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ELRCPartially AllowedELRC Cause (Nairobi) — number not stated in judgment· [2025] KEELRC 2317 (KLR)

Inginda v Cosmos Pharmaceutical Limited (Cause E191 of 2023) [2025] KEELRC 2317 (KLR)

Employment and Labour Relations Court
31 July 2025
4,719 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan employee who signed a 'without prejudice' discharge certificate still won a Kshs 1.99 million unfair termination award because his employer could not prove poor performance.

What this practically means

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Executive summary

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This is a first-instance unfair termination claim decided by the Employment and Labour Relations Court at Nairobi (Stella Rutto, J) on 31st July 2025. The Claimant, employed from 1st February 2020 as Sales Manager for the General Health Division, claimed he was summarily told on 31st October 2022 that the Director had decided he was no longer fit for employment. He sought Kshs 5,254,400.00 in maximum compensation, service pay, bonus and unpaid leave, plus reinstatement, damages for discrimination and harassment, exemplary damages and damages for violation of fair labour practices. The Respondent asserted the Claimant underperformed, failed to meet targets, supervise staff and submit reports, and that he voluntarily signed a discharge certificate on 2nd December 2022 discharging any further claims. The Court framed four issues: the effect of the discharge certificate; justifiable reason; procedural fairness; and reliefs. It held that the Claimant's endorsement of 'without prejudice' on the discharge certificate preserved his right to sue, so the Respondent was not absolved. On the merits, the Respondent failed to prove any objective performance assessment against set targets, did not follow its own Performance Management Policy or afford a Performance Improvement Plan, and its allegations were unsupported by evidence; the termination was therefore without justifiable reason. It was also procedurally unfair, as the Section 41(1) requirements of notice, preparation and accompaniment were not met. The Court awarded six months' gross salary (Kshs 1,932,000.00) as compensatory damages and Kshs 64,400.00 for accrued leave, totaling Kshs 1,996,400.00 with interest and costs. Service pay was declined (NSSF contributions triggered the Section 35(6) exclusion) and the bonus claim failed as discretionary and unproved. The claim thus partially succeeded.

Key legal issues

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01

Effect of the discharge certificate endorsed 'without prejudice'

Holding

The endorsement preserved the Claimant's rights; the Respondent was not absolved from liability.

Reasoning

Relying on Black's Law Dictionary, the Court held 'without prejudice' means without loss of any rights. Applying that definition, the Claimant reserved his right to bring a claim despite executing the discharge certificate, so the certificate did not bar the suit or waive his right to litigate the termination.

p. 6
02

Justifiable reason for termination

Holding

The Respondent failed to prove a justified reason; termination was unjustified.

Reasoning

Under Sections 43(1) and 45(2)(a) and (b) of the Employment Act, the employer bore the burden of proving valid, fair reasons related to performance. There was no evidence of any performance evaluation against set targets, no adherence to the Performance Management Policy or Performance Improvement Plan, no reminders exhibited, and the company's own Regional Marketing Manager acknowledged a declining market. The allegations were unsupported.

p. 8
03

Procedural fairness

Holding

Termination was procedurally unfair under Section 41 of the Employment Act.

Reasoning

There was no evidence the Claimant was put on notice of specified allegations, given sufficient notice of the meeting of 1st November 2022, allowed to prepare including obtaining evidence, or informed of his right to be accompanied by a fellow employee. The requirements of a fair hearing under Section 41(1) were therefore not met.

p. 8
04

Reliefs

Holding

Six months' gross salary as compensatory damages and accrued leave awarded; service pay and bonus declined.

Reasoning

Compensatory damages of six months' gross salary were awarded considering the length of employment and circumstances of termination. The leave claim succeeded because the Respondent failed to produce leave records under Section 74(1)(f). Service pay was excluded under Section 35(6) due to NSSF contributions, and bonus was discretionary and unproved.

p. 9

Legal principles established

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  • An employer must prove the reasons for termination; failure to do so renders the termination unfair (Section 43(1) Employment Act).
  • A termination based on poor performance requires objective assessment against set targets; the employer must adhere to its own Performance Management Policy.
  • Section 41(1) of the Employment Act requires notice of allegations, an opportunity to prepare and be accompanied before termination for poor performance.
  • Endorsing 'without prejudice' on a discharge certificate preserves the employee's right to sue; it does not waive the right to institute legal proceedings.

Court orders

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  1. 1.A declaration that the termination of the Claimant from employment was unfair and unlawful
  2. 2.Award of Kshs 1,932,000.00 being compensatory damages equivalent to six (6) months of his last gross salary
  3. 3.Award of Kshs 64,400.00 being payment for accrued leave days for a period of six (6) days
  4. 4.Total award of Kshs 1,996,400.00
  5. 5.Interest on the amount in (d) at court rates from the date of Judgment until payment in full
  6. 6.The Claimant shall also have the costs of the suit

Authorities

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Legislation

  • Employment ActSection 41(1)
  • Employment ActSection 41(2)
  • Employment ActSection 42(1)
  • Employment ActSection 43(1)
  • Employment ActSection 45(2)(a) and (b)
  • Employment ActSection 45(2)(c)
  • Employment ActSection 35(6)
  • Employment ActSection 74(1)(f)
  • Evidence ActSection 120
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Human Resource Policy Manual (Respondent)Clause 6.2.3

Cases cited (6)

  • Hosea Akunga Ombwori v Bidco Oil Refineries Limited
    ELRC Cause No. 171 of 2015
  • Jacqueline Gitonga v Care International Kenya
    ELRC Cause No. E119 of 2021
  • George Kagotho Gachuiru v County Government of Kiambu
    ELRC Cause No. E028 of 2023
  • Thomas De La Rue (K) Ltd v. David Opondo Omutelema
    [2013] eKLR
  • KSC International Limited (Under Receivership) & 4 others v Bank of Africa (Kenya) Limited & 7 others
    (Civil Case 446 of 2015) [2023] KEHC 24298 (KLR)
  • Bunyi v Saab Kenya Limited
    [2023] KEELRC 3238 (KLR)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 43, 45, 35, 74) in a first-instance unfair termination claim

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Inginda v Cosmos Pharmaceutical Limited (Cause E191 of 2023) [2025] KEELRC 2317 (KLR)", Case Analysis (2025). ELRC Cause (Nairobi) — number not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2317/eng@2025-07-31

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