Madegwa v Mudete Tea Factory Co. Ltd (Cause E028 of 2024) [2025] KEELRC 2550 (KLR)
The bottom line
#A Kakamega court ruled Mudete Tea Factory unfairly sacked a worker because the company couldn't prove its misconduct allegations, awarding him over Kshs542,000.
What this practically means
#Executive summary
#Key legal issues
#Substantive fairness - whether the reason for termination was proved
The respondent failed to substantiate the alleged negligence; the CCTV footage, cotton waste, investigation report and witnesses relied on in the show-cause letter were never availed.
The show-cause letter alluded to CCTV footage, witness statements and technicians' reports, but none was produced at the disciplinary hearing or in court. RW1 admitted no mechanical report existed and no witnesses were called at the hearing. Under Section 43(1) of the Employment Act the employer must prove the reason for termination; the burden, per Sections 107 and 108 of the Evidence Act, was not discharged, so the termination lacked merit.
Procedural fairness under Section 41 of the Employment Act
The disciplinary process was procedurally unfair: the claimant was not supplied with the evidence against him, no witnesses testified, and he was not informed of rights to call witnesses, have a union representative, or appeal.
The minutes showed no witness was called and the investigation report, CCTV recording and cotton wool were not availed to the claimant despite his request. There was no evidence he was informed of his right to call witnesses, attend with a union representative, or appeal to the Board of Directors. These omissions breached the procedural fairness requirements of Sections 41 and 47(5) of the Employment Act.
Compensation under Section 49 of the Employment Act
Ten months' gross salary (Kshs452,120/=) awarded as fair compensation after considering Section 49(4) factors, including length of service since 2002/2003 and lack of re-engagement.
The court considered the Section 49(4) factors: the claimant served on permanent basis from about 2014 (7 years) but had been with the respondent since 2002/2003 as a casual or contract employee; the parties did not intend re-engagement; and the claimant did not locate another job. Doing the best it could, the court settled on ten months' gross pay rather than the maximum twelve months sought.
Notice pay
The contract provided two months' salary in lieu of notice for employees with over three years' service, so Kshs90,424/= awarded instead of one month sought.
Although the claimant pleaded one month's salary in lieu of notice, the letter of appointment dated 30th June 2014 provided for payment of two months' salary in lieu of notice for employees who had served more than three years at termination. The court therefore awarded Kshs90,424/=, exceeding the sum claimed on the strength of the contractual term.
Application of terminal dues to Sacco loan
The respondent misapplied Kshs571,972.74 in terminal dues by applying them to the claimant's Chai Sacco loan without instructions or lawful cause; the court disregarded that payment.
The respondent claimed it applied Kshs571,972.74 in terminal dues to the claimant's Sacco loan, but produced no evidence of the claimant's instruction or a contractual right of set-off. The court held the money was never paid to the claimant nor applied on his instructions, declined to take it into account, and left the respondent to recover from the Sacco, a distinct legal entity.
Legal principles established
#- For a dismissal or termination to be fair an employer must accord the employee both substantive and procedural fairness
- The employer bears the burden of proving the reason for termination, and failure to avail the evidence relied on (CCTV footage, investigation report, witnesses) means the reason is unproved
- Terminal dues cannot be diverted to settle an employee's loan without the employee's instructions or a lawful contractual basis
Court orders
#- 1.A declaration that the dismissal of the claimant was unfair and unlawful
- 2.Award of ten months' gross salary (Kshs452,120/=) as compensation for unfair termination
- 3.Award of two months' gross salary in lieu of notice (Kshs90,424/=), total award Kshs542,544/= subject to statutory deductions
- 4.The respondent to issue and deliver a certificate of service to the claimant within 30 days of the judgment
- 5.Costs of the cause to the claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (Sections 41, 43, 45, 47(5), 49, 51 cited)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Madegwa v Mudete Tea Factory Co. Ltd (Cause E028 of 2024) [2025] KEELRC 2550 (KLR)", Case Analysis (2025). Cause No E028 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2550/eng@2025-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.