Pannju Agencies Company Ltd v Mwai (Civil Appeal (Application) E326 of 2025) [2026] KECA 1777 (KLR) (25 September 2026) (Ruling) Neutral citation: [2026] KECA 1777 (KLR) REPUBLIC OF KENYA IN THE COURT OF APPEAL AT NAIROBI CIVIL APPEAL (APPLICATION) E326 OF 2025 SG KAIRU, GV ODUNGA & MB KAIRARIA, JJA SEPTEMBER 25, 2026 BETWEEN PANNJU AGENCIES COMPANY LIMITED ........................................ APPLICANT AND PAUL MAINA MWAI .......................................................................... RESPONDENT (Being an application for stay of execution of the Judgment of the Employment and Labour Relations Court of Kenya at Nairobi (J. W. Keli, J.) dated 12th February 2025 in ELRC Cause No. E245 of 2023) RULING 1. The respondent, Paul Maina Mwai lodged a claim before the Magistrates Court at Milimani, Nairobi asserting that he was employed by the applicant as a driver in May 2009 and that his employment was unlawfully terminated on 10th January 2022. Denying the claim, the applicant maintained that the respondent was an independent contractor; and that the respondent was hired on a need basis to drive hardware material of the applicant to designated areas. 2. The Magistrates’ Court found that the termination of the respondent was procedurally unfair and unlawful and awarded him a total of Kshs. 416,980.35 comprised of: the equivalent of 3 months’ salary for unlawful termination; one months salary in lieu of notice; Kshs.202, 588.20 underpaid salary; unpaid leave arrears for three years of Kshs. 91,882.35. Both parties were dissatised. The applicant appealed before the ELRC. The respondent cross-appealed. 3. In a judgment delivered on 12th February 2025, the ELRC (J.W. Keli, J.) dismissed the applicant’s appeal and allowed the respondent’s cross appeal. It enhanced the award in favour of the respondent as follows: compensation for unlawful termination for the equivalent of 10 months’ salary, Kshs. 306,270.45; underpayment Kshs. 371,411.70; payment in lieu of untaken annual leave Kshs. 117,915.60. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1777/eng@2026-09-25 1
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4. Dissatised, the applicant led a notice of appeal dated 17th February 2025 lodged on 1st April 2025. It subsequently led the present application dated 29th January 2026 made under Rule 5(2)(b) of the Court of Appeal Rules seeking an order of stay of execution of the said judgment pending the hearing and determination of the appeal. The application is supported by the adavit of Zenedine Kimamo Njogu sworn on 29th January 2026 and was urged before us on 4th March 2026 by learned counsel Ms. Wairimu appearing with Mr. Kori for the applicant. Counsel relied on the applicant’s written submissions dated 3rd March 2026 with a brief oral highlight. Although notice of hearing had been served, there was no appearance for the respondent. 5. The applicant contends that the underlying appeal is arguable; that the learned Judge erred in determining that an employer- employee relationship existed between the parties despite the respondent having been an independent contractor. Further, that the Judge applied the doctrine of continuing injury to claims of underpayment dating back to 2016 beyond the time limited under Section 90 of the Employment Act and also enhanced the award given by the Magistrate’s Court without proper basis. 6. It was submitted further that the appeal will be rendered nugatory unless the order prayed for is granted because the respondent will proceed to execute the decree against the applicant. That if the appeal succeeds, the respondent is not in a position to pay back the amount involved. 7. Bearing in mind the legal principles applicable in applications of this nature (see for instance Stanley Kang’ethe Kinyanjui vs. Tony Ketter & 5 Others [2013] KECA 378 (KLR)), and mindful also that an arguable appeal is not one that must necessarily succeed, we are satised that the applicant has demonstrated that the appeal is not frivolous. The questions: whether the respondent was an independent contractor and whether an employer-employee relationship was established and whether the Judge erred in enhancing the awards given by the Magistrate’s Court are not in our view frivolous. The appeal is arguable. 8. As to whether, if the order sought is refused and the appeal subsequently succeeds, the appeal would be rendered nugatory, beyond the submission, there is no averment in the adavit in support of the application that the respondent lacks the means or the ability to refund which would then have required the respondent to demonstrate his nancial ability. Consequently, although we nd that the appeal is arguable, we are not satised that the appeal will be rendered nugatory if an interim order is denied. The underlying decree involves a liquidated monetary sum and there is no veried assertion that the respondent would be incapable of refunding the decretal sum if the appeal succeeds. Consequently, the application fails and is hereby dismissed with no orders as to costs as the respondent did not appear during the hearing of the application. 9. Orders accordingly. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. S. GATEMBU KAIRU, FCIArb, CArb. ......................................... JUDGE OF APPEAL G. V. ODUNGA ...................................... JUDGE OF APPEAL MURUNGI B. KAIRARIA https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1777/eng@2026-09-25 2
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....................................... JUDGE OF APPEAL I certify that this is a true copy of the original. Signed DEPUTY REGISTRAR. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1777/eng@2026-09-25 3
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