Royal Garments Industries

conducted a show cause process and a disciplinary hearing on 1st August, 2022 after which the Respondent was issued with a summary dismissal letter. The Appellant contends that the statutory duty under Section 41 of the Employment Act, 2007 is discharged once an employee is notified of the allegations against him in writing, given an opportunity to respond and heard at a disciplinary hearing. It submits that all three elements were satisfied in the present case and that the trial court erred in finding a case of procedural unfairness. On quantum, the Appellant submits that the discretion under Section 49(1)(c) of the Employment Act, 2007 must be exercised with reference to the degree of the employer’s culpability, the length of service and the extent of the procedural breach, and that four months’ compensation is disproportionate in a case where substantive grounds for termination existed. The Respondent’s case and submission is that the trial court correctly applied the law on procedural fairness and that the Respondent was verbally informed that his services were no longer required. This was without being issued with any prior notice of contemplated termination, without being given an opportunity to have a representative present and without a hearing at which he could canvass his response. The Respondent further submits that an award of four months’ compensation was, if anything, conservative given the circumstances. After a considered look and scrutiny of the Memorandum of Appeal, the Record of Appeal, the proceedings and evidence on record and the submissions of the parties the issues for determination therefore become; ELRC-NAIROBI APPEAL E029 OF 2025 Page 2 of 5

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1. Whether the trial court erred in finding that the Respondent’s termination was procedurally unfair. 2. Whether the trial court erred in awarding the Respondent four months’ salary as compensation. 3. Who bears the costs of this appeal. The 1st issue for determination is whether the trial court erred in finding that the Respondent’s termination was procedurally unfair. This being a first appeal, this court is enjoined to re-evaluate the evidence on record, both as to fact and as to law, and to draw its own conclusions while remaining alive to the fact that it did not have the advantage of seeing and hearing the witnesses testify. Section 41 of the Employment Act, 2007 requires an employer, before terminating an employee on grounds of poor performance or misconduct, to explain to the employee, in a language the employee understands, the reason for the intended termination, and to hear and consider any representations the employee may wish to make, including through a representative. It is not disputed that the Appellant issued show cause letters in May and June, 2022 and conducted what it describes as a disciplinary hearing on 1st August, 2022. The trial court found, and there is no cross-appeal on the point, that the Appellant had substantive grounds for termination. The question is whether the process by which that substantively justified decision was implemented met the requirements of Section 41. The Respondent’s evidence, which the trial court accepted, is that he was verbally told his services were no longer required. He was not afforded the right to have a representative of his ELRC-NAIROBI APPEAL E029 OF 2025 Page 3 of 5

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choice present at the hearing, as required under Section 41(1)(b) of the Employment Act, 2007. That evidence was not effectively contradicted. Taking the Appellant’s account at its highest, what it describes is a show cause process and a hearing without a representative for the Respondent. The authorities relied upon by the Appellant do not assist it on this point. In Naima Khamis v Oxford University Press (EA) Limited [2012] eKLR, the Court of Appeal affirmed that procedural compliance is not mere formality but a substantive right, and that a hearing conducted without affording the employee the right to a representative is procedurally defective notwithstanding the existence of substantive grounds. There is, in addition, no evidence on record that the Respondent was afforded the right under Section 41(1)(b) to have a representative present. The 1st issue is answered against the Appellant. This court finds no basis to disturb the trial court’s finding that the Respondent’s termination was procedurally unfair. The 2nd issue for determination is whether the trial court erred in awarding the Respondent four months’ salary as compensation. Section 49(1)(c) of the Employment Act, 2007 empowers a court to award compensation not exceeding twelve months’ gross salary. The Appellant’s submission, founded on the Polkey principle from the authority of Polkey v A.E. Dayton Services Ltd [1987] UKHL 8, is that where substantive grounds for termination exist, compensation should be reduced to reflect the likelihood that a fair procedure would have produced the same outcome. This court is not persuaded by this reasoning and submission. The Polkey principle addresses the quantum of compensation in cases where the procedural defect is the primary wrong; it does not operate to eliminate compensation in every case where substantive grounds co-exist with procedural default. Having regard to the Respondent’s length of service of approximately four years, the absence of any order for ELRC-NAIROBI APPEAL E029 OF 2025 Page 4 of 5

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reinstatement, and the procedural defect established, an award of four months’ compensation is within the range of the court’s discretion and is neither manifestly excessive nor erroneous in principle. The 2nd issue is answered against the Appellant. On the issue of costs, it is an accepted principle of civil law that cause follow the event. The Appellant having failed to establish their case on both grounds, costs would follow the Respondent. I am therefore inclined to dismiss the appeal with costs to the Respondent. Delivered, dated and signed this 29th day of July 2026. D. K. Njagi Marete JUDGE Appearances: 1. Mr. Macharia instructed by Naikuni Ngaah & Miencha Company Advocates for the Appellant. 2. Mr. Wanyangu instructed by Namada & Company Advocates for the Respondent. ELRC-NAIROBI APPEAL E029 OF 2025 Page 5 of 5

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