Goodlife Pharmacy Limited v Odhiambo (Appeal E069 of 2024) [2025] KEELRC 1423 (KLR)
The bottom line
#A Kenyan court upheld unfair termination damages against Goodlife Pharmacy but allowed the employer to keep Kshs. 97,464 in stock-loss deductions.
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 Magistrate erred in finding that the Respondent's termination was unlawful, irregular and unprocedural
- 2.Whether the Appellant issued a show cause letter and conducted a fair disciplinary process before surcharging and terminating the Respondent
- 3.Whether the salary deductions (surcharges) imposed on the Respondent for stock losses were lawful under section 19 of the Employment Act
- 4.Whether the awards of damages for unlawful termination and payment of wages were justified
Key legal issues
#Lawfulness of salary deductions for stock losses
The surcharge deductions of Kshs. 97,464/- were lawful and properly deducted; the Magistrate's order for refund was reversed.
The Court accepted the employer's right to recover losses occasioned by an employee's wilful default under section 19 of the Employment Act. It found the deductions consistent with statutory permission and company policy, and therefore reversed the Magistrate's contrary finding on the surcharge refund.
Procedural and substantive fairness of the termination
The termination was unfair as the Appellant did not accord the Respondent the benefit of section 41 of the Employment Act.
The Court found no evidence that a disciplinary hearing was conducted or that procedural and substantive fairness were met. It accordingly upheld the Magistrate's award of damages for unlawful termination and payment of wages for work done, and the finding that notice was already paid.
Standard of review on first appeal
The Court adopted the Selle principles: reconsider and evaluate the evidence and draw its own conclusions while making due allowance for not having seen or heard the witnesses.
The Court framed its appellate task by reference to Selle & another v Associated Motor Boat Co. Ltd, being a first appellate court obliged to re-evaluate the evidence afresh while according deference to the trial court's advantage of observing witnesses.
Legal principles established
#- An employer may deduct from wages an amount equal to loss of property lawfully in its custody occasioned by the wilful default of the employee under section 19 of the Employment Act.
- Termination without evidence of a hearing under section 41 of the Employment Act is procedurally unfair.
Court orders
#- 1.The decision of the Learned Magistrate is upheld save for the reversal of the refund of the surcharge of Kshs. 97,464/-
- 2.The finding that the sum of Kshs. 97,464/- deducted was properly so deducted (reversal of the Magistrate's finding on this score)
- 3.Each party on the appeal to bear their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Chief Magistrates Court
- Not stated in the judgment
- Jurisdiction invoked
- Appeal from the Chief Magistrates Court pursuant to statutory appeal provisions (not expressly cited in the judgment)
Relief refused
#Setting aside of the Magistrate's judgment in its entirety and costs of the appeal
The Court upheld the Magistrate's findings on unfair termination and damages, with only the surcharge finding reversed; the Appellant was only partly successful to a very limited extent
Costs
Each party before this Court on appeal to bear their own costs
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.
it is my finding that the sum of Kshs. 97,464/- deducted was properly so deducted. I would reverse the finding of the Magistrate on this score.
No evidence was adduced that there was a hearing, there was no evidence that procedural and substantive fairness were meted out.
In the final analysis, the Court upholds the decision of the Learned Magistrate save for the reversal of the surcharge of Kshs. 97,464/-.
As the Appellant has been partly successful to a very limited extent, the parties before this Court on appeal will bear their own costs.
Issues in the judgment
#Ground of appeal states the Magistrate awarded damages of Kshs. 720,000/- while the judgment records the award as Kshs. 360,000/-
The Appellant's submissions inconsistently refer to salary deductions of Kshs. 94,464/- and Kshs. 97,464/-
Grounds of appeal reference a claim for two months' salary of Kshs. 120,000/- said to have been awarded, but no such award appears in the recorded judgment of the Magistrate
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Goodlife Pharmacy Limited v Odhiambo (Appeal E069 of 2024) [2025] KEELRC 1423 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1423/eng@2025-05-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.