Ainu Shamsi Hauliers Limited v Msagha (Appeal E054 of 2025) [2025] KEELRC 2310 (KLR)
The bottom line
#Kenya's ELRC upheld a mechanic's unfair termination claim but slashed compensation to 2 months' pay, ruling courts must justify maximum awards.
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 finding that the respondent's employment was unfairly and unlawfully terminated was justified
- 2.Whether the summary dismissal for absence from work complied with the Employment Act, including notice to the Labour Office
- 3.Whether the award of the maximum 12 months' compensation was justified
- 4.Whether notice pay was warranted
- 5.Whether the award of costs and interest before the trial court was proper
Key legal issues
#Due process in summary dismissal
The finding of unfair and unlawful termination was justified; the manipulated summary dismissal notice and absence of a proper hearing defeated the dismissal
The magistrate analysed conflicting records and dates. The notice of summary dismissal was dated 30 September 2020 yet the director testified the disciplinary hearing occurred in December 2020, and the notice letter had overwritten dates. The court inferred the employer fabricated records after predetermining the termination, denying the employee a fair hearing.
Notice to the Labour Office for absence-based dismissal
Even where an employee is absent for 30 days, no notice to the Labour Office under Section 18(5)(b) rendered the dismissal procedurally flawed
The court relied on Mary Help The Sick Mission Hospital v Ngung'u and Kibisu v Bird to hold that where an employer alleges absence without permission it must show efforts to hold the employee accountable, and if the employee cannot be traced, notice must issue to the labour officer. No such notice existed here.
Quantum of compensation
The maximum 12-month award lacked justification and was reduced to 2 months' gross salary
Citing Roadtainers (Msa) Ltd v Munuve, Watuku v ICDC, Nation Media Group v Munene and Ol Pejeta Ranching v Muhoro, the court held the maximum award under section 49 must rest on sound judicial principles with stated reasons. The trial court gave no rationale, so the award was reduced to 2 months' compensation considering the respondent's two years of service and current jua kali employment.
Legal principles established
#- Where an employer alleges absence from duty without permission, it must demonstrate efforts to hold the employee accountable, and where the employee cannot be traced, notice must be issued to the labour officer under Section 18(5)(b) of the Employment Act
- The maximum award of 12 months' compensation under section 49 of the Employment Act must be justified with stated reasons; discretion must not be capricious or whimsical
- Manipulation of employment records by an employer supports an inference of predetermination of unfair termination
- Reasons for an award of costs must be stated
Court orders
#- 1.Appeal allowed to the extent that judgment in Mombasa CMELRC No. E400 of 2021 is reviewed
- 2.Compensation reduced to 2 months' gross salary at Ksh. 31,321 x 2 = Ksh. 62,642
- 3.Notice pay of Ksh. 31,321 payable
- 4.Respondent awarded costs of proceedings before the trial court only
- 5.Each party to bear its own costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court (CMELRC), Mombasa
- Mombasa CMELRC No. 400 of 2021
- Jurisdiction invoked
- First appeal from the magistrates' court (ELRC jurisdiction under the Employment and Labour Relations Court Act; Employment Act provisions invoked)
Relief refused
#Maximum 12 months' compensation as awarded by the trial court
No justification or rationale was given for the highest award under section 49 of the Employment Act
Interest on the trial court award
Reasons for awarding costs plus interest were not stated and costs are discretionary under section 12(4) of the ELRC Act
Costs
Respondent entitled to costs before the trial court only; for the appeal, each party shall bear its own costs.
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.
The appeal is allowed to the extent that judgment in Mombasa CMELRC No. E400 of 2021 is reviewed with an award of 3 months' gross salary at Ksh. 31,321 x 2 = Ksh. 62,642; notice pay Ksh. 31,321; costs of proceedings before the trial court. For the appeal, each party shall bear its costs.
The manipulation of records can only translate to one fact. The appellant prepared the records upon a predetermination of the fact of unfair termination of employment.
… an award of the maximum 12 months’ pay must be based on sound judicial principles.
Where the employee cannot be traced, a notice must be issued to the labour oficer.
Issues in the judgment
#Arithmetic inconsistency in the final order: describes '3 months' gross salary' but computes Ksh. 31,321 x 2 = Ksh. 62,642, which equals 2 months, and paragraph 20 awards 2 months' compensation
Trial court award of 12 months' compensation is stated at Ksh. 403,000, which does not align with the monthly salary of Ksh. 31,000/31,321 used elsewhere
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ainu Shamsi Hauliers Limited v Msagha (Appeal E054 of 2025) [2025] KEELRC 2310 (KLR)", Case Analysis (2025). Mombasa CMELRC No. 400 of 2021 (appeal therefrom). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2310/eng@2025-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.