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Court of AppealDismissedCivil Appeal No. 167 of 2014· [2017] KECA 768 (KLR)

Moses Kiplagat Changwony v Tana & Athi River Development Authority

Court of Appeal
24 February 2017
3,715 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that suspending an employee without pay pending investigations is not dismissal, and resigning during such suspension forfeits salary claims.

What this practically means

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Executive summary

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The Court of Appeal (Musinga, Gatembu & Murgor, JJ.A) dismissed this first appeal against the Industrial Court's judgment (Nduma Nderi, J, dated 24 May 2013) rejecting Moses Kiplagat Changwony's claims for unlawful and constructive dismissal, reinstatement, salary, allowances and gratuity against the Tana & Athi River Development Authority. The appellant, former Managing Director, was suspended without pay in February 2006 following findings of mismanagement by the Inspectorate of State Corporations, later charged with abuse of office and conspiracy to defraud, acquitted in April 2010, and resigned in July 2006 during the prolonged suspension. The Court held the suspension was lawful under Regulation 7.15.4 of the TARDACODE, issued by the Board through the Chairman with requisite authority, and not actuated by malice, as the subsequent criminal charges demonstrated. Suspension pending investigations was not termination, so no hearing was required at that stage. Applying the constructive dismissal test from Western Excavating v Sharp (via Coca Cola v Ligaga), the Court found no employer conduct evincing an intention to terminate the contract; the delay in investigations was attributable to multiple Government agencies beyond the respondent's control, and the resignation was unilateral. The reinstatement prayer was abandoned. Claims for salary, allowances and gratuity for the unexpired second contract failed because nothing accrued during lawful suspension without pay and no gratuity computation existed on the record. The trial judge was found to have properly considered the documentary evidence. The appeal was dismissed with costs.

Key legal issues

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01

Whether the suspension of the appellant by the Board was lawful and procedural

Holding

The suspension was lawful, issued under Regulation 7.15.4 of the TARDACODE by the Chairman with requisite authority, and prompted by necessity, not malice.

Reasoning

The suspension followed findings of mismanagement by the Inspectorate of State Corporations and was intended to allow uninhibited investigations. Subsequent criminal charges for abuse of office and conspiracy to defraud reinforced that the decision was not actuated by malice or bad faith. The Board, through the Chairman, had authority under the TARDACODE.

p. 5
02

Whether the prolonged suspension without pay amounted to constructive dismissal

Holding

No constructive dismissal; the resignation was unilateral and unsolicited and cannot be attributed to the respondent.

Reasoning

Applying the test in Western Excavating v Sharp via Coca Cola v Ligaga, the court found no conduct demonstrating an intention to terminate the contract. The delay in investigations was attributable to multiple Government agencies, and the suspension without pay was a laid-down regulatory requirement.

p. 6
03

Entitlement to salary, allowances and gratuity for the second contractual period

Holding

Neither salary/allowances nor gratuity for the unexpired second term was payable.

Reasoning

The appellant resigned while on suspension without pay, so nothing had accrued; having resigned before expiry of the second contract, he was not entitled to salary for the unexpired term. No computation or authorization for gratuity for the second period appeared on the record.

p. 6
04

Whether the trial court failed to consider the documentary evidence

Holding

The trial judge considered the pleadings, documentary evidence and submissions; the impugned passage concerned only the gratuity claim.

Reasoning

The reference to absence of viva voce evidence merely restated Chemmuttut J's order dispensing with oral evidence. The court was satisfied the learned judge evaluated and analysed the evidence and rightly dismissed the claim.

p. 7

Legal principles established

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  • A first appellate court must subject the evidence and material before the superior court to fresh and exhaustive scrutiny and draw its own conclusions, while allowing for the fact it neither saw nor heard the witnesses.
  • Suspension of an employee without pay in accordance with the employer's disciplinary regulations, to pave way for investigations, does not amount to termination of employment and does not require an opportunity to be heard at that stage.
  • An employer bound by regulations prohibiting payment of salary during suspension is not authorized to pay salary or allowances during that period.
  • Where prolonged investigations into a State Corporation employee involve external Government agencies beyond the employer's control, the employer cannot be faulted for the delay, and the employee's resignation in such circumstances is unilateral, not constructive dismissal.

Court orders

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  1. 1.Appeal dismissed with costs
  2. 2.It is so ordered

Authorities

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Legislation

  • Tana & Athi Rivers Development Authority ActCap 443
  • State Corporations ActCap 446, sections 18 and 19
  • Tana & Athi Rivers Development Code of Regulations (TARDACODE)Regulation 7.15.4 / 7.15(e)
  • Employment Actgeneral reference; no express provision on constructive dismissal
  • Penal Codesections 101(1) and 317

Cases cited (4)

  • Selle v Associated Motor Boat Company Limited
    [1968] EA 123

    Duty of a first appellate court to re-evaluate evidence and draw its own conclusions.

  • Coca Cola East & Central Africa Limited vs Maria Kagai Ligaga
    [2015] eKLR

    Constructive dismissal test applied despite absence of express statutory provision.

  • Board of Governors Cardinal Otunga High School, Mosocho vs Elizabeth Kwamboka Khaemba
    [2016] eKLR

    Cited with approval of Coca Cola v Ligaga on constructive dismissal.

  • Western Excavating (ECC) Ltd v Sharp
    [1978] 1 CR 222

    Lord Denning's test for constructive dismissal - significant breach going to the root of the contract.

On appeal from
Industrial Court
Industrial Court Case No. 785 of 2010
Jurisdiction invoked
First appeal to the Court of Appeal under the applicable appellate statute (not expressly stated in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Moses Kiplagat Changwony v Tana & Athi River Development Authority", Case Analysis (2017). Civil Appeal No. 167 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/768/eng@2017-02-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.