Mbuthia v Lexis International Limited

6. The Claimant further contends that the Respondent underpaid him for the duration of his contract. He avers that the Respondent used to pay him Ksh. 30,000.00 which was below the statutory minimum salary for his position. 7. The Claimant also alleges that the Respondent did not permit him to utilize his annual leave for the duration of his contract. He further asserts that the Respondent did not pay him for overtime work. 8. The Claimant thus prays for various reliefs as set out in the Memorandum of Claim to wit the following:a. An order for reinstatement back into the Respondent’s employment. b. Pro rata gratuity pay in the sum of Ksh. 180,000.00. c. Two months’ salary in lieu of notice to terminate his contract of service in the sum of Ksh. 60,000.00. d. Compensation for loss of employment in the sum of Ksh. 90,000.00. e. Underpayment of salary in the sum of Ksh. 14,976.00. f. Unpaid leave days in the sum of Ksh. 240,000.00. g. Service pay in the sum of Ksh. 120,000.00. h. General damages for wrongful dismissal from employment. i. Interest. j. Costs of the suit. 9. The Respondent has disputed the claim. It has also lodged a counter-claim against the Claimant. 10. The Respondent avers that it engaged the Claimant’s services as a construction site driver with eect from August 2011. It contends that the Claimant’s consolidated monthly salary was Ksh. 30,000.00. 11. The Respondent avers that the amount paid to the Claimant was in line with the law. It relies on Legal Notice No. 112 which published the Wages (General) Order of 2017 to support its contention. 12. The Respondent avers that the Claimant’s services were terminated on 19th May 2020 on account of gross misconduct. It avers that the Claimant failed to account for 171 trappers which had been entrusted to him to deliver to a construction site. 13. The Respondent avers that it wrote to the Claimant on 15th May 2020 regarding the missing trappers. It contends that it warned him that his services would be terminated if he repeated the misconduct. 14. The Respondent avers that after the incident relating to the trappers, the Claimant was tasked to deliver TMT bars to a site in South C area within Nairobi. However, it contends that the TMT bars were lost whilst in his custody. 15. The Respondent contends that the two incidents resulted in loss of condence in the Claimant. As such, it avers that a decision was taken to terminate his services. 16. The Respondent avers that it expected the Claimant to discharge his duties with honesty and integrity. It contends that his failure to account for the aforesaid construction material put his character into question. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 2

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17. The Respondent asserts that the value of the construction material which were lost whilst under the care of the Claimant was Ksh. 256,500.00. As such, it has counter-claimed for this amount. The Respondent further prays for general damages and costs of the suit. 18. The Claimant disputes the counter-claim. He has led a general denial in this respect. 19. During trial, the Respondent asserted that after the Claimant committed the wrongful acts, he was asked to report to the oce for discussions on the matter. However, it contends that he refused to comply with this directive. It avers that instead of reporting to the oce, the Claimant simply dropped the motor vehicle which had been assigned to him at its (the Respondent’s) parking yard and left. 20. The Respondent’s witness stated that the Claimant’s duties entailed picking and dropping construction material to construction sites. He said that it was the Claimant’s responsibility to ensure that the quantity of the material he collected from one site matched what he delivered on the other site. He contended that the Claimant was required to report any discrepancies in the quantity of the deliveries but did not do so in respect of the missing material. 21. The witness stated that on 15th May 2020, the Claimant delivered less trappers than he had collected. He said that the trappers were less by 171 pieces. 22. The witness stated that although the Claimant was asked to sign a letter of warning in respect of the infraction relating to the loss of trappers, he did not do so. He (the witness) averred that he (the Claimant) avoided to report to the oce for this purpose. 23. The witness stated that on 19th May 2020, the Claimant was involved in another incident relating to loss of deformed bars. He (the witness) contended that quantity of deformed bars he (the Claimant) delivered to a site were less than the bars he had collected. He averred that following this incident, the Respondent summarily terminated the Claimant’s services. Issues for Determination 24. After evaluating the pleadings, evidence and submissions by the parties, the following issues arise for determination:a. Whether the Respondent unfairly terminated the Claimant’s contract of service. b. Whether the Claimant is entitled to the reliefs which he seeks in the Memorandum of Claim. c. Whether the Respondent’s counter-claim is merited. Analysis 25. The Respondent has accused the Claimant of loss of construction materials which were entrusted to him for delivery to two construction sites. According to the Respondent, the Claimant’s failure to account for the materials implies that he was complicit in their loss. 26. The evidence on record shows that the Respondent wrote to the Claimant on 15th May 2020 regarding the loss of 171 trappers. It informed him that the trappers were lost whilst in his custody and that a decision had been made to recover the value of the trappers from his salary. It further warned him that he risked dismissal from employment if he repeated the infraction. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 3

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27. It is evident that the Claimant received this letter. The fact that he tendered a copy thereof in evidence implies that he was in possession of it. As such, it is apparent that the Respondent made him aware of the accusations against him in respect of the lost trappers before his services were terminated. 28. Despite this, there is no evidence that the Claimant wrote to the Respondent to contest the accusations. This covertly suggests that he acceded to the accusations thereby providing the Respondent a reasonable basis to genuinely believe that he was involved in the misconduct in question. 29. The law does not obligate an employer to have infallible evidence pointing to the commission of an infraction by an employee before he (the employer) can terminate the employee’s services on account of the infraction. All that he (the employer) is required to demonstrate is that he had reasonable grounds to genuinely believe that the employee had committed the infraction in question. 30. The aforesaid is self-evident from section 43(2) of the Employment Act which provides as follows:“ The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.’’ 31. This reality is further supported by case-law. For example, in the Court of Appeal case of Kenya Revenue Authority v Gitahi & 2 others [2019] KECA 300 (KLR), the Judges of the court observed on the subject as follows:“ It is improper for a court to expect that an employer would have to undertake a near forensic examination of the facts and seek proof beyond reasonable doubt as in a criminal trial before it can take appropriate action subject to the requirements of procedural fairness that are statutorily required…..The standard of proof is on a balance of probability, not beyond reasonable doubt, and all the employer is required to prove are the reasons that it “genuinely believed to exist,” causing it to terminate the employee’s services. That is a partly subjective test.’’ 32. As mentioned earlier, the Claimant’s failure to account for the construction material which were entrusted to him to deliver to various sites provided a reasonable basis for the Respondent to genuinely believe that he misappropriated the material. As such, the court nds that the Respondent had valid grounds to consider terminating his contract of service. 33. But having valid reasons to terminate an employee’s contract of service is not all that the court is concerned about whilst examining the validity of a decision to terminate the contract. In addition, the employer must demonstrate that he processed the employee’s release from service in accordance with the principles of fair procedure (seeWalter Ogal Anuro v Teachers Service Commission [2013] KEELRC 386 (KLR)). 34. The above requirement is anchored on, inter alia, section 41 of the Employment Act which obligates the employer to: inform the employee of the infraction he is accused of; provide him with an opportunity to respond to the accusation; allow him the opportunity to be represented by either a co-employee of his choice or trade union ocial. 35. Ideally, the employer is required to subject the employee to a disciplinary hearing before he can terminate his services. The employee should be provided with the charge sheet and any other material which the employer proposes to rely on to prove his case beforehand. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 4

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36. In this case, there is no evidence to suggest that the Respondent accorded the Claimant the opportunity to counter the accusations against him before he was relieved of his duties. Apart from the warning letter which it (the Respondent) issued the Claimant on 15th May 2020, there is no evidence to demonstrate that it (the Respondent) served him with a notice to show cause letter to trigger the disciplinary process against him. There is no evidence that it (the Respondent) convened a disciplinary session to consider the case against the Claimant. There is no evidence that it (the Respondent) accorded the Claimant an opportunity to be heard on the accusations against him. All that we see is the letter to terminate the Claimant’s services. 37. The Respondent asserted that it summoned the Claimant for a meeting to enable him to explain the loss of the material in question but he did not heed the summons. As such, it contends that it accorded him procedural fairness in terms of section 41 of the Employment Act. 38. However, this contention was not supported by cogent evidence. Even then, there was no evidence to demonstrate that the Claimant was informed that the alleged meeting was intended to serve as a disciplinary session contemplated under section 41 of the Employment Act. 39. The totality of the evidence on record does not suggest that the Respondent accorded the Claimant procedural fairness whilst processing his release from service. His contract of service was unprocedurally terminated. He is thus entitled to compensation for unfair termination of the contract. 40. In quantifying the amount to award for unfair termination of an employee’s contract of service, the court is required to take into account various factors. These include: the length of service by the employee; and whether the employee’s conduct contributed to the decision to terminate his contract (see section 49 of the Employment Act). 41. The parties to the instant agree that the Claimant was hired by the Respondent sometime between 2011 and 2013. His contract was terminated in May 2020. Undoubtedly, he had served the Respondent for a long time. 42. That said, it is apparent that the Claimant’s conduct greatly contributed to the Respondent’s decision to terminate his services. As noted earlier, he failed to account for construction material which were entrusted to him by the Respondent hence the decision to relieve him of his duties. 43. Section 44 (4) (g) of the Employment Act makes it clear that an employee who commits or is reasonably suspected of having committed a criminal oense against the employer or the employer’s property is guilty of gross misconduct. As such, the employer is entitled to terminate his services on this account. 44. The suspected misappropriation of the Respondent’s construction material by the Claimant ts this description. As such, the Respondent was entitled to terminate his services on this account but in accordance with fair procedure. 45. Having regard to the fact that the Claimant’s conduct greatly contributed to his tribulations, I will award him minimal compensation only to vindicate his right to due process. As such, I award him compensation for unfair termination of his contract which is equivalent to his salary for two months, that is to say, Ksh. 60,000.00. 46. The Claimant has prayed for pay in lieu of notice to terminate his contract. However, the court declines to grant this relief since, if the Respondent had followed the right procedure in terminating his services, the court would have upheld his summary dismissal from employment. This is because his conduct fell within what the law construes as gross misconduct. And as section 44 (1) of the Employment Act https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 5

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provides, an employee whose services are terminated on account of gross misconduct is not, as a matter of law, entitled to notice to terminate his contract or to pay in lieu thereof. 47. The Claimant has further prayed for gratuity and service pay. However, during his cross examination, he conceded that he was a member of the National Social Security Fund and that the Respondent had been making remittances to the Fund on his behalf. 48. Section 35(5) of the Employment Act entitles an employee whose contract is terminated on notice to service pay. However, section 35(6) thereof excludes employees who are members of the National Social Security Fund or other pension scheme from claiming this benet. As such, since the Claimant was a registered member of the National Social Security Fund and the Respondent was making remittances to the Fund for his benet, he cannot claim service pay. 49. As regards gratuity, this is not payable as a matter of right. Gratuity can only be paid if it is provided for in the agreement between the parties (see Central Bank of Kenya v Davies Kivieko Muteti [2009] KECA 367 (KLR)). 50. The Claimant did not table evidence to show that the Respondent had committed to pay him gratuity. Absent this, the claim for gratuity fails. 51. The Claimant further claimed for underpayment of salary. However, he did not present evidence to support this claim. As such, the claim fails for want of proof. 52. The Claimant made a claim for accrued leave pay of Ksh. 240,000.00. It was his case that throughout his period of service, the Respondent did not permit him to utilize his annual leave. 53. The Respondent did not controvert this claim. Apart from the general denial in respect of the claim in the statement of response,the Respondent did not present any evidence to deny or arm the claim. 54. Annual leave is a statutory right. Section 28 of the Employment Act entitles every employee who has served for twelve consecutive months to annual leave of at least 21 days. As such, the Claimant was entitled to this leave for every completed year he served the Respondent. 55. Section 9 (1) of the Employment Act requires a contract of service whose term is three months or more to be reduced into writing. Section 9 (2) thereof places the obligation of reducing the contract into writing on the employer. 56. Section 10 of the Act requires a written contract of service to speak to various matters including an employee’s leave entitlement. Section 10(7) therefore places the burden of proving or disproving compliance with a term of a contract which was to have been reduced into writing but was not on the employer. Section 74 of the Act imposes the duty of maintaining employment records, including those relating to an employee’s leave entitlements, on the employer. 57. The totality of these provisions squarely place the obligation of providing records to demonstrate whether the Claimant utilized his leave days on the Respondent. Since the Respondent did not reduce the contract of service between the parties into writing, it bears the burden, by virtue of section 10(7) of the Employment Act to table evidence to prove the contestation regarding whether the Claimant took his annual leave days. 58. Further and as seen earlier, section 74 of the Act requires the employer to maintain employment records. By virtue of this, the employer is deemed to have special knowledge of the contents of the records. As such and by virtue of section 112 of the Evidence Act, the burden lies on him (the employer) to speak to any contested matter in the records, including leave. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 6

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59. In this case, the Respondent did not discharge the burden of demonstrating that the Claimant took his annual leave for the duration of his contract. As such, the court nds that Claimant did not take his leave days and is therefore entitled to judgment for the accrued leave days (see alsoJackson Muiruri Wathigo t/a Murtown Supermarket v Lilian Mutune [2021] KECA 388 (KLR)). 60. As noted earlier, the Claimant has claimed for Ksh. 240,000.00 under this head. From November 2013 when he contends that he was hired by the Respondent to May 2020 when his contract was terminated is a period of approximately six years. If the edict under section 28 of the Employment Act is taken into account, he was entitled to annual leave of twenty one (21) days for each of the six years (21 X 6= 126 days). 61. The Claimant’s salary was Ksh. 30,000.00 per month. Thus, his daily wage rate was Ksh. 1000.00. As such, his leave entitlement for 126 days works out to Ksh. 1000 x 126 = Ksh. 126,000.00. Accordingly, judgment is entered in his favor for Ksh. 126,000.00 being his accrued annual leave pay. 62. The Claimant has prayed for an order for reinstatement back into employment. However, section 12 (3) (vii) of the Employment and Labour Relations Court Act disentitles the court from granting this relief outside three years from the date of termination of a contract of service. 63. Since the contract of service between the parties was terminated in May 2020 more than three years from the date of this decision, the remedy of reinstatement is no longer available to the Claimant. As such, it is declined. 64. The Claimant has prayed for general damages for breach of contract. However, the general position in law is that this remedy is not available for breach of contract (seeNyamweya v Asakania [2025] KEHC 1702 (KLR)). As such, it is declined. 65. I award the Claimant interest on the amounts awarded to him at court rates from the date of this judgment. 66. The Claimant is awarded costs of the primary suit. 67. The Respondent lodged a counter claim for Ksh. 256,500.00 being the alleged value of the material which the Claimant misappropriated. However, it (the Respondent) did not present evidence to prove the value of the material. 68. The Respondent’s claim for Ksh. 256,500.00 is in the nature of a special damage claim. As such, it not only ought to have been specically pleaded but also proved (Mochama v Ogoti [2025] KEHC 1468 (KLR)). Consequently, absent specic proof of the gures claimed, the counter claim fails. 69. Each party to bear own costs in respect of the counter claim. 70. The award is subject to the statutory deductions which were applicable at the time the contract between the parties was terminated. Summary of the Findings and Orders 71. After evaluating the pleadings, evidence, submissions by the parties and the law on the matter, I make the following ndings and attendant orders:a. I nd that the Respondent’s decision to terminate the Claimant’s contract of service did not accord with the requirements of fair procedure. b. Consequently, I declare the decision unfair and unlawful. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 7

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c. I award the Claimant Ksh. 60,000.00 as compensation for unfair termination of his contract of service. d. I decline the claim for pay in lieu of notice to terminate the Claimant’s contract of service. e. I decline the claims for service pay and gratuity. f. I decline the claim for underpayment of salary. g. I award the Claimant Ksh. 126,000.00 as pay in lieu of accrued leave days. h. I decline the prayers for reinstatement and general damages for breach of contract. i. I award the Claimant interest on the amounts awarded to him at court rates from the date of this judgment. j. The Claimant is awarded costs of the primary suit. k. I decline to grant the Respondent’s counter claim. l. Each party to bear own costs in respect of the counter claim. m. The award is subject to the statutory deductions which were applicable at the time the contract between the parties was terminated. DATED, SIGNED AND DELIVERED ON THE 24TH DAY OF SEPTEMBER, 2026 B. O. M. MANANI JUDGE In the presence of: …………….for the Claimant …………….for the Respondent Order In light of the directions issued on 12th July 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2564/eng@2026-09-24 8

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