Kimanzi Kilonzi v SAAB Enterprises Limited

Enterprises Limited, MCELRC E017 of 2022 Caleb Kamuti vs SAAB Enterprises Limited, MCELRC E018 of 2022 Stephen Muthami vs SAAB Enterprises Limited, MCELRC E019 of 2022 Mariam Bakari Jabu vs SAAB Enterprises Limited, MCELRC E020 of 2022 Patrick Munyao vs SAAB Enterprises Limited, MCELRC E021 of 2022 Mbarak Nagib vs SAAB Enterprises Limited, MCELRC E022 of 2022 Peter Mutinda vs SAAB Enterprises Limited, MCELRC E023 of 2022 Julius Mwanza vs SAAB Enterprises Limited, MCELRC E024 of 2022 Mathew Mutweleli vs SAAB Enterprises Limited, MCELRC E025 of 2022 Gabriel Muthengi vs SAAB Enterprises Limited, MCELRC E026 of 2022 Julius Kitonga vs SAAB Enterprises Limited, MCELRC E027 of 2022 Abdulhamyd Kabela Masudi vs SAAB Enterprises Limited, MCELRC E028 of 2022 Dennis Kilonzo vs SAAB Enterprises Limited, MCELRC E029 of 2022 Peninah Mukai Kimanzi vs SAAB Enterprises Limited, MCELRC E030 of 2022 Johnson Siloba vs SAAB Enterprises Limited, MCELRC E031 of 2022 Abubakar Mohamed Salim vs SAAB Enterprises Limited, MCELRC E032 of 2022 Omar Mohamed vs SAAB Enterprises Limited, MCELRC E033 of 2022 Salim Mohamed Salim vs SAAB Enterprises Limited, MCELRC E034 of 2022 Stephen Mutune vs SAAB Enterprises Limited, MCELRC E035 of 2022 Athman Mohamed vs SAAB Enterprises Limited, and MCELRC E036 Of 2022 Benedict Munyao vs SAAB Enterprises Limited)) CORAM Before Lady Justice Jemimah Keli C/A Otieno JUDGMENT 1. The Appellant herein, being dissatisfied with the entire consolidated Judgement and Decree of Hon. M.K. Mwangi (CM) delivered on 16th J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 2 | 18

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December 2025 in Mwingi MCELRC E001-E036, all of 2022, between the parties, filed a Memorandum of Appeal dated the 15th January 2026 seeking the following orders: a. The Appeal be allowed and part of the Judgment of the Trial Magistrate be set aside and the same be substituted with an order awarding the Appellants 12 months’ salary as compensation for unfair termination. b. The costs of this Appeal be awarded to the Appellants. c. The Court to issue such other Orders as the Honourable Court may deem fit to meet the ends of Justice. GROUNDS OF THE APPEAL 2. The Honourable Magistrate erred in fact and law by failing to award the Claimants compensation for unfair termination despite finding that the Claimants were unfairly terminated by the Respondent. 3. The Honourable Magistrate erred in fact and law by failing to give reasons for his failure to award the Claimants compensation for unfair termination. BACKGROUND TO THE APPEAL 4. The Claimants, including the Appellant herein filed separate claims against the Respondent vide memoranda of claim dated 26 th October 2022 seeking the following orders: - J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 3 | 18

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a) A declaration that the Claimants termination from employment amounted to unlawful and unfair termination. b) Compensation @ 12 months’ salary pursuant to Section 49 of the Employment Act c) I month’s salary in lieu of notice d) Underpayment e) Interest at Court rates on (b) and (c) above from the date of the Claimant’s termination (23rd August 2021) till payment in full f) Costs of the suit g) Any other relief that this Honourable Court may deem fit and just to grant. 5. Alongside the claim, the Claimants including the Appellant filed their witness statements dated 26th October 2022, lists of witnesses of even date, and lists of documents of even date with the bundles attached (pages 127-720 of Appellant’s ROA dated 17th April 2026). The Appellant later filed a supplementary list of documents dated 5th September 2023. 6. The claim was opposed by the Respondent who entered appearance and filed a CONSOLIDATED response to memoranda of claim dated 17th March 2023 (pages 721-725 of ROA). 7. In support of their response, the Respondent also filed a list of witnesses dated 30th August 2023, witness statement of even date, and list of documents of even date with the bundle attached (pages 726-772 of ROA). J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 4 | 18

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8. The Claimants’ case was heard on 6th September 2023, 5th February 2025, and 14th May 2025 with seven (7) Claimants testifying as follows: the Appellant herein as PW1; Mohamed Salim Omar as PW2; Jackson Muthoka as PW3; Juma Osman as PW4; Victor Mwambu Kimanzi as PW5; John Kimanzi Musili as PW6; and Patrick Munyao as PW7. They adopted their filed witness statements and produced their documents as exhibits. Each Claimant was cross-examined by counsel for the Respondent, Mr. Mwanzia (pages 22-29 and 35-40 of ROA). 9. The Respondent’s case was heard on 9th July 2025 whereby one SWALEH ABUBAKAR BARJEBA testified as DW1 on behalf of the Respondent. He adopted his filed witness statements as his evidence in chief and produced the Respondent’s documents as exhibits. He was cross-examined by counsel for the Claimants/Appellant, Mr. Osiemo (pages 41-44 of ROA). 10. The court delivered its Judgment on 16th December 2025 allowing the Claimants’ suits, and awarding one month’s salary in lieu of notice to each Claimant, plus costs and interests (judgment at pages 10-17 and 47-54 of ROA). DETERMINATION 11. The appeal was canvassed through written submissions. Only the Appellant filed. Issues for determination J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 5 | 18

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12. In his submissions dated 7th May 2026, the Appellant identified the following issues for determination:- a) Whether the Learned Trial Magistrate erred in fact and law by failing to award the Claimants compensation for unfair termination despite finding that the Claimants were unfairly terminated by the Respondent. b) Whether the Learned Trial Magistrate erred in fact and law by failing to give reasons for his failure to award the Claimants compensation for unfair termination. 13. The court discerned there was only one issue for determination – namely Whether the Learned Trial Magistrate erred in fact and law by failing to award the Claimants compensation for unfair termination despite finding that the Claimants were unfairly terminated by the Respondent 14. The grounds for the appeal were as followsa. The Honourable Magistrate erred in fact and law by failing to award the Claimants compensation for unfair termination despite finding that the Claimants were unfairly terminated by the Respondent. b. The Honourable Magistrate erred in fact and law by failing to give reasons for his failure to award the Claimants compensation for unfair termination. J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 6 | 18

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The appellant’s submissions 15. The Appellant submitted that once a court reaches a conclusion that an employee’s termination is unfair, it is obligated to consider the remedies available under section 49. Having found that the Appellants were unfairly terminated, the Trial Court should have exercised its discretion by considering the appropriate compensation taking into account relevant parameters provided under section 49 of the Employment and provide reasons for its exercise of discretion. 16. In the case of Ken freight (EA) Limited vs Benson K Nguti Petition No 37 of 2018 Supreme Court at paragraphs 33 and 38 observed:“On an award on damages, the Act limits the award a court of law can make to a maximum of 12 months’ salary. In as much as the trial Court therefore does have a discretion in the quantum of damages to award for unfair or wrongful termination of employment, it must be guided by the principles and parameters set under sub-Section 4 of Section 49 of the Employment Act. The Act does provide for a number of remedies for unlawful or wrongful termination under Section 49 and it is up to the judge to exercise his discretion to determine whether to allow any or all of the remedies provided thereunder. To us, it does not matter how the termination was done, provided the same was challenged in a Court of law, and where a Court found the same to be unfair or wrongful, Section 49 applies.” J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 7 | 18

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17. The appellant submitted that in this case, the omission to award or even consider section 49 to determine the award of compensation is a clear error of law. In awarding the remedies under section 49 (1) of the Employment Act, the Honourable Court is to consider the factors under section 49 (4). For instance, in this case the Court can consider the relevant factors under section 49 (4) (a), (b), (e) and (i), of the Employment Act namely: “(a) the wishes of the employee; (b)the circumstances in which the termination took place, including the extent, if any, to which the employee caused or contributed to the termination; and (e)the employee's length of service with the employer; (i)the right to press claims or any unpaid wages, expenses or other claims owing to the employee;” 18. The appellants submitted that considering that they did not contribute to the unfair termination and they worked for the Respondent between 9 months and 31 years as follows: 1) E001 worked for 13 years 2) E001 worked for 2 years 3) E 003 worked for 4 years 4) 004 worked for 2 years 5) E 005 worked for 31 years 6) E 006 worked for 3 years 7) E 007 worked for 11 years 8) E008 worked for 2 years 9) E009 worked for 2 years J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 8 | 18

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10) E 010 worked for 4 years 11) E011 worked for 11 months 12) E12 worked for 11 months 13) E13 worked for 3 years 14) E14 worked for 2 years 15) E 15 worked for 1 year 16) E 16 Worked for 3 years 17) E 17 worked 2 years 18) E 18 worked for 3 years 19) E 19 worked for 2 years 20) E 20 worked for 2 years 21) E 21 worked for 2 years 22) E 22 worked for 4 years 3 23) E23 worked for 3 years 24) E 24 worked for 2 years 25) E 25 worked for 2 years 26) E 26 worked for 2 years 27) E 27 worked for 3 years 28) E 28 worked for 4 years 29) E 29 worked for 2 years 30) E 30 worked for 13 years 31) E31 worked for 12 years 32) E 32 worked for 3 years 33) E33 worked for 1 year J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 9 | 18

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34) E 34 worked for 2 years 35) E 35 worked for 2 years 36) E 36 worked for 1 year 13. 19. The appellants sought for this court to consider the factors under section 49 of the Employment and exercise its discretion by awarding each Claimant appropriate compensation considering their length of service. 20. On whether the Learned Trial Magistrate erred in fact and law by failing to give reasons for his failure to award the Claimants compensation for unfair termination the appellant submitted- It is a cardinal principle of justice that courts must explain the basis of their decisions. Reasons demonstrate that the court applied its mind to the dispute and enable parties to know why they won or lost. Article 50(1) of the Constitution guarantees a fair hearing, which includes a reasoned determination. 1In the present matter, the Appellants specifically sought compensation for unfair termination. The court found termination unfair, yet gave no explanation for refusing compensation. In the case of Hon Mr Justice Martin Mati Muya vs. The Tribunal Appointed to investigate the conduct of Justice Martin Mati Muya, Judge of the High Court of Kenya Supreme Court Petition No. 4 of 2020 the Apex Court yet again observed as follows at paragraph 99: “…In this regard, there is a duty on judges to give reasons for their decision. It is only by giving reasons for their decisions that those aggrieved may J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 10 | 18

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appeal those decision. Transparency that builds public confidence in the judicial process will be achieved through reasoned decisions ….” 21. Similarly, the Court of Appeal in Ol Pajeta Ranching Limited vs. David Wanjau Muhoro [2017] e KLR the Court held as follows where the Court does not provide consideration and /or reasons: “The trial judge did not at all attempt to justify or explain why the respondent was entitled to the maximum award. Yes, the trial judge may have been exercising discretion in making the award. However, such exercise should not be capricious or whimsical. It should be exercised on sound judicial principles. We would have expected the Judge to exercise such discretion based on the aforesaid parameters. In absence of reasons justifying the maximum award, we are inclined to believe that the trial Judge in considering the award took into account irrelevant considerations and or failed to take into account relevant considerations, which act then invites intervention.” Decision 22. The appellants in their consolidated cases sought the following reliefi. A declaration that the Claimants termination from employment amounted to unlawful and unfair termination. ii. Compensation @ 12 months’ salary pursuant to Section 49 of the Employment Act iii. I month’s salary in lieu of notice iv. Underpayment J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 11 | 18

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v. Interest at Court rates on (b) and (c) above from the date of the Claimant’s termination (23rd August 2021) till payment in full vi. Costs of the suit vii. Any other relief that this Honourable Court may deem fit and just to grant. 23. The trial court in its judgment dated 16th December 2025 held as follows‘The business of the respondent may have hit turbulent times but the employees' rights under Section 41 of the Employment Act ought to have been taken care of. Even if one or a few of the employees involved him/herself in an illegality, only that one ought to have been summarily dismissed to the exclusion of the others. No termination letter was also produced by either party to show the reason and circumstances of termination. In the circumstances of this case, although I find that the respondent had a right to terminate employment and therefore the termination was lawful, the way it was done was in an unjust manner and therefore amounts to unfair termination of employment within the margin of Section 41 of the Act. Being unfair termination, I award each of the claimant one month's salary in lieu of notice….’ 24. The court finds 2 key decisions by the trial court – ‘ In the circumstances of this case although I find that the respondent had a right to terminate employment and therefore the termination was lawful….’ and ‘the way it was done was in an unjust manner and therefore amounts to unfair termination of employment within the margin of Section 41 of the Act.’ J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 12 | 18

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25. In essence, the trial court found the reason for the termination to be lawful but without compliance with procedural fairness under section 41 of the Employment Act to wit‘41. Notification and hearing before termination on grounds of misconduct (1)Subject to section 42(1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation. (2)Notwithstanding any other provision of this Part, an employer shall, before terminating the employment of an employee or summarily dismissing an employee under section 44(3) or (4) hear and consider any representations which the employee may on the grounds of misconduct or poor performance, and the person, if any, chosen by the employee within subsection (1) make.’ 26. On finding unfair termination the trial court had the option on the remedies to award as provided under section 49(1) of the Employment Act to wit‘Where in the opinion of a labour officer summary dismissal or termination of a contract of an employee is unjustified, the labour officer may recommend to the employer to pay to the employee any or all of the following— J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 13 | 18

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(a)the wages which the employee would have earned had the employee been given the period of notice to which he was entitled under this Act or his contract of service; (b)where dismissal terminates the contract before the completion of any service upon which the employee's wages became due, the proportion of the wage due for the period of time for which the employee has worked; and any other loss consequent upon the dismissal and arising between the date of dismissal and the date of expiry of the period of notice referred to in paragraph (a) which the employee would have been entitled to by virtue of the contract; or(c)the equivalent of a number of months wages or salary not exceeding twelve months based on the gross monthly wage or salary of the employee at the time of dismissal.’ 27. The court upholds the decision cited by the appellant in Kenfreight (EA) Limited v Nguti [2019] KESC 79 (KLR) on the remedies to be granted on finding unfair termination. The Supreme Court held as follows‘When giving an award under section 49 of the Employment Act, a court of law is expected to exercise judicial discretion on what is fair in the circumstances. The Black’s Law Dictionary 9th edition at page 534 defines judicial discretion as follows:“the exercise of judgment by a judge or court based on what is fair under the circumstances and guided by the rules and principles of law; a court’s power to act or not to act when a litigant is not entitled to demand the act as a matter of right” J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 14 | 18

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28. The appellants faulted the trial court for failing to give reason as to why it only granted the remedy of notice payment and failed to further award compensation. It emerges from the Kenfreight decision that the award under section 49(1) is an exercise of judicial discretion taking into account what is fair in the circumstances. It is true the court did not give reason why it never awarded compensation under section 49(1)c). The court is then invited to decide whether the failure to give reasons for the non-award was capricious and whether the court erred in law in failing to award compensation. In doing so, the court is guided by decision in Mbogo V Shah [1968] EA where De Lestang V.P (As He Then Was) Observed At Page 94: “I think it is well settled that this court will not interfere with the exercise of its discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it has failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion.’’ 29. In Kenfreight (EA) Limited v Nguti [2019] KESC 79 (KLR), where on the remedies the Supreme Court held in paragraph 38 – ‘What then should be the correct award on damages be based on? Having keenly perused the provisions of section 49 of the Employment Act, we have no doubt that once a trial court finds that a termination of employment as wrongful or unfair, it is only left with one question to determine, namely, J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 15 | 18

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what is the appropriate remedy? The Act does provide for a number of remedies for unlawful or wrongful termination under section 49 and it is up to the judge to exercise his discretion to determine whether to allow any or all of the remedies provided thereunder. To us, it does not matter how the termination was done, provided the same was challenged in a court of law, and where a court found the same to be unfair or wrongful, section 49 applies.’ 30. The trial court in the instant case found the business of the respondent had closed in the year 2021 due to performance challenges and there was evidence of attempts to sell the business premises. circumstances under which the award was decided. Those were the The trial court was persuaded that the reason for the termination was lawful due to the closure. I discerned that this finding is not contested in appeal. The trial court had judicial discretion to award either remedy of Notice payment and/ or compensation as provided for under section 49(1). The word ‘or’ is used before the remedy of compensation under section 49(1)c), meaning it is not a must to grant both notice payment and compensation on finding unfair termination. It depends on what is fair in the circumstances. This was also the finding in paragraph 41 of the Kenfreight decision of the Supreme Court (supra)‘Guided by the above analysis, we find that once a court has reached a finding that an employer has unlawfully terminated an employee’s employment, the appropriate remedy is the one provided under section 49 of J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 16 | 18

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the Employment Act. We also need to clarify that a payment of an award in section 49(1(a) is different from an award under section 49(1)(b) and (c). Section 49 allows an award to include any or all of the listed remedies provided that a court in making the award, exercises its discretion judiciously and is guided by section 49(4(m).’ 31. Having re-examined the trial court’s application of the law, specifically section 49 of the Employment Act on the available remedies for unfair termination, I find no basis to disturb the trial court’s exercise of discretion in failing to award compensation in addition to the notice payment. The judgment shows that the exercise of discretion was informed by findings of lawful grounds for termination and that the respondent’s business had closed due to non-performance. There was evidence of attempts to sell the business. I find no basis to interfere with the discretion of the trial court on the remedies. Disposition 32. I hold the appeal to lack merit and is dismissed. The appeal was not challenged. I make no order as to costs. 33. The file is marked as closed. 34. It is so Ordered. J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 17 | 18

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DATED, SIGNED, AND DELIVERED VIRTUALLY AT MACHAKOS THIS 18 TH DAY OF SEPTEMBER, 2026. Jemimah Keli, JUDGE. IN THE PRESENCE OF: Court Assistant: Otieno Appellant – Omondi /Osiemo Respondent – Gatimu h/b Mwanzia J U D G M E N T I N M A C H A K O S E L R C A N O . E 0 0 7 O F 2 0 2 6 P a g e 18 | 18

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