Nyaga v County Sacco Society Limited (Cause E006 of 2024) [2025] KEELRC 1328 (KLR)
The bottom line
#A Kenyan court upheld a Sacco manager's dismissal but still ordered her employer to pay over Kshs.1.2 million in service gratuity earned over 26 years.
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 dismissal of the claimant was unfair and unlawful
- 2.Whether the reliefs sought are merited
Key legal issues
#Whether the dismissal was substantively unfair
The dismissal was substantively fair; the claimant admitted the misconduct of delaying the opening of the Karurumo branch
The court found the claimant admitted the offence of causing the branch to open at 9.21am instead of 8.30am, in her response to the show cause letter, the statement of claim, her witness statement and submissions. The employer therefore demonstrated a valid reason under sections 43 and 45(2) of the Employment Act, and the claimant failed to discharge the burden of proving unfair termination on a balance of probability.
Whether the dismissal was procedurally unfair
Procedural fairness was satisfied; the claimant was invited to a disciplinary hearing but declined to attend
The claimant was invited to a disciplinary hearing on 5th December 2022 but chose not to attend, instead filing an application for interpretation of the earlier judgment. She obtained no order stopping the hearing and no postponement letter from the employer. Relying on the cases cited by the respondent, the court held she squandered the opportunity to defend herself and cannot accuse the employer of procedural unfairness under section 41.
Entitlement to service gratuity
The claimant is entitled to service gratuity under section 9(v) of the CBA, computed at Kshs.1,295,918 for 26 years of service
Although the dismissal was upheld, the court perused the CBA and confirmed that an employee whose services are terminated is entitled to service gratuity at the rate of 30 days' pay for every year worked. With 26 years of service and a salary of Kshs.49,843, the court computed the gratuity at Kshs.1,295,918, substituting its own calculation for the claimant's pleaded figure of Kshs.1,428,752.
Legal principles established
#- Unfair termination requires proof of absence of valid reason and/or absence of fair procedure, codified under Article 47 of the Constitution and section 45 of the Employment Act
- An employee who is afforded an opportunity to defend herself at a disciplinary hearing but squanders it cannot blame the employer for unfair termination
- An employer remains obliged to remit provident fund contributions for the suspension period even where the employee's specific claim is unsubstantiated
Court orders
#- 1.Judgment entered for the claimant against the respondent for payment of service gratuity of Kshs.1,295,918.00
- 2.Costs of the suit awarded to the claimant
- 3.Interest at court rates from the date of filing the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over unfair termination and employment benefits claims under the Employment Act, 2007
Relief refused
#Declaration that termination was substantively and procedurally unfair, unlawful and invalid
Dismissal was founded on a valid reason and a fair procedure was followed
Reinstatement or re-engagement without loss of benefits
Dismissal found lawful; relief anchored on section 49 of the Employment Act not available
Twelve months' gross salary compensation (Kshs.909,420) and three months' notice pay (Kshs.227,355)
Termination was substantively and procedurally fair under section 45 of the Employment Act
Unremitted provident fund dues of Kshs.30,223.60
Not substantiated by evidence such as a statement from the Fund Manager
Commuter, key and responsibility allowances
Claimant was on suspension from February to December 2022; any consent-based claim belongs in ELRC No. E693 of 2020
Arrears of basic salary and housing allowance (Kshs.75,699)
Claimant did not plead and prove whether the claim was founded on the appointment letter or the CBA
Relocation/transfer/disturbance allowance of Kshs.65,942.40
Lacks particulars and supporting evidence
Costs
Costs of the suit awarded to the claimant, with interest at court rates from the date of filing the suit
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, I enter judgment for the claimant against the respondent for payment of: i. Service gratuity………………………………………..Kshs.1,295,918.00 ii. Costs and interest at court rates from the date of filing the suit.
I find and hold that the claimant was afiorded an opportunity to defend herself during the scheduled disciplinary hearing but she squandered the same
the employer has demonstrated a valid reason for dismissing the claimant, and further that it followed a fair procedure as required under section 43 and 45 (2) of the Employment Act
The said twin threshold are basically about fair administrative action which is now codified under Article 47 of the Constitution and section 45 of the Employment Act
I am not satisfied the claimant proved on a balance of probability that she was a victim of unfair and unlawful dismissal by the respondent
Issues in the judgment
#The judgment inconsistently refers to the claimant's gender, using 'she/her' in some passages and 'his/he' in others
Inconsistent computation of gratuity: the court used a salary of Kshs.49,843 whereas the claimant's pleaded monthly gross salary in the compensation prayer was Kshs.74,785, with no explanation of the basis for the lower figure
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyaga v County Sacco Society Limited (Cause E006 of 2024) [2025] KEELRC 1328 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1328/eng@2025-05-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.