Resort Kenya Ltd v Waithaka
The bottom line
#Kenya's Court of Appeal cut an unfair dismissal award from Kshs. 1 million to Kshs. 197,900, ruling a fraudulent accountant still deserved a fair hearing.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the judge erred in concluding that the appellant did not establish that it had valid reasons to dismiss the respondent summarily
- 2.Whether the finding by the trial judge that the respondent was not given an opportunity to present his case as envisaged under Section 41 is well founded in evidence
- 3.Whether the remedies granted to the respondent are legally justified
Key legal issues
#Whether the appellant established valid reasons for summary dismissal
Yes - the trial judge failed to evaluate corroborated evidence of the respondent's collusion in a fake-invoice fraud, so the finding of no valid reasons was against the weight of the evidence and was set aside
The Court, exercising its first-appeal mandate to re-evaluate evidence, found the testimonies of RW2 and RW3 corroborated the appellant's claim that the respondent was involved in a scheme of presenting fake invoices without actual deliveries, on which payments were processed. The respondent admitted receiving M-Pesa transfers from a supplier. The trial judge did not evaluate this evidence at all, so the appellant discharged its Section 43 burden.
Whether the respondent was afforded a hearing under Section 41
No - the termination was procedurally infirm even though substantively justified; the respondent had no prior notice of the charge and no adequate opportunity to respond
The respondent was summoned to the Managing Director's office, asked to explain his relationship with suppliers, then handed a summary dismissal letter. It was not evident he had prior notice of the reason he was summoned or of the charge against him. The opportunity given was not adequate, and the trial judge's finding on Section 41 was upheld.
Whether the remedies granted were legally justified
Partially - notice pay (recalculated to Kshs. 88,800.00), leave days and admitted salary were upheld; gratuity and the 8 months' compensation award were set aside
Having upheld the finding of procedural infirmity, the Court could not interfere with notice pay and admitted dues. Gratuity failed because the CBA extract excluded gratuity on summary dismissal for gross misconduct and the respondent was an NSSF member. The compensation award was set aside because the judge gave no reasons and the respondent's abuse of a position of trust disentitled him to a favourable exercise of discretion.
Legal principles established
#- Under Section 43 of the Employment Act the burden lies with the employer to prove the reason or reasons for termination, and the reasons are those the employer genuinely believed to exist at the time of termination
- Section 41(2) of the Employment Act requires an employer, before terminating or summarily dismissing an employee, to hear and consider any representations the employee may make; an opportunity given without notice of the charge is inadequate
- The discretion conferred on the court in making an award of compensation under Section 49 is not unfettered and must take into account the employee's contribution to his predicament
Court orders
#- 1.The finding that the appellant did not establish that it had valid reasons to dismiss the respondent summarily is set aside
- 2.The award in favour of the respondent in the amount of Kshs. 1,021,100.00 is set aside and substituted with a total award of Kshs. 197,900.00 (2 months' salary in lieu of notice Kshs. 88,800.00; leave days for 2010 to 2012 Kshs. 65,800.00; salary admitted Kshs. 43,300.00)
- 3.Each party will bear its own costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- ELRC Cause No. 837 of 2012
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate mandate (Employment and Labour Relations Court decision)
Relief refused
#Award of 8 months' salary (Kshs. 384,000.00) as compensation for unfair termination
The respondent, an accountant in a position of trust, abused it by colluding with suppliers to defraud the appellant, disentitling him to favourable exercise of discretion
Award of gratuity of Kshs. 432,000.00
The CBA extract showed gratuity was not payable on summary dismissal for gross misconduct, and the respondent was an NSSF member
Costs
Each party will bear its own costs of the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
We uphold the nding that the termination was procedurally inrm even though substantively justied.
The conclusion by the trial judge that the appellant did not have valid reasons for dismissing the respondent summarily is against the weight of the evidence.
In conclusion, the appellant’s appeal succeeds to the extent that:
The award in favour of the respondent in the amount of Kshs. 1,021,100.00 is hereby set aside and substituted with a total award of Kshs. 197,900.00
Each party will bear its own costs of the appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Resort Kenya Ltd v Waithaka", Case Analysis (2026). Civil Appeal 18 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1781/eng@2026-09-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.