Agricultural Finance Corporation v Jillo (Civil Appeal E002 of 2023) [2025] KECA 2068 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed employers must produce minutes of disciplinary hearings to prove fair termination, or pay damages.
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 respondent's termination was unfair and unlawful
- 2.Whether the respondent was entitled to the nominal damages awarded
Key legal issues
#Whether the termination was procedurally fair under section 41(1) of the Employment Act
The termination was unfair because the appellant failed to produce minutes of the disciplinary hearing to prove compliance with section 41(1).
The burden of proving that a termination is lawful rests on the employer under section 43(1) of the Employment Act. Since a disciplinary hearing was held on 29th July 2016, the only credible way to demonstrate that the employee was explained the charges, allowed a companion, allowed to cross-examine and to respond, was production of the minutes. The appellant's Human Resource Officer admitted the minutes were not filed. Without them, the court could not find procedural fairness, and prior decisions of this Court on the necessity of minutes were applied.
Whether the award of nominal damages was justified and correctly quantified
The nominal damages award of one month's salary (Kshs.150,750) was upheld as neither excessive nor founded on wrong principles.
Nominal damages vindicate an infraction of a legal right even without proof of substantial loss. The respondent suffered a violation of his right to a fair hearing, aggravated by the five months taken to conclude the disciplinary process, contrary to the right under Article 50(2)(e) to have proceedings begin and conclude without unreasonable delay. No plausible explanation for the delay was given. Though the harm was unquantified, the right required vindication and the conventional one-month salary figure was appropriate.
The mandate of a first appellate court
The Court, as a first appellate court, must re-appraise and re-analyse the evidence and draw inferences of fact, while making allowance for not having seen or heard the witnesses.
Rule 31(1)(a) of the Court of Appeal Rules, 2022 obliges the Court to re-appraise and re-analyse the evidence on an appeal from a superior court exercising original jurisdiction. Interference with findings of fact is permitted only where findings rest on no evidence, misapprehension of evidence, or wrong principles. On this record, the learned Judge's findings that the termination was procedurally unfair could not be faulted.
Whether the appellant was liable for the shortfall in payment in lieu of notice
The appellant was liable for the remaining one month's salary in lieu of notice, having paid two months instead of the three agreed under clause 7 of the contract, but no order was made.
Clause 7 of the Employment Contract required three months' notice or payment of three months' basic salary in lieu. The appellant paid only two months. The Court noted the liability but, as the issue was framed in the grounds of appeal, it declined to make any order in respect of it.
Legal principles established
#- An employer bears the burden of proving that a termination was lawful and procedurally fair, and the best evidence of compliance with section 41(1) of the Employment Act is the minutes of the disciplinary hearing; failure to produce them renders the termination unfair.
- A Disciplinary Committee is expected to record its proceedings for evidential purposes because the disciplinary procedure is prone to exposure to litigation.
- A proper disciplinary hearing requires that the employee be informed of the charges, witnesses examined in the employee's presence, the employee given an opportunity to cross-examine and to tender a defence, and findings recorded with reasons.
- A first appellate court will not interfere with a finding of fact unless it is based on no evidence, on a misapprehension of evidence, or the trial judge acted on wrong principles.
- An employee whose right to a fair hearing was violated by unreasonable delay in the disciplinary process is entitled to vindication through compensation notwithstanding lack of proof of the extent of harm.
Court orders
#- 1.The appeal is dismissed with costs to the respondent
- 2.The judgment and decree of Manani, J. in the ELRC is upheld
- 3.The award of nominal damages of Kshs.150,750 (one month's salary) is upheld
- 4.No order made in respect of the shortfall in payment in lieu of notice (one month's salary), though the appellant was held liable
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment and Labour Relations Court, Malindi
- ELRC Case No. 13 of 2019 (referred to in the disposition as Malindi ELRC No. E002 of 2023)
- Jurisdiction invoked
- First appeal from the superior court exercising original jurisdiction, under rule 31(1)(a) of the Court of Appeal Rules, 2022
Relief refused
#Reversal of the ELRC judgment and a declaration that the termination was proper and lawful
Failure to produce minutes of the disciplinary hearing meant the appellant could not prove procedural fairness under section 41(1) of the Employment Act
Setting aside the award of nominal damages
The award was not excessive; the delay from 30th May 2016 to 31st October 2016 breached the right to a fair hearing without unreasonable delay
Costs
The appeal was dismissed with costs to the respondent.
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.
Consequently, we find and hold that the appeal is devoid of merit and is hereby dismissed with costs to the respondent. Orders accordingly.
In the end, we uphold the judgement and decree of Manani, J. in Malindi ELRC No. E002 of 2023 delivered on 25th November 2021.
Consequently, failure to show by way of the minutes or other report that the respondent was accorded a fair hearing in the disciplinary proceedings ultimately rendered his termination unfair.
It is trite that the burden of proof that the termination was lawful rests with the employer in terms of section 43(1) of the Act
The right to a fair hearing under Article 50(2) (e) of the Constitution includes the right to have the trial begin and conclude without unreasonable delay.
a first appellate court will not interfere with a finding of fact unless it is based on no evidence or on a misapprehension of evidence, or it is demonstrated that the trial Judge acted on wrong principles in making the impugned findings.
Issues in the judgment
#The lower court case number is given inconsistently: the opening paragraph describes the appeal from 'ELRC Case No. 13 of 2019', but the disposition refers to 'Malindi ELRC No. E002 of 2023'.
The judgment at paragraph 20 is dated 2025 (submissions dated February 2025) yet the judgment below is dated 25th November 2021, and the opening paragraph refers to a Memorandum of Claim dated 15th November 2019 in Case No. 13 of 2019 - internally consistent on dates, but the disposition's 'E002 of 2023' number conflicts with the 2021 judgment date for a case numbered 2023.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Agricultural Finance Corporation v Jillo (Civil Appeal E002 of 2023) [2025] KECA 2068 (KLR)", Case Analysis (2025). Court of Appeal at Mombasa (appeal from Malindi ELRC Case No. 13 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/2068/eng@2025-12-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.