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ELRCPartially AllowedCause No. 1795 of 2011· [2013] KEELRC 583 (KLR)

Catherine Kinyany v Mcl Saatchi & Saatchi [2013] KEELRC 583 (KLR)

Industrial Court of Kenya
15 May 2013
MOMaureen Onyango
1,658 words in judgment
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The bottom line

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Kenya's Industrial Court ruled an employee who resigned and accepted a settlement can't claim unfair dismissal compensation, but earned interest after the employer missed payments.

What this practically means

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Executive summary

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The Claimant, formerly Managing Director of the Respondent, was suspended on full pay on 21st January 2011 to allow investigations into alleged mismanagement. She protested that she had not been given reasons or a hearing, requested a meeting with the Board, and then resigned on 16th February 2011, demanding five months' management pay in arrears, January 2011 salary, half salary for February 2011, three months' salary in lieu of notice, and her pension. Following negotiations, the Respondent's Chairman by letter dated 27th July 2011 proposed payment of Kshs.3,083,501 in ten instalments, which the Claimant accepted in writing on 10th August 2011 as full and final settlement, with one correction. The Respondent defaulted on the payment plan, prompting this claim for unfair termination compensation, interest, and costs. The court framed two issues: whether the Claimant was constructively dismissed or resigned freely, and her entitlement to the prayers. It held that no constructive dismissal was established, the suspension being the start of a legitimate disciplinary process which the Claimant pre-empted by resigning and negotiating a settlement mirroring her own demands. The compensation claim was dismissed. However, because the Respondent defaulted on the agreed payment plan, the court awarded interest on the agreed sum of Kshs.3,083,501 at 12% per annum from the date of filing until payment, plus costs of the suit. Judgment read and signed on 15th May 2013.

Key legal issues

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01

Whether the Claimant was constructively dismissed or resigned voluntarily

Holding

The Claimant voluntarily resigned; there was no constructive dismissal

Reasoning

The Claimant was suspended on full pay to allow investigations, the start of a disciplinary process. She did not await its conclusion but resigned and demanded specific dues. She then invited the Respondent to negotiate settlement, and the eventual settlement of Kshs.3,083,501 mirrored exactly what she had demanded in her resignation letter and which the Respondent paid in full. Her conduct demonstrated voluntary resignation rather than forced departure.

p. 6
02

Whether the Claimant was entitled to the prayers sought, including compensation and interest

Holding

Compensation refused; interest on the agreed settlement sum awarded at 12% per annum from filing to payment; costs awarded

Reasoning

Having found voluntary resignation, no unfair termination existed to ground compensation. However, because the Respondent defaulted on the agreed instalment payment plan it had proposed and the Claimant accepted, the Claimant was compelled to file suit; interest on the agreed sum of Kshs.3,083,501 was accordingly awarded at 12% per annum from the date of filing until payment, together with costs.

p. 7

Legal principles established

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  • A claim of constructive dismissal requires the employee to show that the employer's conduct made it extremely difficult for the employee to continue working
  • Compensation for unfair termination or dismissal can only be granted upon a finding of unfair termination or dismissal

Court orders

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  1. 1.Dismissal of the claim for compensation on account of unfair termination
  2. 2.Award of interest on the agreed sum of Kshs.3,083,501 from the date of filing the case to the date payment was made, at 12% per annum
  3. 3.Award of costs of the suit to the Claimant
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Industrial Court of Kenya

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Catherine Kinyany v Mcl Saatchi & Saatchi [2013] KEELRC 583 (KLR)", Case Analysis (2013). Cause No. 1795 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/583/eng@2013-05-15

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