Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No E458 of 2023· [2025] KEELRC 145 (KLR)

Damu v Hanna Roses Limited (Cause E458 of 2023) [2025] KEELRC 145 (KLR)

Employment and Labour Relations Court
30 January 2025
LNLinnet Ndolo
963 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~4 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled that an employer cannot withhold an employee's salary over alleged losses without first giving the employee a fair hearing.

What this practically means

#

Executive summary

#
The Claimant, employed by the Respondent as Chief Executive Officer from February 2019 until November 2022, tendered a 90-day resignation notice running from 1st September 2022 to 30th November 2022 on a monthly salary of Kshs. 1,563,176. He claimed his salary for October and November 2022 was withheld while he was on leave during his notice period. The Respondent admitted the employment but denied the pleaded salary and asserted that the Claimant himself sought leave which was not allowed. It justified the withholding on the basis that outstanding amounts from goods supplied to customers, for which the Claimant could not account, remained unsettled, citing company policy requiring settlement of outstanding sales before clearance. The court found it undisputed that the salary for the two months was withheld and characterised the Respondent's action as a surcharge. Applying its earlier decision in Kenya National Library Services Board v Beatrice N. Ayoti and Section 41 of the Employment Act, the court held that a surcharge is a disciplinary action requiring procedural fairness, including a show cause notice and personal hearing. No such opportunity was afforded, rendering the withholding unlawful. Judgment was entered for the Claimant in the sum of Kshs. 3,126,352, subject to statutory deductions and attracting interest at court rates from the date of judgment. The claim for punitive damages was disallowed for lack of basis. The Claimant was awarded the costs of the case. Judgment was delivered virtually at Nairobi on 30th January 2025 by Linnet Ndolo, Judge.

Key legal issues

#
01

Lawfulness of withholding an employee's salary as a surcharge for alleged loss

Holding

Withholding salary on account of alleged loss amounts to a surcharge, a disciplinary measure requiring compliance with Section 41 of the Employment Act; absent a show cause notice and hearing, the withholding was unlawful.

Reasoning

The court accepted that the salary for October and November 2022 was withheld, and that the Respondent justified this on alleged loss caused by the Claimant's negligence. Relying on Kenya National Library Services Board v Beatrice N. Ayoti, the court held that a surcharge is disciplinary action requiring the Section 41 procedural fairness safeguards. Since no show cause notice or personal hearing was evidenced, the unilateral withholding was unlawful and the Claimant was entitled to the withheld salary.

p. 3

Legal principles established

#
  • A surcharge is a disciplinary action that can only be taken pursuant to the procedural fairness provisions of Section 41 of the Employment Act; a unilateral decision to surcharge an employee is outrightly unlawful and unfair.

Court orders

#
  1. 1.Judgment entered in favour of the Claimant in the sum of Kshs. 3,126,352 being withheld salary for October and November 2022
  2. 2.The amount is subject to statutory deductions
  3. 3.Interest at court rates from the date of judgment until payment in full
  4. 4.The Claimant is awarded the costs of the case

Authorities

#

Legislation

  • Employment ActSection 41(1)
  • Employment ActSection 41(2)
  • Employment ActSection 42(1)
  • Employment ActSection 44(3) and (4)

Cases cited (1)

  • Kenya National Library Services Board v Beatrice N. Ayoti
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, Section 41 cited)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Damu v Hanna Roses Limited (Cause E458 of 2023) [2025] KEELRC 145 (KLR)", Case Analysis (2025). Cause No E458 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/145/eng@2025-01-30

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.