Charles Nelson Mugo v Wells Fargo Limited

(b) the judgment of the lower court be set aside in its entirety. (c) the Court do find and declare that the Claimant's termination was unlawful, unfair, and amounted to premature retirement. (d) an order for the Respondent to compensate the Appellant with damages for wrongful termination at the equivalent of 24 months gross salary being Kshs. 1,139,856.00. (e) costs in both Lower and High Court. 2. The Appeal was based on the grounds: i. THAT the Learned trial magistrate erred in law and in fact by upholding Regulation the 17(2) Respondent's of the reliance Regulation of on Wages (Protective Security Services) Order, 1998, which is repealed, and was therefore no longer in force at the time of termination. ii. The Learned trial magistrate erred in Jaw by failing to consider that the Claimant's contract of employment did not provide for a retirement age of 55 years, and that in the absence of a contractual term to the contrary, the statutory retirement age of 60 years applied. iii. The Learned magistrate misdirected herself in law by relying on the case of Kenya Hotels and Allied Workers Union vs Panari Hotel (2024) eKLR, which was distinguishable on its facts and did not apply to a case iv. involving a driver Protective Security who is not covered Services The Learned magistrate that the Claimant's by the Order. erred by failing to find termination amounted to JUDGMENT APPEAL NO. E254 OF 2025 2

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premature and v. unlawful retirement, which violated his legitimate expectation retirement age of 60 years. The Learned principle to magistrate work failed of fair labour practices the Constitution Act, by endorsing until the lawful to uphold the under article 41 of and Section 45 of the Employment a termination that was procedurally and substantively unfair. 3. The brief facts of the case were that the Appellant herein filed a suit against the Respondent claiming that he had been unlawfully and unfairly retired from employment, seeking compensation for wrongful termination in the sum of Kshs. 1,139,856/=. 4. It was the Appellant's case that he was employed by the Respondent as a driver and was unlawfully retired at the age of 58 years despite his contract of employment not providing for a retirement age of 55 years. The Respondent on the other hand maintained that the Appellant's retirement was lawful as it was carried out in accordance with Regulation 17(2)(b) of the Regulation of Wages (Protective Security Services) Order, 1998. 5. After considering the respective cases and submissions by counsel, the learned trial magistrate dismissed the claim JUDGMENT APPEAL NO. E254 OF 2025 3

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against the Appellant with costs. Feeling aggrieved by the decision of the trail court, the appellant mounted the present appeal. 6. The Appeal was disposed of by written submissions and both parties filed their respective submissions. APPELLANT’S SUBMISSIONS 7. The Appellant’s Advocates Kulecho & Co. Advocates filed written submissions dated 24th November, 2025 and on the issue of whether the learned Magistrate erred in relying on Regulation 17(2) of the Regulation of Wages (Protective Security Services) Order, 1998, counsel submitted that the learned Magistrate erred in relying on a regulation which had been repealed. 8. Counsel submitted that the Appellant was employed by the Respondent as a driver in July 2012 and served for 11 years before he was issued with a retirement notice on the ground that he had attained the age of 58 years. It was submitted that the Appellant protested the decision, maintaining that the retirement age in Kenya is 60 years and that his contract of JUDGMENT APPEAL NO. E254 OF 2025 4

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employment did not provide for retirement at the age of 55 years. Counsel argued that instead of addressing his concerns, the Respondent directed him to proceed on compulsory leave before retiring him without being afforded an opportunity to challenge the decision. It was Counsel’s belief that the Respondent could not rely on a repealed regulation to justify the retirement and that the learned Magistrate erred in upholding that position. 9. On the issue of whether the learned Magistrate erred in finding that the Appellant's retirement age was 55 years, counsel submitted that the Appellant's contract of employment did not contain a retirement clause and the Respondent failed to produce any policy or document showing that the retirement age was 55 years. Counsel pointed out that the Respondent's witness admitted during cross-examination that no such document was available. Consequently, in the absence of such a provision, the applicable retirement age was 60 years. 10. It was Counsel’s submission that the learned Magistrate erred in relying on the case of Kenya Hotels and Allied Workers Union v Panari Hotel, as the decision concerned JUDGMENT APPEAL NO. E254 OF 2025 5

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security guards whose terms were governed by the Protective Security Services Order, whereas the Appellant was employed as a driver and his employment was governed by the Employment Act and his contract of employment. 11. On the issue of whether the Appellant's retirement was premature, unlawful and violated his legitimate expectation, counsel submitted that the Appellant had served the Respondent for eleven years without ever being informed that he would retire at the age of 55 years. It was argued that if the Respondent had such a retirement policy, it ought to have been applied consistently. Counsel submitted that by allowing the Appellant to continue working beyond the age of 55 years, the Respondent created a legitimate expectation that he would continue serving until the age of 60 years. Consequently, it was counsel’s argument that the learned Magistrate failed to consider this legitimate expectation. 12. Counsel further submitted that the Appellant's retirement was both substantively and procedurally unfair. He argued that the Respondent had no valid reason for retiring the Appellant as the decision was based on a repealed regulation and an JUDGMENT APPEAL NO. E254 OF 2025 6

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unproved retirement policy. That the Appellant was not consulted, was not issued with a notice to show cause, was not subjected to a hearing and was not afforded an opportunity to appeal the decision. It was also submitted that the Respondent's Human Resource Manager admitted that the decision was not subject to an appeal. Therefore, the retirement violated sections 43 and 45 of the Employment Act as well as the Appellant's right to fair labour practices under Article 41 of the Constitution. 13. On the issue of whether the Appellant is entitled to the reliefs sought, counsel submitted that the learned Magistrate failed to properly evaluate the evidence and consequently arrived at the wrong conclusion. Counsel urged the Court to allow the appeal, set aside the judgment of the trial court and declare the Appellant's retirement unlawful and unfair. Counsel further urged the Court to award the Appellant compensation equivalent to 24 months' salary, taking into account his 11 years of service, the reliance on what the Appellant contended was a repealed regulation, the absence of due process and the violation of his legitimate expectation. In support of the prayer JUDGMENT APPEAL NO. E254 OF 2025 7

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for compensation, counsel relied on the case of National Bank of Kenya Ltd v Hamida Ilana and Joshua Otiego Apiyo v Modern Coast Express Ltd. RESPONDENTS’ SUBMISSIONS 14. The Respondent’s Advocates Hamilton Harrison & Mathews Advocates filed written submissions dated 10 th July, 2025 and on the issue of whether the Regulation of Wages (Protective Security Services) Order, 1998 was in force at the time of the Appellant's retirement, counsel for the Respondent submitted that the Appellant’s assertion that the Order was repealed in 2007 was erroneous. Counsel argued that although the parent statute, the Regulation of Wages and Conditions of Employment Act (Cap. 229), was repealed by the Labour Institutions Act, 2007, the 1998 Order was expressly preserved under Section 63(2) of that Act and has never been repealed by any Legal Notice or Gazette Notice. Counsel further submitted that subsequent amendments to the Order, including Legal Notice No. 53 of 2003, demonstrate that it remains in force. It was argued that JUDGMENT APPEAL NO. E254 OF 2025 8

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in the absence of a new Wage Order specifically replacing it, the 1998 Order continues to apply. Reliance was placed on Musaki v Vickers Security & another and Muchiri v Security Guards Services Ltd, where the Court affirmed the continued applicability of the Order. 15. On the issue of whether the Regulation of Wages (Protective Security Services) Order, 1998 applied to the Appellant, counsel submitted that although the Appellant was employed as a driver, he was employed by a private security company whose business fell within the activities contemplated under Regulation 2 of the Order. Counsel argued that the Order applies to all employees of an undertaking engaged in protective security services regardless of their job designation. Reliance was placed on Kenya National Private Security Workers Union v Wells Fargo Limited, where the Court held that the Order applies to all employees of a security enterprise and is not limited to security guards. 16. On the issue of whether the absence of a retirement clause in the contract automatically entitled the Appellant to retire at (60) years, counsel submitted that there is no statutory JUDGMENT APPEAL NO. E254 OF 2025 9

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retirement age of sixty years in the private sector. It was argued that Regulation 17(2)(b) formed part of the Appellant's contract by operation of law and no separate contractual provision was necessary. Counsel further submitted that the Appellant had failed to identify any contractual term, statute, policy or collective bargaining agreement fixing his retirement age at sixty years. Reliance was placed on Robert Kithinji Kiugu v AAA Growers Limited, where the Court held that there is no mandatory retirement age in the private sector, and James Kabengi Mugo v Syngenta East Africa Ltd, where the Court held that a party alleging a retirement age of sixty years must point to the legal instrument establishing that age. 17. Counsel further submitted that by virtue of Sections 48(1)(a) and (b) of the Labour Institutions Act, the conditions prescribed under an applicable Wage Order are automatically incorporated into a contract of employment where the contract is silent. Consequently, retirement age Regulation of 55 17(2)(b), years, which governed prescribes the a Appellant's employment. Counsel noted that the Appellant was 58 years JUDGMENT APPEAL NO. E254 OF 2025 10

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old when he retired and had therefore exceeded the applicable retirement age. 18. On the issue of whether the retirement was lawful and fair, counsel submitted that retirement does not require the disciplinary procedure contemplated under section 41 of the Employment Act. In any event, the Respondent issued the Appellant with a retirement notice dated 30 th June 2023 notifying him that his last working day would be 31 st July 2023, thereby giving him 31 days' notice, which exceeded the 28 days required under his contract. Reliance was placed on the case of Mwona Mwaiwe & 4 others v Hakika Transport Services Limited, where the Court held that retirement does not attract disciplinary procedures. 19. On the issue of whether the Appellant was entitled to the reliefs sought, counsel submitted that the prayers sought were without merit as the Appellant's employment lawfully came to an end through retirement. Counsel argued that the claim for 24 months' salary up to the age of 60 years was legally untenable, relying on the case of Kiptum Nyaoke v Kenya JUDGMENT APPEAL NO. E254 OF 2025 11

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Post Office Savings Bank, where the Court declined to award anticipated future earnings after termination. 20. Counsel further submitted that the Appellant was paid all his terminal dues upon retirement, including salary up to the retirement date, overtime, accrued leave, uniform refund, staff welfare savings where applicable, and gratuity for 11 completed years of service in accordance with Regulation 17(1) of the Order. That the Appellant thereafter executed a discharge certificate acknowledging receipt of his full terminal dues and confirming that no further payments were due. Counsel relied on the case of Coastal Bottlers Limited v Kimathi Mithika, where the Court held that a discharge voucher may operate as a full settlement depending on the intention of the parties. 21. Lastly, counsel submitted that even if the Court were to find the retirement unfair, compensation under the Employment Act could not exceed 12 months' salary. In any event, the Appellant had already received all his retirement benefits and any further award would amount to double compensation. Reliance was placed on the case of Mary Nyawira Karimi v JUDGMENT APPEAL NO. E254 OF 2025 12

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Pure Circle (K) Limited, where the Court held that payment of terminal dues constituted adequate compensation in the circumstances. 22. In conclusion, counsel urged the Court to find that the learned Magistrate properly evaluated the evidence, correctly applied the law and rightly concluded that the Appellant's retirement was lawful, fair and procedurally proper and urged the Court to uphold the judgment of the trial court and dismiss the appeal with costs. DETERMINATION 39. The court has considered the grounds in the Memorandum of Appeal, the Record of Appeal and submissions filed by the Appellant herein and notes that it is now settled law that the duty of the first appellate court is to re-evaluate the evidence before the subordinate court both on points of law and facts and come up with its own findings and conclusions as was held by the Court of Appeal for East Africa in Peters –vsSunday Post Limited [1958] EA 424. The appropriate standard of review established in cases of appeal can be stated in three complementary principles: JUDGMENT APPEAL NO. E254 OF 2025 13

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i. First, on first appeal, the Court is under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions; ii. In reconsidering and re-evaluating the evidence, the first appellate court must bear in mind and give due allowance to the fact that the trial court had the advantage of seeing and hearing the witnesses testify before her; and iii. It is not open to the first appellate court to review the findings of a trial court simply because it would have reached different results if it were hearing the matter for the first time. 40. In this case, there is no dispute that the Appellant was employed by the Respondent as a driver and that at the time of his retirement he was 58 years old. It is also not disputed that by a letter dated 30th June 2023 which letter was received by the Appellant, the Respondent notified the Appellant that he had attained the retirement age and that his last working day would be 31st July 2023. It was also not disputed that upon retirement, the Appellant was paid his terminal dues, including gratuity for 11 completed years of service, and received a net payment of Kshs. 173,248.00. 41. The issues for determination can therefore be summarized as follows: - JUDGMENT APPEAL NO. E254 OF 2025 14

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i. Whether the regulation of wages (Protective Security Services) Order 1998, applied to the Appellant ii. Whether the termination of the Claimant’s employment was unfair and unlawful iii. Whether the trial court erred by not awarding the Appellant the reliefs he sought. Whether the regulation of wages (Protective Security Services) Order 1998, applied to the Appellant. 42. The appeal turns, in part, on whether the Regulation of Wages (Protective Security Services) Order, 1998 remained in force and whether the Appellant's employment was governed by its provisions. The Appellant's case is that the learned Magistrate erred in relying on Regulation 17(2)(b) of the Regulation of Wages (Protective Security Services) Order, 1998 on the ground that the Order had been repealed and could not therefore form the basis of his retirement. The Respondent, on the other hand, maintained that the Order remains in force and that the Appellant, though employed as a driver, fell within its scope. 43. I have considered the rival arguments and the applicable law. I find the reasoning of the Court in Robert Kithinji Kiugu JUDGMENT APPEAL NO. E254 OF 2025 15

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v AAA Growers Limited [2019] KEELRC 1396 (KLR) persuasive. The court facing a similar argument held as follows; “Although the Labour Institutions Act was indeed repealed in 2007, Regulation 17(2)(b) is saved by Section 24 of the Interpretation and General Provisions Act which provides as follows:“when an Act or part of an Act is repealed, subsidiary legislation issued under or made in virtue thereof shall, unless a contrary intention appears, remain in force, so far as it is not inconsistent with the repealing Act, until it has been revoked or repealed by subsidiary legislation issued or made under the provisions of the repealing Act, and shall be deemed for all purposes to have been made thereunder”. 39. Having so found, I now turn to whether the Order applied to the Appellant. Section 2 of the Regulation of wages (Protective Security Services) Order, 1998 identifies the employees to whom the Order applies in the following terms: “This Order shall apply to all persons employed directly or indirectly by an undertaking or part of an undertaking which is involved in the carrying on of any of the following activitiesa) private investigations or security consultancy, b) guarding of industrial plants, banks, warehouses, shops, private homes or any other property or establishment against theft, illegal entry or fire; and c) escort of money or other valuable property. (Emphasis added). JUDGMENT APPEAL NO. E254 OF 2025 16

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40. The question therefore is whether, the Appellant being employed as a driver was then excluded from the application of the Regulation of Wages (Protective Security Services) Order, 1998. I do not think so. I find the reasoning of the Court in Kenya National Private Security Workers Union v Wells Fargo Limited [2024] KEELRC 2050 (KLR) where the Court considered a similar argument in relation to a Cash Officer employed by a private security company and held as follows: “No doubt the regulation of wages (Protective Security Services) Order, 1998 applies to the same. …In my view, the regulations of wages order, applies to all employees of any enterprise in the form of those described in the above stated section without categorization. As a result, I hold that the order did apply to the Grievant.” 41. In the circumstances, I find that the Regulation of Wages (Protective Security Services) Order, 1998 applied to the Appellant. Whether the termination of the Appellant’s employment was unfair and unlawful JUDGMENT APPEAL NO. E254 OF 2025 17

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42. Under Section 45 (2) of the Employment Act, termination of an employee’s contract of employment is unfair if an employer fails to prove that: (a) The reason for the termination is valid; (b) The reason for the termination is a fair reason; (i) Related to the employee’s conduct, capacity or compatibility; or (ii) Based on the operational requirements of the employer; (iii) The employment was terminated in accordance with fair procedure. 43. Further, under sub section (4) of the said section, termination of employment shall be unfair where: (a) The termination is for one of the reasons specified in section 46; (b) It is found out that in all the circumstances of the case, the employer did not act in accordance with justice and equity in terminating the employment of the employee. Reason for the termination 44. In the present case, the reason for the Appellant's termination was on account of having attained the retirement age prescribed under Regulation 17(2)(b) of the Regulation of Wages (Protective Security Services) JUDGMENT APPEAL NO. E254 OF 2025 18

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Order, 1998. The Appellant considered this to be unfair given that his contract of employment did not provide for retirement at the age of 55 years. 45. On this, the court notes that the employment contract does not provide for a retirement clause. The contract only provided for termination as follows: “Clause 7; During your probation either party can terminate the contract by giving seven (7) days written notice or payment of seven days wages in lieu of notice. However, on successful completion pf either party shall give the other twenty eight (28) days written notice or pay one months salary in lieu of Notice.” 46. I have considered the Appellant's argument that the contract of employment did not contain a retirement clause. While that is true, the Respondent chose to retire the Appellant in accordance with Regulation 17(2)(b) of the Regulation of Wages (Protective Security Services) Order, 1998. As I have already found, the Regulation remained in force and applied to the Appellant. Therefore, I find no error in the learned Magistrate's finding that the Respondent had a valid and fair reason for retiring the Appellant. I find support for this in the decision of Robert Kithinji Kiugu (Supra) where the court held as follows; JUDGMENT APPEAL NO. E254 OF 2025 19

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“Quite evidently there is no mandatory retirement age specified in statute within the private sector unlike the public sector. More often than not, the retirement age is specified in the individual contract of employment in the private sector. The Respondent in this case chose to rely on Regulation 17(2)(b) of the Regulation of Wages (Protective Security Services) Order on the normal retirement age and gave the Claimant a one month’s notice of such retirement in line with the employment contract. The Claimant was given sufficient notice of one month for the retirement. The retirement letter was issued on 31st October 2017 it was to take effect on 30 th November 2017. In my view the retirement of the Claimant’s employment by the Respondent was not wrongful, unfair and unlawful.” Procedure. 47. As to whether the Respondent followed a fair procedure in retiring the Appellant, the Appellant contended that his retirement was unfair as he was not given a hearing and was not afforded an opportunity to appeal the decision. That by allowing him to continue working until he reached 58 years, it created a legitimate expectation that he would work until he reached 60 years of age. The Respondent, on the other hand, maintained that retirement does not call for a disciplinary hearing under Section 41 of the Employment Act. That the Appellant was issued with a retirement notice dated 30 th June JUDGMENT APPEAL NO. E254 OF 2025 20

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2023 informing him that his last working day would be 31 st July 2023. The court has taken note that the same was duly signed and received by the Appellant on 1st July 2023. 48. The Court in Republic v Principal Secretary Ministry of Mining Ex-parte Airbus Helicopters Southern Africa (PTY) Ltd [2017] eKLR extensively pronounced itself on the issue of legitimate expectation citing the book of De Smith, Woolf & Jowell, “Judicial Review of Administrative Action”. 6thEdn. Of Sweet & Maxwell page 609 thus: “A legitimate expectation arises where a person responsible for taking a decision has induced in someone a reasonable expectation that he will receive or retain a benefit of advantage. It is a basic principle of fairness that legitimate expectations ought not to be thwarted. The protection of legitimate expectations is at the root of the constitutional principle of the rule of law, which requires predictability and certainty in government’s dealings with the public.” 49. Of concern as well is whether a legitimate expectation can override a statute. It is the court’s view that it cannot. I am guided by the Supreme Court in the case of Ngokonyo & 2 others v Telkom Kenya Limited (Petition E009 of 2025) [2025] KESC 75 (KLR) (11 December 2025) (Judgment) where it was held as follows; JUDGMENT APPEAL NO. E254 OF 2025 21

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“The law only protected legitimate expectations; clear statutory provisions would override any contrary expectation. The designation of employment as permanent and pensionable did not guarantee tenure until retirement age. Such contracts remained terminable, subject to the law and terms of service. Retirement in public interest constituted a form of involuntary termination of employment. The employer bore the burden of proving that it is not in the public interest to retain the employee and must ensure compliance with due process.” 50. What the Appellant had was a legitimate expectation to be issued with adequate termination notice which is a requirement under the Employment Act. The court notes that the Appellant was given 30 days' notice before the retirement took effect, which was more than the 28 days' notice provided for under his contract of employment. In my view, the notice given to the Appellant was sufficient. 51. I therefore find that the Appellant's retirement was not wrongful, unfair or unlawful. The learned Magistrate cannot therefore be faulted for finding that the Respondent complied with the law in retiring the Appellant. Whether the trial court erred by not awarding the Appellant the reliefs sought. 52. The trial court having established that the Appellant was not unlawfully terminated was justified on not awarding the JUDGMENT APPEAL NO. E254 OF 2025 22

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Appellant the reliefs sought. The trial court awarded the Appellant certificate of service which is an entitlement under section 51 of the Employment Act. 53. In the upshot the court finds and holds that the Appellant’s Appeal is without merit and the same is hereby dismissed with no orders as to costs since it is the view of the court that the appellant may have honestly Regulation believed, of albeit, wages wrongly (Protective believed Security that Services) Order, 1998 did not apply to him and the fact that he served the respondent until retirement at age 58 and was not terminated for any disciplinary infraction in the course of his employment . 54. It is so ordered. Dated at Nairobi this 22nd day of September, 2026 Delivered virtually this 22nd day of September, 2026 Abuodha Nelson Jorum Presiding Judge-Appeals Division JUDGMENT APPEAL NO. E254 OF 2025 23

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