Sheila Kiplangat v Unilever Tea Kenya Limited

terminal benefits and executed a discharge in full and final settlement may subsequently maintain a claim arising from the termination. 2. The appellant, Sheila Kiplangat, was employed by the respondent, Unilever Tea Kenya Limited, in August 2012 as a Supply Chain Assistant. On 1st July 2018, she was promoted to the position of Field Assistant Manager. By a letter dated 26th July 2019, the respondent informed her that her position had been declared redundant. Her employment consequently came to an end on 31st August 2019. 3. Upon termination, the appellant was paid terminal dues amounting to Kshs. 2,343,833 gross and executed a Certificate of Discharge expressed to constitute full and final settlement of all claims arising from her employment with the respondent. 4. Notwithstanding that settlement, the appellant instituted proceedings before the Employment and Labour Relations Court (ELRC) challenging the termination. Upon hearing the parties, the learned Judge found that the respondent had demonstrated a genuine basis for the redundancy but had Page 2 of 16

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not Page 3 of 16

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fully complied with the procedure prescribed by section 40 of the Employment Act. 5. The learned Judge nevertheless dismissed the claim upon finding that the appellant had voluntarily executed the discharge with establishing knowledge fraud, of coercion, its import and without misrepresentation, undue influence or any other circumstance capable of vitiating her consent. 6. Aggrieved by that decision, the appellant lodged this appeal on five grounds which, condensed, fault the learned Judge for: holding that the discharge absolved the respondent notwithstanding its non-compliance with section 40 of the Employment Act; treating the discharge as binding notwithstanding the finding of procedural unfairness; failing to infer undue influence from the circumstances surrounding its execution; failing to appreciate the inequality of bargaining power between an employer and an employee whose employment has already been terminated; and failing to invoke section 119 of the Evidence Act to presume that the discharge had been executed under duress. Page 4 of 16

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7. When the appeal came before us for hearing on 29th June 2026, learned counsel Mr. Kirui appeared for the appellant while learned counsel Ms. Onyango appeared for the respondent. Both parties relied on their written submissions, which counsel briefly highlighted. 8. For the appellant, Mr. Kirui submitted that the appellant had lost her employment and required her terminal dues, but payment was conditional upon her signing the discharge. In those circumstances, counsel contended, the appellant could not realistically be regarded as having exercised an entirely free choice. 9. Counsel further argued that once the learned Judge found that section 40 of the Employment Act had not been complied with, it was erroneous to permit the respondent to rely upon the discharge to defeat the statutory consequences of its own non- compliance. Reliance was placed on Thomas De La Rue (K) Ltd v Omutelema [2013] KECA 492 (KLR). 10. The respondent opposed the appeal. Ms. Onyango submitted that duress and coercion had neither been pleaded nor Page 5 of 16

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established before the trial court. The admitted Page 6 of 16 appellant had

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executing the discharge and had not demonstrated any circumstance capable of invalidating it. 11. Counsel maintained that a discharge freely executed with knowledge of its consequences constitutes a binding settlement between the parties. Reliance was placed on Trinity Prime Investment Ltd v Lion of Kenya Insurance Company Ltd [2015] KECA 793 (KLR) and Coastal Bottlers Ltd v Mithika [2018] KECA 523 (KLR). Our Determination 12. We have considered the record of appeal, the grounds advanced by the appellant, the parties' submissions and the applicable law. Although the memorandum contains five grounds, they revolve around two related questions: a. whether the discharge executed by the appellant was legally capable of compromising her claim notwithstanding the respondent's non-compliance with section 40 of the Employment Act; and b. whether the discharge was vitiated, or ought to have been treated as vitiated, by duress or undue influence. 13. This being a first appeal, we are obliged to reconsider and Page 7 of 16

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re- evaluate the evidence and draw our own conclusions, bearing in mind that, unlike the trial court, we did not have the Page 8 of 16

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advantage of seeing and hearing the witnesses. That familiar jurisdiction was stated in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123 and has consistently been applied by this Court. 14. We begin with controversy. a matter about which there is little The learned Judge found that there existed a genuine operational basis for the redundancy but that the respondent did not fully comply with the statutory procedure prescribed by section 40 of the Employment Act. That finding has not been challenged by way of a cross-appeal and is therefore not open for reconsideration in this appeal. 15. Section 40 of the Employment Act prescribes mandatory safeguards governing termination on account of redundancy. Depending on the circumstances, they include the requisite notification, observance of statutory selection criteria, payment for accrued leave, notice or payment in lieu thereof, and severance pay. Those requirements are not mere technicalities. They constitute statutory protection Page 9 of 16

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against arbitrary loss of employment through redundancy. Page 10 of 16

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16. The jurisprudence of this Court has consistently emphasized the importance of compliance with section 40. See, for example, Thomas De La Rue (K) Ltd v Omutelema (supra), Kenya Airways Ltd v Aviation & Allied Workers Union Kenya & 3 Others [2014] KECA 404 (KLR), and Cargill Kenya Limited v Mwaka & 3 Others [2021] KECA 115 (KLR). 17. That, however, does not entirely dispose of this appeal. A distinction must be drawn between an employer's compliance with its statutory obligations in effecting a redundancy and the subsequent settlement of claims arising from the employment relationship. The former is governed by statute; the latter may, depending upon the circumstances, be governed by ordinary principles relating to compromise and settlement. 18. It would therefore be incorrect to formulate the applicable principle as though the mere execution of a discharge retrospectively validates an otherwise procedurally defective redundancy. It does not. Nor can an employer contract out of Page 11 of 16

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mandatory provisions of employment legislation simply by procuring an employee's signature upon a discharge. Page 12 of 16

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19. Equally, however, the law does not prohibit parties, after a dispute or cause of action has arisen, from knowingly and voluntarily settling claims capable of lawful compromise. The essential inquiry is therefore not merely whether a discharge exists, but whether, viewed in its context, it represents a genuine, informed and voluntary settlement. 20. That distinction was addressed by this Court in Coastal Bottlers Ltd v Mithika (supra). The Court accepted that a discharge voucher, without more, cannot absolve an employer from statutory obligations or prevent a court from examining the fairness of a termination. The Court nevertheless emphasized that each case ultimately turns on whether the discharge was freely and willingly executed by an employee possessing the relevant information and knowledge. 21. Consequently, a court confronted with such a discharge must examine its terms as well as the circumstances surrounding its execution. Relevant considerations include whether the terms were clear; whether the employee understood the nature and effect of the settlement; whether Page 13 of 16

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there was fraud, misrepresentation, coercion or undue influence; and whether Page 14 of 16

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the circumstances otherwise disclose an absence of genuine consent. 22. The discharge executed by the appellant stated, in material part, that in consideration of payment by the respondent of Kshs. 2,343,833 gross upon termination of her employment, the net payment would: “constitute full and final settlement of all claims and demands [whether previously intimated or not] by me against the company arising in any way out of or in respect of my employment at any time with the company... and I discharge the Company accordingly." 23. Those terms are broad and unambiguous. They do not merely acknowledge receipt of money. They expressly record an agreement that the payment constituted full and final settlement of claims arising from the employment relationship. 24. The question therefore becomes whether there was evidence upon which the learned Judge could properly conclude that the appellant's assent to those terms was genuine. 25. The appellant admitted executing the document. She did not dispute receiving the payment contemplated by it. More importantly, the learned Judge Page 15 of 16 found that she had

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established that her execution of the discharge resulted from fraud, mistake, misrepresentation, coercion or undue influence. 26. Our independent consideration of the record placed before us discloses no sufficient basis for interfering with that finding. 27. We accept, as a general proposition, that the employment relationship does not invariably involve equality of bargaining power. Loss of employment may place an employee in a financially vulnerable position. Courts must therefore scrutinise settlements reached in such circumstances with appropriate care. 28. But inequality of bargaining power cannot, without more, invalidate every settlement between an employer and a departing employee. Were that the law, voluntary settlements of employment disputes would become virtually impossible to enforce. 29. Financial need, anxiety following loss of employment, or a desire to receive terminal benefits promptly may explain why an employee enters into a settlement. They do not, Page 10 of 16

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standing alone, establish legal duress or undue influence. There must be evidence demonstrating that the employee's consent was Page 10 of 16

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improperly procured or that the circumstances were such that the apparent agreement cannot fairly be regarded as the product of a voluntary decision. 30. That approach is consistent with Trinity Prime Investment Ltd v Lion of Kenya Insurance Company Ltd (supra), where this Court treated a discharge freely executed, absent fraud, misrepresentation or other vitiating circumstances, as an effective compromise. The same principle was subsequently applied in the employment context in Coastal Bottlers Ltd v Mithika (supra). 31. We therefore reject the appellant's contention that the finding of procedural automatically non-compliance established undue with influence. section 40 The two questions are legally distinct. Failure to comply with the statutory redundancy procedure may render the termination procedurally unfair; it does not, without additional evidence, establish that a subsequent settlement was procured by coercion or undue influence. 32. The appellant's reliance upon section 119 of the Evidence Page 11 of 16

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Act does not alter that conclusion. That provision permits a court Page 11 of 16

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to presume the existence of facts which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. It does not compel a court to presume duress merely because an employee has lost employment and thereafter executed a settlement. 33. Duress and undue influence are serious allegations with legal consequences. Their existence must be demonstrated from pleaded and proved facts. Section 119 cannot be employed to dispense with the evidential foundation necessary for such a finding. 34. There is a further difficulty with the appellant's case. The respondent contends, and the record supports the contention, that the case now advanced regarding a presumption of duress was not squarely placed before the trial court. 35. As a general rule, an appellate court determines issues that were raised and adjudicated upon by the court below. The reason is elementary: an appeal is ordinarily a review of the Page 12 of 16

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correctness of a decision made upon issues placed before the Page 13 of 16

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trial court; it is not an opportunity to reconstruct the parties' cases after judgment. 36. This Court has nevertheless recognised a limited discretion to entertain a new point on appeal where the interests of justice permit, particularly where it is a pure point of law, does not require additional evidence, and causes no prejudice to the opposing party. Conversely, where determination of the new point depends upon disputed facts that were never investigated at trial, an appellate court will ordinarily decline to entertain it. 37. The allegation that the appellant signed the discharge under duress or undue influence is inherently fact-sensitive. It would require consideration of, among other matters, what was said to her, by whom, when the document was presented, whether payment entitlements was expressly of undisputed made statutory conditional upon execution, whether she objected, and the surrounding circumstances in which her consent was obtained. 38. Those matters cannot safely be presumed on appeal where they were neither adequately pleaded nor subjected to Page 14 of 16

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evidential testing before the trial court. Page 15 of 16

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39. We accordingly find no basis for faulting the learned Judge for declining to invalidate the discharge. 40. We nevertheless consider it necessary to emphasise the limited nature of our conclusion. We do not hold that an employer may avoid compliance with section 40 of the Employment Act by routinely requiring employees declared redundant to execute discharge vouchers. Neither do we hold that every discharge executed by an employee is necessarily enforceable. 41. What we hold is that where, after termination, an employee knowingly and voluntarily enters into a clear settlement of claims arising from the employment relationship, receives the agreed consideration, and fails to establish fraud, misrepresentation, coercion, undue influence or another recognised vitiating factor, a court will ordinarily give effect to that settlement. 42. Conversely, where the evidence demonstrates that payment of undisputed statutory entitlements was improperly withheld to procure the employee's signature; that the employee was misled as to the nature or effect of the Page 16 of 16

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document; or that the agreement was otherwise procured through circumstances vitiating Page 17 of 16

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genuine consent, the existence of a signed discharge will not, of itself, defeat a legitimate statutory claim. 43. This approach gives proper effect both to the protective purpose of employment legislation and to the equally important principle that lawful compromises freely entered into should ordinarily be respected. 44. Applying those principles to the present appeal, the respondent's procedural default under section 40 did not retrospectively disappear upon execution of the discharge. The learned Judge was entitled to examine that default, and did so. But having also found that the appellant subsequently and voluntarily compromised her claims, and there being no sufficient evidential basis for invalidating that settlement, the learned Judge cannot be faulted for giving effect to it. 45. It follows that the appellant has failed to demonstrate any error of law or fact warranting our interference with the judgment of the ELRC. Disposition 46. Accordingly, the appeal is devoid of merit and is Page 18 of 16

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hereby dismissed. Page 19 of 16

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47. As regards costs, this dispute arose from an employment relationship and the trial court itself found that the respondent had failed to comply fully with the statutory redundancy procedure. In those circumstances, although the appeal has failed, we consider it just that each party bears its own costs of the appeal 48. These shall be the orders of the Court. Dated and delivered at Nakuru this 25th day of September, 2026. J. MATIVO .................................. JUDGE OF APPEAL MURUNGI B. KAIRARIA .................................. JUDGE OF APPEAL AHMED ISSACK ............................. .... JUDGE OF APPEAL I certify that this is a True copy of the original Signed Page 110 of 16

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DEPUTY REGISTRAR Page 111 of 16

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