Classic Kitchen Appliances Ltd v Mula

4. THAT the Learned Trial Magistrate erred in law and in fact by finding that the Respondent was entitled to Eight (8) month's salary amounting to Kenya Shillings One Hundred and Sixty Thousand Only (Kshs. 160,000/=) as compensation for unlawful termination. 5. THAT the Learned Trial Magistrate erred in law and in fact by finding that the Respondent was entitled to One (1) month's salary in lieu of notice amounting to Kenya Shillings Ten Thousand Only (Kshs.110,000/= 6. THAT the Learned Trial Magistrate erred in law and in fact by finding that the Respondent was entitled to unpaid half salary for the month of October, 2022 amounting to Kenya Shillings Ten Thousand Only (Kshs. 10,000/=). 7. THAT the Learned Trial Magistrate erred in law and in fact by finding that the Respondent was entitled to payment for the period the Respondent was on maternity leave amounting to Kenya Shillings Sixty Thousand Only (Kshs.60,000/=). 8. THAT the Learned Trial Magistrate erred in law and in fact by finding that the Respondent was entitled to a certificate of service together with the cost of the suit and interest. 9. THAT the Learned Trial Magistrate erred in law in failing to appreciate the Appellant's submissions. The parties distilled the issues for determination to the following: 1. Whether there existed an employment relationship between the Appellant and the Respondent. 2. Whether the Respondent is entitled to the reliefs awarded by the subordinate court. ELRC-NAIROBI APPEAL E163 OF 2025 Page 2 of 11

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3. Who bears the costs of this appeal. The Appellant contends that the Respondent was never an employee of the Appellant Company at any given time. The Appellant’s sole witness, one, Ms. Zhuleikha Osman Maalim, testified that the Respondent was a total stranger to her and to the Appellant Company at large. On the question of the written contract, the Appellant argued that while the Employment Act, 2007 recognises both oral and written contracts under Section 8, there must still exist sufficient evidence to prove the existence of an employment relationship. The Appellant pointed to the identification card produced by the Respondent as lacking the Appellant’s official stamp in accordance with its custom, casting doubt on its authenticity. On salary payment, the Appellant challenged the M-Pesa statements relied upon by the Respondent, submitting that during cross-examination, the Respondent could not identify which phone number on the M-Pesa statements belonged to the Appellant’s directors and that the numbers were illegible. The Appellant further submitted that none of its directors, managers or officials go by the name ‘Mohamed’, which the Respondent appeared to associate with the M-Pesa transactions. The Appellant further challenged the evidence of Peter Gitau alias Peter Mwangi Gitau, noting inconsistencies in the signatures appearing on the Appellant’s CR12 and on Mr. Gitau’s witness statement. The Appellant’s witness disputed that Mr. Gitau was a director or shareholder in the Appellant company and suggested that his name was fraudulently inserted ELRC-NAIROBI APPEAL E163 OF 2025 Page 3 of 11

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in the CR12. On cross-examination, Mr. Gitau could not produce any evidence that he had reported the alleged fraud to the police. The Appellant submitted that the Respondent failed to adduce compelling evidence proving that she was employed by the Appellant, and that the trial court misdirected itself and misinterpreted the law by finding the suit in the Respondent’s favour. The Appellant prayed that the appeal be allowed with costs and the judgment of the lower court be set aside. The Respondent submitted that the evidence adduced at trial sufficiently established the existence of an employment relationship between the parties. The Respondent relied on the evidence of Peter Gitau, a former director of the Appellant who testified that the Respondent was employed and that her salary was paid partly in cash and partly via M-Pesa from the director’s personal account. The Respondent also relied on the evidence of a colleague, Lazarus Musembi, who confirmed that she worked at the Appellant’s premises. The Respondent submitted that an employment contract need not be in writing to be valid, relying on Sections 8 and 9 of the Employment Act, 2007. The duty to reduce an oral contract to writing rests on the employer, and the Appellant’s failure to do so could not be used to deny the existence of the employment relationship. The Respondent relied on the authority of Robai Musinzi v Mohammed Safdar Khan [2012] eKLR in support of this proposition. On the question of termination, the Respondent submitted that she was verbally informed upon her return from maternity leave on 6th February, 2023 that she had been replaced and her services terminated. No written notice, reasons for termination, or fair hearing were ELRC-NAIROBI APPEAL E163 OF 2025 Page 4 of 11

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accorded to her. The Respondent averred that directors of the Appellant had on several occasions during her employment instructed her not to get pregnant and that the termination was linked to her pregnancy status. The Respondent relied on Section 5(2) and (3) of the Employment Act, 2007 together with Section 29(1) of the Employment Act, ILO Maternity Protection Convention No. 183 (2000), CEDAW, and Article 27 of the Constitution of Kenya, 2010. The Respondent submitted that the Appellant failed to discharge the statutory burden of proving the reasons for termination under Sections 43, 45 and 47(5) of the Employment Act, 2007 and that the reliefs awarded by the trial court were proper and warranted in the circumstances. This being a first appellate court, the Court has a duty to examine matters of both law and fact and to subject the whole of the evidence to fresh and exhaustive scrutiny before drawing its own conclusions, while bearing in mind that it did not have the advantage of seeing and hearing the witnesses firsthand. The authority of Peters v Sunday Post Limited [1958] EA 424 and Selle and Another v Associated Motor Boat Co. Ltd [1968] EA 123. See also Peter M. Kariuki v Attorney General [2014] eKLR puts this in context. I now turn to address the issues as framed. On the 1st issue as to whether there existed an employment relationship between the Appellant and the Respondent The law in Kenya recognises both oral and written contracts of employment. Section 8 of the Employment Act, 2007 provides that a contract of service may ELRC-NAIROBI APPEAL E163 OF 2025 Page 5 of 11

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be express or implied, oral or in writing, or partly oral and partly in writing. The statutory duty to reduce an oral contract into writing within two months of commencement of employment is squarely placed on the employer by Section 9(1) of the Employment Act, 2007. An employer who fails to discharge that duty cannot then rely on its own breach to deny the existence of the employment relationship. From the totality of the evidence placed before the trial court, I find that the Respondent has proved that she was an employee of the Appellant. She produced a job card bearing the name of the Appellant Company. She also produced M-Pesa statements consistent with periodic salary payments. She called two witnesses who testified that she was an employee, one of whom was a former director of the company who confirmed the employment and the mode of salary payment. The Appellant called one witness who denied that the Respondent was ever employed but was unable to produce a comparator identification card or stamp to challenge the one produced by the Respondent. The cumulative weight of the testimonial evidence, financial records in the form of M-Pesa statements, and the official job card/identification documents establishes on a balance of probabilities that an employment contract, whether oral or implied by conduct, existed and that the Respondent performed services for the Appellant under agreed terms and conditions. I therefore find that the trial court was correct in its determination on this issue, and I uphold that finding. On the 2nd issue as to whether the Respondent’s termination was unlawful and whether the reliefs awarded were proper, the Appellant did not prove the reasons for the termination or demonstrate that any procedure was followed, such as a show-cause letter, invitation to ELRC-NAIROBI APPEAL E163 OF 2025 Page 6 of 11

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disciplinary proceedings, or any hearing before the Respondent was informed on 6th February 2023 that she had been replaced. I therefore find that the termination of the Respondent’s employment was both substantively and procedurally unfair, contrary to Sections 43, 45, and 47 of the Employment Act, 2007. The last issue for determination is who bears the costs of this appeal. Compensation for unfair and wrongful termination of employment: The trial court awarded eight (8) months’ compensation at Kshs. 20,000.00 per month, amounting to Kshs. 160,000.00 Section 49(1)(c) of the Employment Act, 2007 caps this head at twelve months. In this case the Respondent was denied both substantive and procedural fairness and there is no evidence that she secured alternative employment. An award of eight months is within the permissible range and is not manifestly excessive. This award is upheld at Kshs. 160,000.00. On one month’s salary in lieu of notice, the Respondent was not given notice and is therefore entitled to one month’s pay in lieu of notice at Kshs. 20,000.00 under Section 44(2) read with Section 36 of the Employment Act. This award stands. As to unpaid half salary for October 2022, the Respondent stated that she was only paid half salary for the month of October, 2022 when she proceeded on maternity leave. The Appellant did not produce payroll records to show that the Respondent was fully paid. The obligation to maintain employment and payment records is the employer’s under Section 74 of the Employment Act, 2007. The Appellant’s failure to produce such records operates against it. This award of Kshs. 10,000.00 is upheld. ELRC-NAIROBI APPEAL E163 OF 2025 Page 7 of 11

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Payment for the period on maternity leave, the Respondent was on maternity leave from 30th October, 2022 to 6th February 2023, a period of 99 days. Section 29(1) of the Employment Act, 2007 entitles a female employee to three months’ maternity leave on full pay. The statutory entitlement is three months (approximately 91 days). The award of Kshs. 60,000.00 corresponds to three full months at Kshs. 20,000.00 per month, which is the correct statutory period. The Appellant produced no evidence that this period was paid. The award of Kshs. 60,000/= is upheld. Unpaid leave pay: The Respondent was away for a period of 26 days which was encompassed within the maternity leave period already awarded above. This prayer accordingly fails. Unpaid leave allowance, overtime, and holiday work pay: The Respondent did not demonstrate that she worked overtime or during public holidays. The nature of her role as a receptionist does not inherently require overtime or holiday attendance and no specific evidence of such work was produced. These prayers fail. Service pay: Service pay under Section 35(5) of the Employment Act, 2007 is available to employees whose employer has not been contributing to a registered pension or provident fund on their behalf. The Respondent’s claim for service pay appears to have been conflated with the claim for unremitted NHIF and NSSF contributions, which are governed by separate statutory schemes. Regarding the NHIF and NSSF unremitted contributions, there are no civil remedies under the Employment Act, 2007 for their direct recovery in an employment claim; those are matters for the relevant statutory bodies. ELRC-NAIROBI APPEAL E163 OF 2025 Page 8 of 11

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On service pay properly so called, the record does not establish the precise start date of the Respondent’s employment and the evidence before the court points to a relatively short period of service not clearly exceeding one year on the dates disclosed in the claim. In the absence of a clearly proved service period and evidence on NSSF/pension contribution history, this claim is not established on a balance of probabilities and fails. On damages for breach of constitutional rights arising from pregnancy-linked termination, the Respondent averred that directors of the Appellant had on several occasions instructed her not to get pregnant and that her termination upon return from maternity leave was linked to her pregnancy. Section 5(2) of the Employment Act, 2007 prohibits discrimination in the terms of employment on grounds that include pregnancy or related conditions. The standard is not that pregnancy be the sole reason for the termination it suffices that pregnancy was a reason. However, a bare averment is not sufficient. No corroborating evidence was produced: there were no witnesses to the alleged instructions not to get pregnant, no documentary evidence, and no evidence of disparate treatment of other employees. On the evidence as it stands, the claim of pregnancy-linked discrimination is not proved on a balance of probabilities. This prayer fails. On the call for a fine under Section 9(3) of the Employment Act: The Respondent prayed for a fine of Kshs. 100,000/= against the Appellant for failure to comply with Section 9(1) of the Employment Act, which requires an employer to reduce an oral contract to writing. The short answer is that Section 9(3) imposes a regulatory or criminal sanction enforceable by the Director of Employment or through criminal proceedings. It does not create a civil cause of action by which an employee may sue for a fine as a head of damages in an employment claim before this court. This prayer accordingly fails on that basis. ELRC-NAIROBI APPEAL E163 OF 2025 Page 9 of 11

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On NHIF and NSSF contributions, the recovery of unremitted statutory contributions under NHIF and NSSF is governed by those respective statutes and is not recoverable as a civil remedy in an employment claim. This prayer fails. On the issue of a certificate of service: The Respondent is entitled to a certificate of service. The Appellant shall issue the same within seven (7) days of the date of this judgment. On costs of the suit and of this appeal: The general rule is that costs follow the event. The Respondent established her case before the trial court and is therefore entitled to costs of the lower court proceedings. The appeal lacks merit and costs of this appeal are awarded to the Respondent. I am therefore inclined to dismiss the appeal and order as follows; 1. The Judgment of the trial court in Milimani MCELRC No. E531 of 2024 is upheld and affirmed. 2. The Appellant shall meet and pay the following as compensation to the Respondent Eight (8) months compensation for unlawful termination of employment...Kshs. 160,000.00 One (1) month’s salary in lieu of notice………………………………..….Kshs. 20,000.00 Unpaid half salary for October, 2022………………………………….…..Kshs. 10,000.00 Three (3) months salary in lieu of maternity leave……………………..…Kshs. 60,000.00 Total of award…………………………………………………………Kshs. 250,000.00 ELRC-NAIROBI APPEAL E163 OF 2025 Page 10 of 11

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3. The Appellant shall issue the Respondent with a Certificate of Service within thirty (30) days of the date of this judgment of court. 4. The costs of this appeal shall be borne by the Appellant. 5. Interest on the decretal sum at court rates from the date of the judgment of the trial court until payment in full. Delivered, dated and signed this 15th day of July 2026. D. K. Njagi Marete JUDGE Appearances: 1. Mr. Abdi instructed by Abdiaziz & Company Advocates for the Appellant. 2. Mr. Mulinge instructed by Mulinge & Ochieng Company Advocates for the Respondent. ELRC-NAIROBI APPEAL E163 OF 2025 Page 11 of 11

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