Crown Bus Services Limited v Sheban Manyasa Obwonya

2. Dissatisfied with the judgment, the Appellant (the Respondent in the lower court), through Nikita Otinga & Associates Advocates, filed a memorandum of appeal dated 2nd December 2025 seeking that the appeal be allowed and the entire judgment of the lower court be set aside with costs. 3. The appeal is based on the following grounds – (i) THAT the learned trial magistrate erred in law in failing to hold that the claim for unpaid salaries constituted a continuing injury which was statute-barred. (ii) THAT the learned trial magistrate erred in law in failing to appreciate the fact that the award for severance pay is pegged on fifteen (15) days for a complete year of service. (iii) THAT the learned trial magistrate erred in law and fact in failing to address, consider and/or determine the issues submitted on by the Appellant in its written submissions. 4. The Respondent opposed the appeal through Samba & Company Advocates. 5. By consent, the court directed that the appeal be canvassed by way of written submissions. Mr. Otinga for the Appellant filed written submissions dated 6th May 2026 and Miss Chesire for the Respondent filed written submissions dated 20th April 2026. ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 2 | 16

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II. SUBMISSIONS BY COUNSEL 6. Counsel for the Appellant submitted globally, arguing that the Appellant’s appeal is meritorious and ought to be allowed with costs. Counsel submitted that the trial magistrate erred in awarding Kshs264,187.00 as unpaid salary, yet the claim was a continuing injury which ceased upon termination of employment on 1st November 2021, while the cause was filed on 14th February 2023, outside the 12 months limitation period under Section 90 of the Employment Act (now Section 89 of the Employment Act). Counsel cited the decisions in The German School Society & Another v Ohany & Another [2023] KECA 894 (KLR) and Dina Management Ltd v County Government of Mombasa & 5 others [2023] KESC 30 (KLR) arguing that the issue of limitation being a point of law and jurisdiction may be raised at any stage. 7.On the award of severance pay, Counsel submitted that the trial magistrate erred in awarding Kshs20,652.90. Counsel contended that under Section 40(1)(g) of the Employment Act, severance is payable at 15 days’ pay for each completed year of service. It was submitted that the Respondent served for one complete year and, based on a basic salary of Kshs20,000/= the proper award ought to have been Kshs11,538.46. 8.Counsel further submitted that the trial magistrate failed to consider and determine the issues raised in the Appellant’s written submissions, ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 3 | 16

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particularly the issue of limitation, thereby occasioning an error of law warranting intervention on appeal. Counsel therefore urged the Court to allow the appeal with costs to the Appellant. 9.On the other hand, Counsel for the Respondent submitted on the following issues – Whether the Appellant has made out a case to warrant interference with the trial’s court’s judgement; Whether the Respondent’s claim for unpaid salaries is time-barred under Section 90 of the Employment Act, 2007; Whether the Respondent is entitled to severance pay at the rate of fifteen (15) days’ pay for each completed year of service; and Who is entitled to costs of this appeal. 10.On the first issue, Counsel argued that the Appellant did not demonstrate any error of law or fact warranting this could to interfere with the trial court’s judgment in buttressing this assertion, Counsel cited the decision in Mwanasokoni v Kenya Bus Services Ltd [1982– 88] 1 KAR 278 on the principles governing the extent of interference of a Court on appeal. 11.On unpaid salaries, Counsel submitted that non-payment of salary constitutes a continuing injury, as the obligation to pay wages arises on each pay date and each failure amounts to a fresh breach. Counsel relied on G4S Security Services (K) Limited v Joseph Kamau & 468 Others [2018] eKLR maintaining that the claim was filed within 12 months after the cessation of the employment relationship and was therefore not time-barred under Section 89 of the Employment Act. ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 4 | 16

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In the alternative, Counsel submitted that the Appellant waived its right to raise the defence of limitation by failing to raise the same at the trial. 12.On the award of severance pay, Counsel submitted that the Respondent’s termination was by way of redundancy and that Section 40(1)(g) of the Employment Act entitled him to severance pay at not less than 15 days’ pay for each completed year of service. It was submitted that having served for 20 months, the Respondent had completed one year and was therefore properly awarded severance pay for that completed year. Counsel cited the decision in Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 Others [2014] eKLR and distinguished the decision in Mwangi v National Organization of Peer Education (NOPE) [2026] KEELRC 933 (KLR), on the basis that the latter did not involve redundancy. 13.Counsel therefore urged the Court to dismiss the appeal in its entirety, uphold the judgment delivered on 21st November 2025, and award the costs of the appeal to the Respondent. III. ISSUES FOR DETERMINATION 14.The court has perused the record of appeal, including the proceedings in the lower trial court, the memorandum of appeal, and the submissions by Counsel for both parties as summarized above. The following issues commend themselves to the court for determination – ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 5 | 16

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a) Whether the termination of the Respondent was unlawful? b) Whether the lower trial court arrived at the correct decision in regard to (a) above and the reliefs awarded? c) What are the appropriate orders for this court to make in regard to the above issues and on costs? IV.TERMINATION 15.As a first appellate court, this Court is obligated to evaluate the evidence on record and arrive at its own conclusions, but bearing in mind that it neither heard nor recorded the evidence during the trial – see Selle V Associated Motor Boat Co. Ltd (1968) EA 123. 16.The background to this appeal is that the Respondent filed Kakamega MCELRC cause No. E003 of 2023 and the Appellant defended the cause. The cause was heard viva voce. As per his pleadings and evidence in the lower trial court, the Respondent’s case was that he was employed as a supervisor at the Appellant’s booking office and later as a Courier Clerk with effect from 12th February 2020. His case was that he was entitled to a basic salary of Kshs23,000/=. He pleaded that his salary was increased to Kshs25,000 until his dismissal on 1st November 2021. He pleaded that he was not paid house allowance and that, although he worked overtime, the same was unpaid. He stated that on 1st October 2021 he was issued with a ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 6 | 16

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redundancy notice culminating in his termination with effect from 1st November 2021. 17.The Respondent’s case was that the redundancy was substantially and procedurally flawed for failure by the Appellant to comply with the provisions of Section 40(1) (c), (e), (f), & (g) of the Employment Act. 18.It is on the basis of the foregoing that the Respondent prayed for the following reliefs – a) Declaration that the termination of the claimant on account of redundancy was unfair termination, therefore illegal and unlawful. b) Declaration that the Respondent have not complied with the requirements set forth in Section 40(1) (c), (e), (f) & (g) of the Employment Act. c) Damages for breach of contract of employment. d) Payment as calculated below – i) Salary for one month in lieu of notice………25000/ii) Unpaid salaries……………………………...316,129/iii) Unpaid house allowance………………..….60,000/iv)Unremitted NHIF Deduction……………….10,000/= v) Unremitted NSSF Deduction…………….….8,000/= vi)Severance pay…………………………….….20,833/= vii)Unpaid leave days …………………………35,000/= ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 7 | 16

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viii) Unpaid overtime dues……………………..41,500/= Total ………………….461,608/= 19.In the response to the memorandum of claim, the Appellant stated that the Respondent was employed on a consolidated wage of Kshs23,000/= and no increment was ever given. The Appellant denied that the termination was unlawful and stated that it had complied with the law in effecting the redundancy. 20.It is not in dispute that the Respondent was an employee of the Appellant. The employment relationship was regulated and governed by a formal letter of appointment, as a courier clerk, dated 25th January 2021, exhibited at page 29 of the record of appeal and produced by the Respondent during the trial in the lower court. The Respondent also produced an undated contract of employment (See pgs. 30-32 of the record of Appeal), which was the initial contract when the Respondent was engaged as a supervisor on 12th February 2020. The production of the same was not objected to during the trial and, as such, the court shall rely on the same as the foundation of the relationship between the parties. 21.That initial contract commenced on 12th February 2020 and, amongst the terms of the contract, was a basic salary of Kshs20,000/= and a house allowance of Kshs3,000/=. There was no evidence that this salary changed in the letter of his appointment as a courier clerk. 22.The Respondent was declared redundant due to the abolition of his ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 8 | 16

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office and the question was whether the redundancy as applied was procedural and lawful. The trial court found that, while the Appellant had issued a redundancy notice to the Respondent dated 1st October 2021, the Appellant failed to serve the said notice to the area Labour Office as required under Section 40(1) (b) of the Employment Act. The trial court further found that the Appellant failed to pay severance pay as required in law on account of redundancy. The trial court found that the reason for the redundancy was due to financial disruption occasioned by the Covid -19 Pandemic, but held that the Appellant had failed to comply with the payment of severance pay and notification to the labour office – See page 135 of the Record of Appeal. 23.The Respondent had pleaded that the Appellant Violated Section 40 (c) of the Employment Act that – the employer has, in the selection of employees to be declared redundant, had due regard to seniority in time and to the skill, ability and reliability of each employee of the particular class of employees affected by the redundancy. The Respondent testified that he was the supervisor of the Western Region under the Appellant – See page 125 of the Record of Appeal – and thus he was the only person in that position, such that no selection criteria was needed in the redundancy process. 24.The Respondent also pleaded that the Appellant Violated Section 40(e) of the Employment Act that – the employer has, where leave is ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 9 | 16

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due to an employee who is declared redundant, paid off the leave in cash. The trial court found that the Appellant had not taken leave and that he had not been paid for the same. 25.The trial court also found that the Appellant had violated Section 40(f) of the Employment Act which provides that – no employee shall be rendered redundant unless the employer has paid an employee declared redundant not less than one month's notice or one month's wages in lieu of notice. 26.The trial court found that while the Respondent had been issued with a notice of the intended redundancy, the notice was not sent to the Local labour office by the Appellant and, the Respondent was entitled to one month’s salary in lieu of notice. 27.Further, the trial court found that the Appellant did not comply with Section 40(g) of the Employment Act that – the employer has paid to an employee declared redundant severance pay at the rate of not less than fifteen days’ pay for each completed year of service. The Appellant’s witness, James Mwakio (DW1), conceded that the severance payment had not been paid to the Respondent because he had allegedly refused to collect the same – See page 128 of the record of appeal. It follows thus that the Appellant did not comply with the mandatory provisions on redundancy under Section 40 of the Employment Act and that rendered the entire redundancy process flawed and unlawful. ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 10 | 16

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28. In that regard, therefore, the trial lower court arrived at the correct finding and conclusion, and this Court has no reason(s) for disturbing that holding. V. RELIEFS 29.The court shall now proceed to consider whether the Respondent was entitled to the reliefs sought in the claim as awarded by the trial court. 30.Prayers (a) and (b) sought for declarations that the redundancy process was flawed and contrary to Section 40 of the Employment Act. The trial court correctly found and declared that the termination of the claimant on account of redundancy was unfair termination and therefore illegal and unlawful. Further, the trial court correctly declared that the Respondent had not complied with the requirements on redundancy as set out in Section 40(1) (c), (e), (f), & (g) of the Employment Act. 31.Prayer (c) was for damages for breach of the contract of employment. The trial court found that the effects of Covid-19 Pandemic led to financial difficulties on the part of the Respondent and thus the redundancy was necessary. In termination through redundancy, an employee is entitled to severance pay rather than compensation. This relief for damages was thus not available to the Respondent. 32.Prayer (d) contained various items. Prayer d (i) was for salary for one ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 11 | 16

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month in lieu of notice in the sum of Kshs25,000/=. The Respondent testified that he had no proof that there was a salary increment from Kshs2300/= to Kshs25000/= - page 122 of the record of appeal. Therefore, the Appellant was entitled to payment of one month’s salary in lieu of notice in light of the flawed process at the rate of Kshs20,652.90, the net salary. The court shall not interfere with the award by the trial court. 33.Prayer d (ii) was for unpaid salaries of Kshs316,129/=. There was no period indicated in the claim to which the unpaid salary related. The trial court indicated that, on reviewing the M-PESA statement, there was proof that the Respondent had not been paid his salary fully – see page 136 of the record of appeal – and awarded him a sum of Kshs264,187/=. 34.The Appellant asserts that this award was statute-barred by dint of it being a continuing injury. The Respondent countered that that plea was overtaken by events and could not be pleaded on appeal. A jurisdictional issue may be raised at any stage of proceedings as it goes to the core of court proceedings. In German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA 894 (KLR), while addressing the question of what constitutes a continuing injury, the Court of Appeal cited the Supreme Court of India in M. Siddiq v Suresh Das (2020) 1 SCC 1, where that court observed that – What makes a wrong, a ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 12 | 16

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wrong of a continuing nature is the breach of a duty which has not ceased but which continues to subsist. The breach of such a duty creates a continuing wrong and hence a defence to a plea of limitation. 35.The trial magistrate, besides awarding unpaid salary, also awarded to the Respondent unpaid leave days in the sum of Kshs34,421.50. 36.The Court has critically examined the above awards and finds that the reliefs on unpaid salary and annual leave accrued to the respondent at the end of the month or year and were never paid or the breach remedied. The failure by the appellant to pay the salary on time, or leave, constituted continuing injuries pursuant to Section 89 of the Employment Act which provides that – Notwithstanding the provisions of section 4(1) of the Limitation of Actions Act(Cap. 22), no civil action or proceedings based or arising out of this Act or a contract of service in general shall lie or be instituted unless it is commenced within three years next after the act, neglect or default complained or in the case of continuing injury or damage within twelve months next after the cessation thereof. (Emphasis added) 37.A claim for the above reliefs ought to have been filed in court within 12 months of termination. The court notes that the termination was effective from 1st November 2021 and the cause was filed in the trial court on 14th February 2023, which was 15 months and 13 days after the termination and, therefore, outside the statutory limit of 12 ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 13 | 16

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months. 38.It follows thus that the award for unpaid salary and unpaid leave could only be available to the Respondent if he had filed his claim within the statutory timelines. The Appellant submitted on the issue of limitation – see pages 110-114 of the Record of Appeal – but the trial magistrate failed to address the same in the judgement. Therefore, the trial magistrate arrived at the wrong finding for failure to consider the jurisdictional issue on limitation. The awards for unpaid salary and unpaid leave are thus hereby set aside. 39.Prayer (d) (iii) was for unpaid house allowance in the sum of Kshs60,000/= while prayer (viii) was for unpaid overtime. The trial court found that the Respondent was paid a consolidated salary and thus was not entitled to house allowance. On the claim for overtime, the trial court indicated that the Respondent had not proved that he had worked overtime. The said prayers, while not awarded by the trial court, were also continuing injuries and they were statute-barred. 40.Prayer (d) (iv) was for unremitted NHIF deductions in the sum of Kshs10,000/= while Prayer (d) (v) was for unremitted NSSF deductions in the sum of Kshs8,000/=. The trial magistrate rightly found that there is a mechanism for enforcement for non-compliance with remittance of NSSF and NHIF deductions and thus the same could not be awarded to the Respondent. The court shall not interfere with that finding. ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 14 | 16

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41.On the award of severance pay of Kshs20,833/=, the trial court awarded Kshs20,652.90, equivalent to the Respondent’s one month’s net salary. The Appellant objected to this award, arguing that the Respondent was employed for the period from 12/02/2020 to 01/11/2021. There was thus only one complete year of service. Having been terminated on account of redundancy, the Respondent was indeed entitled to severance pay for the one complete year of service calculated as follows – (15 days x 1 year x Kshs20,000/= basic pay)/ 26 days = Kshs11,538.46. VI. ORDERS 42. Flowing from the foregoing, the court makes the following orders – a) The appeal shall succeed to the extent that the award of Kshs264,187/= as unpaid salary and unpaid leave shall be and are hereby set aside. b) The severance pay of Kshs20,652.90 is hereby substituted with the sum of Kshs11,500/=. c) In substitution of the judgment for Kshs339,914.30, a judgment shall be and is hereby entered in favour of the Respondent in the sum of Kshs32,191.36 plus interest from the date of judgment of the lower court, 21st November 2025, till payment in full. The said sum is made of – (i) One month’s salary in lieu of notice......Kshs20,652.90 ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 15 | 16

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(ii) Severance Pay........................................Kshs11,538.46 Total….…................................Kshs32,191.36 d) A fresh decree shall issue accordingly. e) Costs of the trial in the lower court to the Respondent as ordered. f) Each party shall meet own costs for this appeal. DELIVERED VIRTUALLY, DATED, AND SIGNED AT KAKAMEGA THIS 21ST AY OF SEPTEMBER 2026. .................................... DAVID NDERITU JUDGE ELRC KAKAMEGA APPEAL NO. E032 OF 2025 JUDGMENT PAGE 16 | 16

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