Merwe v Technomed Limited (Employment and Labour Relations Cause E1029 of 2023) [2025] KEELRC 1910 (KLR)
The bottom line
#A Kenyan court awarded a dismissed executive over Kshs 12.9 million because his employer could not prove the misconduct allegations behind his termination.
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 has proved that there was a justifiable reason to terminate the employment of the Claimant
- 2.Was the Claimant accorded procedural fairness prior to being terminated from the Respondent's employment?
- 3.Is the Claimant entitled to the reliefs sought in ELRC Cause No. E1029 of 2023?
- 4.Whether the Respondent's claim against the Claimant in ELRC Cause No. E1028 of 2023 has merit hence entitling the Respondent to the reliefs sought?
Key legal issues
#Justifiable reason for termination
The Respondent failed to discharge its evidential burden; no evidence supported the allegations of gross misconduct and breach of fiduciary duty, hence the termination was substantively unfair.
The termination letter cited excessive salaries, selling at a loss, employing the daughter without a permit, the wife's management role, closing a bank account and paying suppliers without contracts. The Respondent led no documentary or oral evidence to substantiate any of these allegations, for instance no contract of employment set against payslips. Allegations unsupported by evidence cannot found a valid termination under Sections 43(1) and 45(2) of the Employment Act.
Procedural fairness
The process was procedurally fair; the Claimant received a show-cause notice, responded through advocates, and attended an online disciplinary hearing.
Section 41(1) requires notification of allegations and an opportunity to make representations. The Claimant admitted receiving the Notice to Show Cause, responding through advocates on 5th October 2023, and participating in an online hearing on 25th October 2023. His claim that the hearing was a sham because of an August 2023 resignation-acceptance email failed because the email was never exhibited in evidence.
Claimant's entitlements after unfair termination
The Claimant was awarded one month's notice pay, four months' compensatory damages under Section 49(1)(c), service pay, and 17 days' leave pay.
Having found substantive unfairness, the Court applied Section 49(1)(c) and, factoring in the length of service and the Claimant's shareholding, capped compensatory damages at four months' salary. Service pay was awarded absent proof of Section 35(6) exclusions, and leave pay awarded because the employer produced no leave records as required under Section 74(1)(f).
Respondent's claim for return of company assets
The Respondent's claim succeeded; the Claimant admitted still holding the motor vehicle and other company assets and was ordered to return them within 14 days.
The logbook showed Technomed Limited as registered owner of motor vehicle KBV 599M, and the Claimant admitted in cross-examination that the vehicle and other assets remained in his possession. With no evidence of any entitlement to retain them post-termination, the Court ordered return of the vehicle and the assets particularized in the inventory annexed to the Respondent's statement of claim.
Legal principles established
#- An employer bears the burden of proving the reasons for termination under Sections 43(1) and 45(2)(a) and (b) of the Employment Act, and failure to adduce evidence in support of the allegations means the termination is substantively unfair.
- Procedural fairness under Section 41(1) is satisfied where the employee is notified of the allegations through a show-cause letter and afforded an opportunity to respond at a disciplinary hearing.
- An employer who fails to produce leave records, which it is required to maintain under Section 74(1)(f) of the Employment Act, cannot controvert an employee's claim for accrued leave days.
Court orders
#- 1.A declaration that the termination of the Claimant from employment was substantively unfair
- 2.One month's salary in lieu of notice of Kshs 1,605,198.00
- 3.Compensatory damages of Kshs 6,420,792.00 (four months' salary)
- 4.Service pay at 15 days salary per year of service of Kshs 4,012,995.00
- 5.Kshs 909,612.20 for 17 accrued leave days
- 6.Total award of Kshs 12,948,597.20 with interest at court rates from the date of judgment until payment in full
- 7.Certificate of Service to be issued within 30 days of the judgment
- 8.In ELRC Cause No. E1028 of 2023, the Claimant to hand over possession of motor vehicle KBV 599M and other company assets within 14 days of the judgment
- 9.Each party to bear their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Section 43, 45, 41, 49 applied)
- Consolidated with
- ELRC Cause No. E1028 of 2023
Relief refused
#12 months' salary as damages for unprocedural/unfair termination
Court awarded compensatory damages equivalent to only four months' salary, considering length of employment and the Claimant's shareholder status
Transfer of motor vehicle registration number KBV 599M to the Claimant's sole name as compensation
The vehicle is registered in the Respondent's name and the Claimant was not entitled to retain possession post-termination; the Court ordered its return instead
Costs
In view of the fact that both matters have succeeded, each party shall 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.
In sum, the Court finds that the Respondent has failed to discharge its evidential burden under Sections 43[1] read together with Section 45[2] [a] and [b] of the Employment Act by proving that it had a fair and valid ground to terminate the employment of the Claimant based on his conduct. There was therefore no justifiable cause to warrant termination of the Claimant’s employment.
A declaration that the termination of the Claimant from employment was substantively unfair.
The total award is Kshs 12,948,597.20.
The Claimant shall within 14 days from the date of this judgment, hand over possession of motor vehicle registration number KBV 599M to the Respondent, together with other assets that are in his possession belonging to the Respondent as better particularized in the inventory annexed to the Respondent’s statement of Claim and exhibited before Court.
In view of the fact that both matters have succeeded, the Court will be inclined to order that each party bears their own costs.
Issues in the judgment
#The heading of the section on the Claimant's reliefs is labelled 'Reliefs under ELRC Cause No. E1029 of 2023' but earlier paragraphs state the Claimant's claim is Cause No. E1029 of 2023 and the Respondent's claim is E1028 of 2023, while the Respondent's Statement of Claim is described in places as being 'in ELRC Cause No. E1028 of 2023' with the parties' role labels used interchangeably.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Merwe v Technomed Limited (Employment and Labour Relations Cause E1029 of 2023) [2025] KEELRC 1910 (KLR)", Case Analysis (2025). ELRC Cause No. E1029 of 2023 (consolidated with ELRC Cause No. E1028 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1910/eng@2025-06-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.