Simokaitis & another v Chula (Appeal E118 of 2025) [2025] KEELRC 2969 (KLR)
The bottom line
#Even when an employee commits gross misconduct, Kenyan employers must still follow due process before dismissal—or risk an unfair termination finding.
What this practically means
#Executive summary
#Key legal issues
#Fairness of termination despite substantive justification
The termination was unlawful and unfair because due process under section 41(2) was not followed and no recorded admission of guilt was proved
Although falsification of records constitutes gross misconduct justifying summary dismissal under section 44(3) and 44(4)(g), the employer must still accord the employee notice and a disciplinary hearing under section 41(2). The alleged letter of admission was not filed and there was no record of any admission of guilt. Without proof of adherence to due process, the termination was unlawful and unfair.
Quantum of compensation for unfair termination
Zero compensation awarded despite unfair termination, given the respondent's gross misconduct and criminal conduct
Section 45(5) requires consideration of the employee's conduct and culpability. The respondent had been issued two warnings, did not deny falsifying the VCT certificate and other records, and was charged in a criminal case arising from his employment. Awarding maximum compensation would reward gross misconduct, following Mbogo-Omollo and Lele v Mwaura.
Counterclaim for fraudulently obtained funds
Counterclaim allowed; quantified loss of Ksh. 60,743 deductible from terminal dues under section 19(1)(b) and (d)
The trial court had failed entirely to address the counterclaim, denying the appellants a fair hearing. The pleaded losses - false registration fees, HIV/AIDS kits, Pastor Christopher's salary and ghost security guard payments - arose from the respondent's wilful default and dishonesty and are recoverable as deductions under section 19(1)(b) and (d) of the Employment Act.
House allowance on a consolidated wage
Claim for house allowance fails where the written contract provided a consolidated wage above the minimum wage
The respondent was engaged under a written contract dated 16 February 2012 on a consolidated wage of Ksh. 44,500, admitted by the appellants and supported by payment vouchers. Since the wage was above the minimum wage and consolidated, a separate claim for house allowance amounted to unjust enrichment.
Costs in employment disputes
Costs do not follow the cause in employment disputes; each party to bear its own costs
Section 12(4) of the Employment and Labour Relations Court Act governs costs in employment claims. Unlike commercial disputes, costs should be awarded sparingly once terminal dues are assessed and applied, with reasons where necessary. On this basis the court directed each party to bear its own costs.
Legal principles established
#- Even where an employer has substantive justification for summary dismissal, due process under section 41(2) of the Employment Act is mandatory
- An admission of wrongdoing may be recorded and applied in place of the mandatory procedures under section 41(2)
- An employee's culpable conduct must be considered under section 45(5) when assessing compensation; tainted work record can reduce compensation to nil
- Costs in employment claims do not follow the cause and should be awarded sparingly with reasons
- Quantified loss from an employee's wilful default or dishonesty is deductible from terminal dues under section 19(1)(b) and (d) of the Employment Act
Court orders
#- 1.Declaration that the employment of the respondent was terminated unfairly
- 2.Compensation zero (0)
- 3.Notice pay Ksh. 44,500
- 4.Pay for 7 days in March 2017, Ksh. 10,383.30
- 5.The counterclaim is allowed at Ksh. 60,743
- 6.The awards shall be offset accordingly
- 7.Each party to bear its costs
- On appeal from
- Magistrates' Court (ELRC), Mombasa
- CMELRC No. 1083 of 2019
- Jurisdiction invoked
- First appeal from the trial magistrate's court in employment and labour relations matter
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Simokaitis & another v Chula (Appeal E118 of 2025) [2025] KEELRC 2969 (KLR)", Case Analysis (2025). Mombasa ELRC Appeal from CMELRC No. 1083 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2969/eng@2025-10-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.