Kenya Power and Lighting Company Limited v Lydia Chepkosgei Mutai [2019] KECA 753 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that reinstating an employee after a disciplinary hearing blocks the employer from later firing over the same allegations.
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 trial judge erred in evaluating the evidence on record thereby arriving at a wrong conclusion that the reasons for termination were non-existent
- 2.Whether the trial judge erred in law in awarding the maximum compensation of 12 months' salary as damages for unfair termination under Section 49 of the Employment Act
Key legal issues
#Whether there was a valid reason for termination of the respondent's employment
The lifting of the respondent's suspension after the disciplinary hearing of 25 March 2013 signified that the allegations had been settled; the appellant had no new or sufficient reason for termination, and the termination was unfair.
The allegation of misappropriation of Ksh. 14,221,877.30 was the subject matter of the disciplinary proceedings of 25 March 2013. The suspension was lifted on 28 March 2013. A reasonable person would infer the explanation given was satisfactory. Reverting to the same allegations in May 2013 without anything new furnished no valid reason, contrary to section 43 of the Employment Act, and the trial judge did not err in finding the termination unfair.
Whether the maximum award of 12 months' salary as damages for unfair termination was justified
The trial judge gave no reasons justifying the maximum award under section 49(1)(c); the Court of Appeal set it aside and substituted an award of 6 months' salary.
Guided by CMC Aviation and Ol Pejeta Ranching, an award of maximum compensation must be justified by reference to section 49(4) factors and sound judicial principles; it should not be capricious or whimsical. The learned judge did nothing to justify the 12 months' award. Applying the settled principles for interfering with quantum, the Court found intervention warranted and substituted 6 months' salary.
Whether a claimant can claim salary until retirement age following termination
No damages are awardable for unlawful termination before retirement age; employment is contractual and terminable under its terms, and employees must mitigate.
Relying on Kenya Ports Authority v Edward Otieno, Kenya Ports Authority v Silas Obengele, Kenya Revenue Authority v Menginya Salim Murgani and EACC v Nicholas Mwenda Mtwaruchiu, the Court confirmed that an expectation of employment until retirement has no basis in law, and under section 49(1) employees are expected to mitigate losses rather than anticipate remuneration until retirement.
Legal principles established
#- Where an employee's suspension is lifted following a disciplinary hearing, a reasonable person would infer that the allegations leading to suspension were considered and the explanation satisfactory; the employer cannot then rely on the same allegations to terminate employment without a new or sufficient reason.
- A trial court awarding the maximum 12 months' compensation under section 49(1)(c) of the Employment Act must justify the maximum award with reasons guided by section 49(4); an unexplained maximum award invites appellate intervention.
- No damages are awardable for unlawful termination of contract before the age of retirement; employees must mitigate losses and cannot expect compensation in the form of salary until retirement age.
Court orders
#- 1.Set aside the award of 12 months' salary as damages for unfair termination
- 2.Substitute in its place an award of six months' salary as damages, being Ksh. 6 x 94,160 = 564,960 less statutory deductions
- 3.Affirm and uphold all other orders of the trial court
- 4.Each party to bear its/her own costs in the 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 Kisumu
- Industrial Cause Case No. 312 of 2013
- Jurisdiction invoked
- First appeal to the Court of Appeal from the Employment and Labour Relations Court
Relief refused
#Appellant's counterclaim for Ksh. 356,242
The appellant did not lead any evidence to prove the counterclaim
Costs
As the appeal is partially successful, each party is to bear its/her own costs in the 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.
We find the lifting of the respondent's suspension by the appellant was an intimation that the allegations of misappropriation and reallocation of the sum of Ksh. 14,221,877/30 had been settled.
The learned judge did nothing at all to justify the award of 12 months' salary as damages.
We vary the judgment of the trial court dated 12 th January 2015 by setting aside the award of 12 months' salary as damages for unfair termination and substitute in its place an award of six months' salary as damages which comes to the sum of Ksh. 6 X 94,160 = 564,960/= less statutory deductions. All other orders of the trial court are affirmed and upheld.
Issues in the judgment
#Internal inconsistency in dates: the memorandum of appeal refers to the appellant's letter of 17th May 2013 while the judgment elsewhere states the termination letter was dated 16th October 2013 and received on 17th October 2013, and the background also references a termination letter dated 16th May 2013.
The trial court's quoted ruling contains an apparent typographical date '28 th March 201'.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Radar Hardware Limited v Mutune (Appeal E010 of 2025) [2025] KEELRC 2311 (KLR)[2025] KEELRC 2311 (KLR)31 Jul 2025applied
Cite this brief
#Cite this brief
Caselaw, "Kenya Power and Lighting Company Limited v Lydia Chepkosgei Mutai [2019] KECA 753 (KLR)", Case Analysis (2019). Civil Appeal No. 30 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/753/eng@2019-05-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.