Ol Pejeta Ranching Ltd v Muhoro (Civil Appeal 42 of 2015) [2017] KECA 329 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed racial pay discrimination and unfair dismissal, but cut the employee's total award from roughly Kshs. 21.7 million to about Kshs. 9.2 million.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the claim for discrimination was time barred
- 2.Whether the Judge erred in his finding that discrimination had been proved
- 3.If discrimination was not proved, whether the Judge correctly assessed the quantum of damages payable
- 4.Whether the respondent's termination was unfair and unlawful and the consequences thereof
- 5.Whether the cross-appeal should be allowed
Key legal issues
#Whether the discrimination claim was barred by limitation under section 90 of the Employment Act as a continuing injury
The claim was not time barred because the defence of continuing injury and the one-year limitation period was never pleaded or raised in the trial court and could not be raised for the first time on appeal; the claim was also anchored on human rights violation.
The record showed the continuing-injury defence was absent from the pleadings, evidence and submissions below, and the trial judge never addressed it. Relying on Mary Kitsao Ngowa v Krystalline Limited, the Court held parties are bound by their pleadings and may not switch defences on appeal. Further, claims anchored on human rights violations ordinarily attract no limitation sanction, though they should be brought promptly.
Whether racial discrimination by way of unequal pay for work of equal value was proved
Discrimination was proved. The pay disparity between the black finance manager and white managers was not objectively justified, and the appellant failed to discharge the burden of proof under section 5(7) of the Employment Act and sections 107 and 108 of the Evidence Act.
Before the 2004 takeover the respondent and comparators earned similar salaries; after it, white managers earned disproportionately more. The appellant's explanation that white managers were consultants was rejected on the evidence, and no evidence of superior qualifications was tendered despite a court order to produce records. Internal emails and later salary adjustments corroborated acknowledged historical disparities.
Whether the quantum of damages for discrimination was correctly assessed
The trial judge adopted the wrong approach; damages for discrimination must be a composite or global sum, not back pay calculated from salary differentials. The award of Kshs. 18,256,947 was set aside and replaced with Kshs. 7,500,000.
Following South African Airways v G.J.J.V.V, the Court endorsed the reasoning that pegging awards to months of remuneration risks high earners receiving more compensation than lower earners for the same injury. Assessment of damages is discretionary but must consider general conditions such as inflation and comparable local awards; the back-pay calculation converted the claim into one of underpayment.
Whether the respondent's termination was unfair and unlawful
The termination was both substantively and procedurally unfair. No valid reason was proved since the audit reports exonerated the respondent of fraud, and the procedure was unfair because he was not supplied the audit report or specific charges in time to prepare a defence and his appeal was decided without a hearing.
Two employees admitted the fraud and were dismissed; neither the UHY nor PWC reports implicated the respondent, attributing the loss to weak institutional controls the respondent had long complained about. Under sections 43 and 45 of the Employment Act the employer bore the burden of proving valid reason and fair procedure, which it failed to discharge.
Whether the 12 months' gross pay compensation for unfair termination was justified
The maximum award was unjustified because the trial judge gave no reasons for granting the maximum; it was reduced to 6 months' gross pay (Kshs. 1,744,542).
Section 49 remedies require the court to consider factors such as length of service, conduct of the employee and contribution to the termination. Although the award was discretionary, the exercise must rest on sound judicial principles; the absence of reasons justified appellate intervention, particularly as the respondent had already received compensation for discrimination.
Legal principles established
#- On a first appeal, the Court of Appeal must re-evaluate, re-assess and re-analyse the evidence and draw its own conclusions, while making due allowance for the fact that it did not see or hear the witnesses.
- In equal pay for work of equal value claims, the claimant must establish that the unequal pay was caused by the employer discriminating on unlawful grounds, and a suitable comparator must actually exist and be employed by the same employer doing the same work or work of equal value.
- Under section 7 of the Employment Act, in proceedings alleging contravention of the anti-discrimination provision, the employer bears the burden of proving that the discrimination did not take place as alleged.
- A party cannot raise a new defence, such as limitation by reason of continuing injury, for the first time on appeal where it was never pleaded or canvassed before the trial court.
- Damages for discrimination should be awarded as a composite or global figure rather than as a calculation of back pay, since an award pegged to months of remuneration risks over-compensating high earners.
- An employer must supply an employee facing a disciplinary hearing with the allegations and the supporting material, such as an audit report, in sufficient time to prepare a defence; failure renders the termination procedurally unfair.
Court orders
#- 1.Appeal allowed in part
- 2.Award of Kshs. 18,256,947 in cumulative pay disparity and damages for discrimination set aside and substituted with an award of Kshs. 7,500,000
- 3.Award of Kshs. 3,489,084 for unfair termination set aside and substituted with an award of Kshs. 1,744,542 (6 months' gross pay)
- 4.Cross-appeal dismissed with costs
- 5.Each party to bear its own costs in this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Industrial Court of Kenya (Employment and Labour Relations Court) at Nairobi
- Industrial Cause No. 1813 of 2011
- Jurisdiction invoked
- First appeal under the Appellate Jurisdiction Act (Court of Appeal appellate jurisdiction over the Industrial Court award, order and decree)
Relief refused
#Cross-appeal relief: costs and interest on the trial judgment
Award of costs is discretionary and no basis shown for interfering with the trial judge's exercise of that discretion
Cross-appeal relief: pension and accrued service pay
Not available to the respondent; he was a member of a pension scheme where the appellant contributed 7.5% of basic salary
Cross-appeal relief: tabulation of leave and 12 months' compensation at the comparator's current salary and correction of alleged error on the face of the record
Untenable once damages for discrimination were pegged on a composite figure
Costs
The cross appeal is dismissed with costs. Each party to bear its own costs in this appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In conclusion, the appeal partially succeeds. We set aside the award of Kshs. 18,256,947 in cumulative pay disparity and damages for discrimination as well as Kshs.3,489,084/- and substitute it with an award of Kshs. 7,500,000/- and Kshs. 1,744,542/- respectively.
The cross appeal is dismissed with costs. Each party to bear its own costs in this appeal.
Taken as a whole the evidence adduced in this case leads to a reasonable conclusion that there was discrimination against the respondent based on race.
A composite or global figure of damages is appropriate to award for discrimination as opposed to calculation on the back pay adopted by the learned Judge.
The appellant cannot be allowed to hang on a defence that it never raised and prosecuted in the High Court in this present appeal.
In the circumstances, therefore it cannot be said that the termination process was fair.
Issues in the judgment
#The judgment uses inconsistent figures for the discrimination award: Kshs. 18,265,947 and Kshs. 18,256,947 appear interchangeably, and the cross-appeal discussion refers to both Kshs. 18,560,947 and Kshs. 18,650,947, which do not match either figure.
The names of the two employees who admitted the fraud are given inconsistently as Charles Kimani/Peter Thuku and Charles Kimathi/Peter Thika.
The judgment variously refers to the trial court as 'the High Court' and as the Industrial Court/Employment and Labour Relations Court in describing the appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (15)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kinda v Aiducation International (K) & another (Civil Appeal E047 of 2022) [2026] KECA 350 (KLR)[2026] KECA 350 (KLR)27 Feb 2026applied
- G4s Security Services (K) Ltd v Ongori (Civil Appeal E127 of 2022) [2025] KECA 1950 (KLR)[2025] KECA 1950 (KLR)21 Nov 2025applied
- Ongugo v Mombasa Parents Club (Cause E122 of 2024) [2025] KEELRC 2968 (KLR)[2025] KEELRC 2968 (KLR)30 Oct 2025applied
- Ochieng v G4S Kenya Limited (Appeal E068 of 2024) [2025] KEELRC 2747 (KLR)[2025] KEELRC 2747 (KLR)8 Oct 2025
- Kenya Petroleum Oil Workers Union v Owi (Appeal E069 of 2025) [2025] KEELRC 2563 (KLR)[2025] KEELRC 2563 (KLR)18 Sept 2025applied
- Mbeka v Kenya Power & Lighting Co. Ltd (Cause E008 of 2025) [2025] KEELRC 2283 (KLR)[2025] KEELRC 2283 (KLR)31 Jul 2025applied
- Nyongesa v Maseno University (Cause E006 of 2025) [2025] KEELRC 2246 (KLR)[2025] KEELRC 2246 (KLR)29 Jul 2025applied
- Harley Street Fertility Centre Kenya Limited v Sila (Cause E711 of 2023) [2025] KEELRC 1619 (KLR)[2025] KEELRC 1619 (KLR)30 May 2025
- Kenyatta University v Thomas & 25 others (Civil Appeal E494 of 2022) [2025] KECA 1014 (KLR)[2025] KECA 1014 (KLR)30 May 2025
- Wambui v Standard Chartered Bank of Kenya Limited (Employment and Labour Relations Cause 383 of 2019) [2025] KEELRC 1495 (KLR)[2025] KEELRC 1495 (KLR)23 May 2025
- Makori v Independent Medico-Legal Unit (Cause E028 of 2023) [2025] KEELRC 820 (KLR)[2025] KEELRC 820 (KLR)7 Mar 2025
- Ashton Mombasa Apparel (EPZ) Limited v Tailors and Textile Workers Union (Cause E014 of 2024) [2025] KEELRC 444 (KLR)[2025] KEELRC 444 (KLR)20 Feb 2025applied
- Omar t/a Meat Magic Enterprises v Kalu (Appeal E088 of 2024) [2025] KEELRC 325 (KLR)[2025] KEELRC 325 (KLR)6 Feb 2025applied
- Kitui Flour Mills Limited v Mbai (Appeal E172 of 2024) [2025] KEELRC 177 (KLR)[2025] KEELRC 177 (KLR)30 Jan 2025applied
- Nguli v Southern Sky Safaris Limited & another (Cause E091 of 2023) [2025] KEELRC 50 (KLR)[2025] KEELRC 50 (KLR)23 Jan 2025applied
Cite this brief
#Cite this brief
Caselaw, "Ol Pejeta Ranching Ltd v Muhoro (Civil Appeal 42 of 2015) [2017] KECA 329 (KLR)", Case Analysis (2017). Civil Appeal No. 42 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/329/eng@2017-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.