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ELRCPartially AllowedNot stated in judgment· [2025] KEELRC 2424 (KLR)

Munialo v Muindi t/a Kageni Resort Development and Farm (Cause E040 of 2024) [2025] KEELRC 2424 (KLR)

Employment and Labour Relations Court
12 September 2025
3,186 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a farm manager's dismissal unfair because the employer skipped the mandatory show-cause letter and hearing, awarding her Kshs.432,704 despite proven misconduct.

What this practically means

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Executive summary

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The claimant, employed as Farm General Manager on 14th August 2023 on a five-year contract at a gross monthly salary of Kshs.84,000, was sent on unpaid leave by memorandum on 3rd March 2024 and summarily dismissed on 16th March 2024 for gross misconduct, with no show cause letter or disciplinary hearing. She sued seeking a declaration that the termination was unfair, unlawful and unprocedural, terminal dues of Kshs.6,416,250.84, remittance of NSSF and NHIF deductions, a certificate of service and costs. The respondent denied liability, alleging negligence in financial record-keeping, unexplained fuel expenditure and failure to reconcile accounts. The court framed two issues: whether the termination was unfair and unlawful, and whether the reliefs were merited. Applying section 45 of the Employment Act, the court found the respondent had proved a valid reason for termination — the claimant admitted spending Kshs.48,000 on fuel with only Kshs.3,000 supported by ETR receipts and making a wrong spreadsheet entry — but the admitted failure to follow the mandatory procedure in section 41 rendered the termination unfair and unlawful. The claimant was awarded two months' gross salary as compensation, one month's notice pay, March salary for 16 days, pro-rata leave, housing allowance and 7 months' pension, totalling Kshs.432,704.84, subject to statutory deductions. Claims for anticipated salary, public holidays worked, NSSF and NHIF, and 53 months' pension were declined for lack of evidence and legal basis. The claimant received costs plus interest from the date of judgment.

Key legal issues

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01

Procedural fairness of the termination

Holding

The termination was procedurally unfair because the claimant was neither issued a show cause letter nor accorded a disciplinary hearing, contrary to section 41 of the Employment Act.

Reasoning

The respondent admitted under oath that he never issued a show cause letter or accorded the claimant a disciplinary hearing. Section 41 of the Employment Act mandates that an employer explain the reasons for termination and hear the employee's representations before dismissal. The admission under oath rendered the termination procedurally unfair notwithstanding the validity of the reasons.

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02

Validity of the reason for termination

Holding

The respondent proved a valid reason for termination based on the claimant's negligence and improper performance of duty.

Reasoning

The claimant admitted spending Kshs.48,000 on fuel of which only Kshs.3,000 was supported by ETR receipts, and admitted making a wrong spreadsheet entry regarding Kshs.2,400 paid to workers. These admissions, contrary to her contractual duty to maintain accurate financial records, amounted to wilful neglect and careless performance under section 44(4)(c) of the Employment Act.

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Compensation and reliefs

Holding

The claimant was awarded two months' gross salary as compensation, one month's notice pay, March salary, pro-rata leave, housing allowance and 7 months' pension, totalling Kshs.432,704.84.

Reasoning

Compensation was limited to two months' gross salary because the claimant served less than a year and her misconduct contributed to the termination. Notice pay followed section 35(1)(c). March salary was payable because no law permits unilateral unpaid leave. Leave was computed pro-rata under section 28, and housing allowance at 15% of basic pay under section 31.

p. 6

Legal principles established

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  • For a termination to be fair, the employer must prove both a valid reason and adherence to fair procedure, including notifying the employee of the charges and affording an opportunity to respond.
  • There is no legal basis for an employer to unilaterally place an employee on unpaid leave.
  • Housing allowance is a statutory right where the employer neither provides housing nor pays an allowance.

Court orders

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  1. 1.Declaration that the termination of the claimant's employment was unfair and unlawful.
  2. 2.The respondent to pay the claimant: Notice Kshs.84,000.00; Compensation Kshs.168,000.00; Salary for March Kshs.43,354.84; Leave Kshs.22,050.00; Housing allowance Kshs.24,300.00; Pension Kshs.91,000.00; Total Kshs.432,704.84.
  3. 3.The award is subject to statutory deductions.
  4. 4.The claimant is awarded costs of the suit plus interest at court rates from the date of this judgment.
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment 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, "Munialo v Muindi t/a Kageni Resort Development and Farm (Cause E040 of 2024) [2025] KEELRC 2424 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2424/eng@2025-09-12

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