the entire duration of employment in breach of section 31 of the Employment Act. g) Issuance of a Certificate of Service under Section 51 Employment Act, 2007. h) Interest at court rates on (b)–(f) from the date of filing until payment in full. i) Costs of this claim. j) Any further relief this Honourable Court may deem just and equitable. Claimant’s case 2. The Claimant avers that vide a letter of offer dated 15th March 2022, the Respondents engaged him as a Driver effective 26th March 2022 at a gross monthly salary of Kshs. 30,000/=. 3. The Claimant avers that he diligently and loyally served the Respondents for over three years, from March 2022 until July 2025, without blemish, ELRC CAUSE NO. E052 OF 2025 RULING 2 | P A G E warnings, or disciplinary issues. In July 2025, however, the Respondents abruptly and summarily dismissed him without notice, without issuing a termination letter, and without affording him a hearing, instead falsely accusing him of theft without substantiating the allegation or complying with the mandatory safeguards under section 41 of the Employment Act, 2007. 4. The Claimant avers that the Respondents further withheld his July 2025 salary and failed to pay any terminal dues. The dismissal was unlawful, unfair, and unconstitutional, contravening Sections 35, 36, 41, 45, 28, 31, 27, and 74(1)(f) of the Employment Act, 2007, as well as Articles 41 and 47 of the Constitution of Kenya, 2010. In particular, the Respondents failed to grant or pay annual leave for the entire period of service, failed to compensate for overtime and public holiday work, failed to provide housing or pay the statutory housing allowance of at least 15% of basic pay, withheld the Claimant’s July 2025 salary, and subjected him to unlawful dismissal without notice, valid reason, or hearing. Respondent’s response to the memorandum of claim ELRC CAUSE NO. E052 OF 2025 RULING 3 | P A G E 5. In opposition to the memorandum of claim, the Respondent filed a response to the memorandum of claim dated 25th October 2025. 6. The Respondents deny the Claimant’s allegations, emphasizing that his employment was governed by renewable one-year contracts with a consolidated salary of Kshs.30,000/= inclusive of housing allowance and annual leave entitlements. While acknowledging his service from March 2022 to July 2025, they argue that his record was tainted by serious misconduct in July 2025, when he allegedly misappropriated gas cylinders worth Kshs.286,980/=, leading to his arrest and arraignment for stealing by servant. 7. The Respondents insist that the Claimant deserted his employment thereafter, and therefore no dismissal was effected, making claims of unlawful termination premature and misconceived. 8. The Respondents justify withholding his July 2025 salary under Section 19(1) of the Employment Act due to the loss of company property, and categorically deny liability for notice pay, leave pay, overtime, holiday pay, housing allowance, or compensation for unfair termination. ELRC CAUSE NO. E052 OF 2025 RULING 4 | P A G E 9. The Respondents maintain that they acted lawfully, fairly, and within statutory and constitutional bounds, and that any termination would have been justified under Section 44(4) of the Employment Act for gross misconduct. In their view, the Claimant’s demands are baseless, speculative, and unsupported by evidence, with the burden of proof squarely resting on him. Claimant’s reply to the Respondent’s response to memorandum of claim 10. The Claimant filed a reply to the Respondent’s response to memorandum of claim dated 25th February 2026. 11.The Claimant’s reply challenges the Respondents’ defence as mere denials unsupported by evidence, insisting that his employment was governed by successive written contracts renewed from 2022 to 2025, which confirmed satisfactory service. 12. The Claimant disputes allegations of misconduct, theft, and abscondment, stressing that no show-cause letter, suspension, or disciplinary hearing was ever issued, and that reliance on criminal charges does not discharge the employer’s statutory burden. ELRC CAUSE NO. E052 OF 2025 RULING 5 | P A G E 13. The Claimant maintains that withholding his July 2025 salary, denying house allowance, overtime, leave, and public holiday pay was unlawful, as the Respondents failed to produce statutory records such as payslips, leave registers, or overtime schedules. 14. The Claimant asserts that the Respondents’ conduct treating him as guilty, involving police action, repossessing his vehicle, and failing to facilitate resumption of duty amounted to constructive dismissal. 15. The Claimant prays for judgment as sought in the Memorandum of Claim, including notice pay, compensation for unfair termination, and statutory entitlements. Claimant’s evidence in court 16. CW1, the Claimant, adopted his written statement dated 2nd September 2025 together with the list of document dated even date and supplementary list of documents dated 25th February 2026 marked exhibits 1 to 7 as his evidence in chief. ELRC CAUSE NO. E052 OF 2025 RULING 6 | P A G E 17. CW1 testified that on 25th July 2025 he reported to work, collected his assigned vehicle at Shell Petrol Station, and met his manager, Mr. Oscar Chemutai, to fuel the car. Together they proceeded to the Free Area store where gas cylinders were kept. At about 9:00 a.m., CW1 discovered that the designated salesperson, Allan Kiptoo, was absent. Hillary Oduor, who usually assisted with loading, was present, but both he and Oscar were unable to reach Allan by phone. Oscar then contacted Ngirabi, the proprietor, who instructed him to open the vehicle and conduct a stock-take. Upon inspection, 115 small gas cylinders were found missing. CW1 explained that he had dropped Allan the previous day. 18. Shortly thereafter, a Probox vehicle arrived carrying four men who informed CW1 that he was required to record a statement at Nakuru Police Station. He was taken into custody, detained until Monday, and arraigned in court on charges of stealing gas cylinders. He was released on cash bail of Kshs.70,000/=. CW1 stated that after his release he contacted Oscar to inquire about resuming work but was told that another driver from Eldoret had already been ELRC CAUSE NO. E052 OF 2025 RULING 7 | P A G E engaged to take over his duties. Consequently, he did not return to work, and the criminal case remains pending. 19.In cross-examination, CW1 confirmed that he was employed in March 2022 under a contract dated 15th March 2022, with subsequent renewals. His role was described as driver and salesperson, though in practice he only performed driving duties. He earned a salary of Kshs.30,000/= but was not paid a separate housing allowance. He never went on annual leave and was unaware that leave entitlement could lapse after one and a half years. He worked for about three and a half years, but in 2025 no new contract was issued. 20.CW1 further testified that on 24th July 2025 he transported gas cylinders with his colleague for sale. His responsibility was limited to delivery, while the salesperson handled sales and payments. He stated that he dropped the salesperson at Bahati to load money into M-PESA but did not accompany him. Later, he returned the vehicle to the depot. He was arrested the following day, charged in court, and released on bond. Upon release, he learned that his ELRC CAUSE NO. E052 OF 2025 RULING 8 | P A G E July salary had not been paid and that another driver had replaced him. 21. CW1 emphasized that the missing money and cylinders were the responsibility of the salesperson, not him. He maintained that he was a driver, not a custodian of sales proceeds, and denied any wrongdoing. His evidence underscores that he was arrested and replaced without being subjected to any internal disciplinary process, his salary was withheld, and his employment was effectively terminated under contested circumstances. 22. In re-examination, CW1 clarified that although his contract described him as both a driver and salesperson, in practice his duties were limited to driving. He testified that his instructions came directly from the company owner, who required him to transport gas cylinders to buyers while his colleague, Allan Kiptoo Yego, handled the sales, collected payments, and issued receipts. CW1 emphasized that he worked alongside Kiptoo for about three years under this arrangement, consistently performing only driving duties. He reiterated that he was not paid his salary for July ELRC CAUSE NO. E052 OF 2025 RULING 9 | P A G E 2025 and stressed that the court has not found him guilty of any offence. Respondent’s evidence in court 23. RW1, Joseph Kazungu Mwangi, the 2nd Respondent, adopted his witness statement dated 10th February 2026 together with the bundle of documents dated even date marked as exhibit 1 to 8 as his evidence in chief. 24.In cross-examination, RW1 testified that Ngirabi Enterprises was his company and that he routinely deployed two workers per vehicle: a driver and a salesperson. The salesperson, Hillary, was responsible for generating receipts and transmitting sales proceeds to Mr. Mwangi, while customers were expected to pay through the till, though cash payments were occasionally received. RW1 admitted that although he issued contracts of employment, he had no formal company policy and had not provided the Claimant with a written job description. He confirmed that on 25th July 2025 he reported the Claimant to the police, resulting in his arrest, and acknowledged that the Claimant had not been paid his July salary. He further conceded that no disciplinary proceedings had been conducted prior to the arrest, though he maintained that a ELRC CAUSE NO. E052 OF 2025 RULING 10 | P A G E notice to show cause and invitation to a disciplinary hearing had subsequently been issued, which the Claimant failed to attend. RW1 insisted that he had evidence implicating the Claimant in theft, noting that both the driver and salesperson handled money and that Hillary transmitted funds more frequently. 25.Upon re-examination, RW1 clarified that the company contracts did in fact provide for job descriptions, though there was no concrete company policy. He reiterated that the Claimant absconded duty and was thereafter terminated, having been entrusted with gas cylinders alongside his colleague. He stated that Hillary was the designated salesperson and remained at large, while the Claimant had neither demanded his July salary nor maintained contractual engagement with the company. 26. Parties filed their respective written submissions. Claimant’s submissions 27.The Claimant submitted that his termination was both substantively unjustified and procedurally unfair, contrary to the Employment Act, 2007 (hereinafter referred to as the Act) and the Constitution of Kenya, 2010. Section 43(1) of ELRC CAUSE NO. E052 OF 2025 RULING 11 | P A G E the Act imposes upon the employer the burden of proving valid reasons for termination, and section 43(2) renders a termination conclusively unfair where such proof is absent. In Mary Chemweno Kiptui v Kenya Pipeline Company Limited [2014] KEELRC 905 (KLR), the court affirmed that dismissal must be supported by credible evidence. Here, the Respondents merely alleged theft of gas cylinders without producing dispatch records, route sheets, or stock documents, and further disregarded the Claimant’s limited role as a driver. 28. On procedure, the Claimant relied on section 41 of the Act and Walter Ogal Anuro V Teachers Service Commission [2013] KEELRC 386 (KLR) and Isindu v Lavington Security Guards Ltd [2017] KECA 225 (KLR), the courts held that no matter the gravity of misconduct, an employee must be accorded a hearing with the right to representation. The Respondents admit they issued no show-cause letter and convened no disciplinary hearing, instead outsourcing their disciplinary mandate to the police. This omission fatally undermines their defence. ELRC CAUSE NO. E052 OF 2025 RULING 12 | P A G E 29. The plea of desertion is equally untenable. Desertion requires proof of intent not to return and reasonable efforts to trace the employee. In Francis Wamalwa v G4S Security Services Kenya Ltd [2015] eKLR, the court held that an employer cannot plead desertion where its own actions such as instigating arrest or withholding salary made return impossible. The Respondents procured the Claimant’s incarceration, withheld his July salary, and replaced him with another driver, amounting to constructive dismissal. 30. Further, the Claimant submitted that breaches include failure to prove payment of housing allowance under section 31 of the Act, contrary to Thomas De La Rue (K) Ltd v Omutelema [2013] KECA 492 (KLR), and failure to produce leave records under section 74(1)(f) of the Act, as emphasized in Daniel N. Njoroge v Standard Chartered Bank Kenya Ltd [2015] eKLR. The Respondents also unlawfully withheld July salary and failed to issue a certificate of Service as required by section 51 of the Act. ELRC CAUSE NO. E052 OF 2025 RULING 13 | P A G E 31.For the reliefs sought, the Claimant submitted that he is entitled to them and urged the court to allow the claim as prayed. 32. At the time of writing this judgment, the Respondent had not filed their submissions. Analysis and determination 33. The court has considered the pleadings and the submissions on record; the issues for determination are as follows: a. Whether the Claimant was unlawfully and unfairly terminated by the Respondent; b. If(a) above is in the affirmative, whether the Respondent is entitled to the reliefs sought; c. Who should bear the costs? 34. The twin principles for fair termination are procedural fairness and substantive justification as set out in sections 41, 43 and 45(2) of the Employment Act. In Walter Ogal Anuro V Teachers Service Commission(supra) the court held as follows: “However, for a termination to pass the fairness test, it must be shown that there was not only substantive ELRC CAUSE NO. E052 OF 2025 RULING 14 | P A G E justification for the termination but also procedural fairness.” 35. In Isindu v Lavington Security Guards Ltd(supra) the Court of Appeal held as follows: “There can be no doubt that the Act, which was enacted in 2007, places heavy legal obligations on employers in matters of summary dismissal for breach of employment contract and unfair termination involving breach of statutory law. The employer must prove the reasons for termination/dismissal (section 43); prove the reasons are valid and fair (section 45); prove that the grounds are justified (section 47 (5), amongst other provisions. A mandatory and elaborate process is then set up under section 41 requiring notification and hearing before termination. The Act also provides for most of the procedures to be followed thus obviating reliance on the Evidence Act and the Civil Procedure Act/Rules. Finally, the remedies for breach set out under section 49 are also fairly onerous and generous to the ELRC CAUSE NO. E052 OF 2025 RULING 15 | P A G E employee. But all that accords with the main object of the Act as appears in the preamble: “..to declare and define the fundamental rights of employees, to provide basic conditions of employment of employees.." Those provisions are a mirror image of their constitutional underpinning in Article 41 which governs rights and fairness in labour relations. Section 47 (5) of the Act provides for the procedure to be followed in matters of complaints of unfair termination as follows: “For any complaint of unfair termination of employment or wrongful dismissal the burden of proving that an unfair termination of employment or wrongful dismissal has occurred shall rest on the employee, while the burden of justifying the grounds of the termination of employment or wrongful dismissal shall rest on the employer.” [Emphasis added] So that, the appellant in this case had the burden to prove, not only that his services were terminated, but also that the termination was unfair or wrongful. Only when this foundation has been laid will the employer be called upon under ELRC CAUSE NO. E052 OF 2025 RULING 16 | P A G E section 43 (1): "to prove the reason or reasons for the termination, and where the employer fails to do so, the termination shall be deemed to have been unfair within the meaning of section 45.” 36. In this instant case, the Claimant was employed under a contract dated 15th March 2022 on a salary of Kshs. 30,000/= with allowances of Kshs.12,000. He alleges unlawful termination following his arrest for stealing by servant. The Respondents counter that he served under renewable one-year contracts with a consolidated salary of Kshs.30,000 inclusive of housing and leave. While acknowledging his service until July 2025, they accuse him of misappropriating gas cylinders worth Kshs.286,980, leading to his arrest, and argue that he deserted employment thereafter. They justify withholding his July salary under Section 19(1) of the Employment Act, deny liability for any dues, and maintain that any termination would have been justified under Section 44(4) for gross misconduct. They dismiss his claims as speculative, baseless, and unsupported by evidence, placing the burden of proof on him. ELRC CAUSE NO. E052 OF 2025 RULING 17 | P A G E 37. Sections 41, 43, and 45(2) of the Employment Act cited deal very categorically with provisions that an employer must comply before he can terminate the employee. Section 47(5) of Act. places the burden on the employer to justify termination, yet in this case no notice to show cause was issued regarding the alleged missing cylinders or money. Although the Claimant was arrested, he retained the constitutional right to be heard under Article 50 of the Constitution which must be applied alongside the procedural safeguards in Section 41 of the Employment Act. These twin principles of substantive and procedural justification operate together and cannot be separated. 38. The case of POSTAL CORPORATTIONOF KENYA - VS- ANDREW TANUI 2019 (eKLR) The Court of Appeal held that compliance with Section 41 is mandatory. An employee must be informed of allegations, allowed to respond and be accompanied by a fellow employee or union representative if desired. The existence of allegations including criminal ones does not remove this obligation. ELRC CAUSE NO. E052 OF 2025 RULING 18 | P A G E 39. Also, in Mwangi -vs- Solio Ranch Limited (2025) KEELRC 2390 (KLR) the court held that arrest alone was not a valid ground for termination under Section 44(4((f) of Employment Act because the employee had been put in custody. The court held that even if there was a valid reason, dismissal without complying with Sections 41 of Employment Act rendered termination unfair. 40. The court having considered the pleadings and submissions as well as case laws and applicable law, hold the Respondent terminated the Claimant unlawfully and wrongfully contrary to Sections 41,43,45(2) and 47(5) of the Employment Act. Judgment is entered in favour of the Claimant. 41. (a) For relief, the court awards the Claimant one month’s salary in lieu of notice amounting to Kshs.30,000/=together with unpaid July 2025 salary of Kshs.30,000/=. 41. (b) In addition, the court grants compensation for unfair termination equivalent to six months’ salary, calculated at Kshs.30,000 × 6 = Kshs. 150,000/=. Total award is Kshs.210,000/=. ELRC CAUSE NO. E052 OF 2025 RULING 19 | P A G E 41. (c) The other claims, including annual leave, service pay, overtime, public holiday work, and housing allowance, are declined for lack of proof as these are special prayers and there must be factual proof. 42. (d) The Claimant is awarded costs of the suit and interest at 14% per annum from date of Judgment till full payment. Orders accordingly. Dated, Signed and Delivered virtually at Nakuru this 29th Day of July, 2026. ANNA NGIBUINI MWAURE JUDGE ORDER In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In ELRC CAUSE NO. E052 OF 2025 RULING 20 | P A G E permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes. A signed copy will be availed to each party upon payment of Court fees. ANNA NGIBUINI MWAURE JUDGE ELRC CAUSE NO. E052 OF 2025 RULING 21 | P A G E