Mbuthia v Lexis International Limited
The bottom line
#A Kenyan court ruled the dismissal unfair because the employer skipped a fair hearing, but awarded only modest compensation because the employee's own conduct contributed.
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 Respondent unfairly terminated the Claimant's contract of service.
- 2.Whether the Claimant is entitled to the reliefs which he seeks in the Memorandum of Claim.
- 3.Whether the Respondent's counter-claim is merited.
Key legal issues
#Whether termination was substantively justified
Yes - the Respondent had reasonable grounds to genuinely believe the Claimant misappropriated the materials
The Claimant received the 15th May 2020 letter accusing him of losing 171 trappers and tendered it in evidence. He never wrote to contest the accusations, which the court read as tacit acquiescence. Section 43(2) requires only a genuine belief on reasonable grounds, not infallible proof, and the standard is a balance of probability.
Whether termination was procedurally fair
No - the Respondent breached section 41 of the Employment Act
Apart from the warning letter, there was no notice to show cause, no disciplinary hearing, and no opportunity to be heard. The alleged summons to a meeting was unsupported by cogent evidence and the Claimant was not told it would serve as a disciplinary session under section 41.
Quantum of compensation for unfair termination
Minimal compensation of two months' salary (Ksh. 60,000.00) awarded
Under section 49 of the Employment Act, the court considered the length of service (roughly seven to nine years) and the Claimant's contributory conduct in failing to account for the materials. Because his conduct greatly contributed to the termination, only minimal compensation was warranted to vindicate his right to due process.
Accrued annual leave pay
Awarded at Ksh. 126,000.00 for 126 untaken leave days over approximately six years
The Respondent did not controvert the leave claim with evidence. Since it failed to reduce the contract into writing, section 10(7) and section 74 of the Employment Act, read with section 112 of the Evidence Act, placed the burden of proving leave utilisation on the employer. It did not discharge that burden; 21 days per year at a daily rate of Ksh. 1,000 was computed.
Respondent's counter-claim for Ksh. 256,500.00
Dismissed for failure to specifically plead and prove special damages
The Respondent claimed the value of lost construction materials but presented no evidence proving the value. As a special damage claim, the amount had to be both specifically pleaded and proved; absent specific proof of the figures, the counter-claim failed.
Legal principles established
#- An employer need not have infallible evidence of an infraction; reasonable grounds to genuinely believe the employee committed it suffice under section 43(2) of the Employment Act.
- Valid reasons for termination must be accompanied by fair procedure under section 41 of the Employment Act.
- Where the employer fails to reduce a contract into writing, it bears the burden under section 10(7) of the Employment Act of proving contested terms such as leave utilisation.
- Special damages must be specifically pleaded and proved.
Court orders
#- 1.Declaration that the decision to terminate the Claimant's contract was unfair and unlawful
- 2.Award of Ksh. 60,000.00 as compensation for unfair termination
- 3.Decline of claim for pay in lieu of notice
- 4.Decline of claims for service pay and gratuity
- 5.Decline of claim for underpayment of salary
- 6.Award of Ksh. 126,000.00 as pay in lieu of accrued leave days
- 7.Decline of prayers for reinstatement and general damages for breach of contract
- 8.Interest on amounts awarded at court rates from the date of judgment
- 9.Claimant awarded costs of the primary suit
- 10.Decline of the Respondent's counter-claim
- 11.Each party to bear own costs in respect of the counter-claim
- 12.Award subject to statutory deductions applicable at the time of termination
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court Act, Article 162(2) of the Constitution (implied by the court's employment jurisdiction)
Relief refused
#Reinstatement
Unavailable under section 12(3)(vii) of the ELRC Act more than three years after termination
Pay in lieu of notice (Ksh. 60,000.00)
Conduct amounted to gross misconduct under section 44(1) of the Employment Act, disentitling him to notice
Service pay (Ksh. 120,000.00)
Claimant was an NSSF member; excluded by section 35(6) of the Employment Act
Pro rata gratuity (Ksh. 180,000.00)
No evidence of a contractual commitment to pay gratuity
Underpayment of salary (Ksh. 14,976.00)
No evidence presented; claim failed for want of proof
General damages for wrongful dismissal
General damages are not available for breach of contract
Respondent's counter-claim (Ksh. 256,500.00)
Special damages not specifically pleaded or proved
Costs
Claimant awarded costs of the primary suit; each party to bear own costs in respect of the counter-claim.
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 law does not obligate an employer to have infallible evidence pointing to the commission of an infraction by an employee before he (the employer) can terminate the employee's services on account of the infraction.
The totality of the evidence on record does not suggest that the Respondent accorded the Claimant procedural fairness whilst processing his release from service. His contract of service was unprocedurally terminated.
I award the Claimant Ksh. 60,000.00 as compensation for unfair termination of his contract of service.
I award the Claimant Ksh. 126,000.00 as pay in lieu of accrued leave days.
I decline to grant the Respondent's counter claim.
Each party to bear own costs in respect of the counter claim.
Since the contract of service between the parties was terminated in May 2020 more than three years from the date of this decision, the remedy of reinstatement is no longer available to the Claimant.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbuthia v Lexis International Limited", Case Analysis (2026). Employment and Labour Relations Cause E505 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.