Transchem Pharmaceuticals Appeal Crashes as Court Rules Accountant Was Unfairly Dismissed After KSh13.9 Million Audit

Transchem Pharmaceuticals has suffered a fresh legal setback after the Employment and Labour Relations Court upheld a finding that it unfairly dismissed one of its accountants, rejecting claims that she had deserted work after an internal audit uncovered millions of shillings in financial discrepancies.

In a judgement delivered on July 15, Justice D. K. Njagi Marete dismissed the company’s appeal and affirmed an earlier ruling awarding former accountant Polly Kinanu KSh381,900, together with interest, costs and a certificate of service.

At the heart of the dispute lay a deceptively simple question. Did Kinanu abandon her job, or did her employer quietly shut the door on her career without following the law?

The judge found the evidence overwhelmingly favoured the latter conclusion.

The dispute traces back to August 2022 after Transchem conducted an internal audit at its Development Branch.

KSh13.19 Million

The audit allegedly uncovered financial discrepancies amounting to KSh13.19 million, prompting management to issue Kinanu with a show-cause letter requiring her to explain the cash deficits.

According to the company, the disciplinary process had only just begun.

It argued Kinanu disappeared immediately after receiving the letter, failed to respond to the allegations and effectively terminated her own employment through desertion.

Its Managing Director maintained throughout the proceedings that Transchem never dismissed the accountant and remained willing to hear her explanation before she allegedly walked away.

Kinanu painted a sharply different picture.

She testified that shortly after receiving the show-cause letter, her branch manager instructed her to go home and await a telephone call.

The promised call never came.

Two weeks later, she returned to the office hoping to clarify her employment status and collect her August salary.

Instead, security guards allegedly blocked her from entering after receiving instructions from the company’s director.

Worse still, her August salary was first credited before later being reversed.

Those facts proved decisive.

Justice Marete observed that an employee intending to desert work would hardly return to the workplace seeking clarification before later instructing lawyers to demand her reinstatement.

“She did not disappear or abandon her post,” the judge found.

“She was sent away by the management, attempted to return and was physically barred from the premises.”

Desertion Claims

The court was equally unconvinced by the company’s reliance on the doctrine of desertion.

Drawing from earlier employment decisions, Justice Marete stressed that desertion requires clear conduct demonstrating an employee has no intention of returning.

Instead, he found Transchem produced no letters, call logs, emails or any evidence showing it attempted to contact Kinanu after sending her home.

The judgement also exposed serious procedural gaps.

Kenya’s Employment Act requires employers contemplating dismissal for misconduct to notify employees of the allegations, hear their defence and fairly conclude disciplinary proceedings before making a decision.

Here, the court found Transchem started the process but never completed it.

Issuing a show-cause letter, sending an employee home indefinitely and then remaining silent could not later be transformed into proof that the employee had deserted duty, the judge held.

KSh 381,000 Award

Beyond determining liability, the court carefully examined every monetary award granted by the lower court.

Justice Marete upheld KSh171,000 as compensation for unfair termination, KSh28,500 in notice pay, KSh28,500 being unpaid August salary and KSh153,900 for unpaid house allowance accumulated over three years. The combined award totalled KSh381,900.

The house allowance claim survived because the employer failed to prove the accountant’s salary had been consolidated to include housing benefits.

Equally, the court accepted evidence showing her August salary had been reversed while the company produced no records demonstrating the payment was ultimately honoured.

The ruling reinforces an increasingly consistent judicial approach in Kenya’s employment courts. Employers alleging desertion must demonstrate genuine efforts to trace employees before invoking that defence.

READ ALSO: Kotecha Wholesellers Ordered to Pay Ex-Manager KSh2.39 Million After Court Condemns Unfair Exit

Simply sending workers home and remaining silent rarely satisfies statutory obligations.

Consequently, the appeal was dismissed in its entirety.

Transchem was ordered to pay the award, issue Kinanu with a certificate of service within thirty days and bear the costs of the appeal, bringing another closely watched employment dispute to an expensive conclusion.

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