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ELRCPartially AllowedCause No 28 of 2013· [2013] KEELRC 648 (KLR)

Samuel Mukonesi Washisino v Rakesh Gudka & another [2013] KEELRC 648 (KLR)

Industrial Court of Kenya
12 July 2013
1,329 words in judgment
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The bottom line

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What this practically means

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Executive summary

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The claimant, employed by the respondents from 24.10.2002 as a loader and later a shop assistant earning Kshs.7,350/= monthly at separation, claimed notice pay, severance pay, underpayments, payment for days worked in February 2012, and compensation under section 49(1)(c) of the Employment Act, 2007. In February 2012 the 1st respondent, citing reduced work, proposed redeploying him to a farm at Makindu at Kshs.200/= per day. The claimant declined; no agreement was reached, and he was later shown a computation of terminal dues of Kshs.15,700/= which he accepted. The respondents filed no response and called no witness. The court framed two issues: whether the employment was unfairly terminated and whether remedies were due. It found there was no redundancy because the employer did not abolish the office but imposed new and disadvantageous terms without negotiation - changing the job, reducing pay, and converting monthly pay to daily wages - which went to the foundations of the contract. Declining inferior terms was not resignation, as the claimant never relinquished his office. The court held the respondents constructively and unfairly terminated the employment. It awarded underpayments of Kshs.179,907.00, one month's notice pay of Kshs.10,867.50, and six months' gross salary of Kshs.65,205.00 as compensation, but refused severance pay (no redundancy) and February days worked (already paid). Judgment was entered jointly and severally against the respondents for Kshs.255,979.50 payable by 15.08.2013, with interest at court rates in default, plus costs to the claimant.

Key legal issues

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01

Whether the claimant's employment was unfairly terminated

Holding

The termination was constructive and unfair; it was not a resignation and there was no redundancy

Reasoning

The employer, citing reduced work, sought to redeploy the claimant from shop assistant to farm work at Kshs.200/= per day in place of a monthly wage of Kshs.7,350/=, without negotiation. The court held this unilateral variation went to the foundations of the contract, amounting to constructive termination by the respondents, and that neither the procedure nor the substance was fair. The court distinguished resignation, which requires relinquishing the office held, and found no redundancy because the office was not abolished.

p. 3
02

Entitlement to underpayments

Holding

Underpayments of Kshs.179,907.00 were established and payable

Reasoning

The underpayments were particularized in the memorandum of claim and the respondents raised no objection by pleadings or evidence. The court found the claim established and awarded the sum as prayed for.

p. 3
03

Notice pay

Holding

One month's pay in lieu of notice of Kshs.10,867.50 awarded under section 35(1)(c) and section 36 of the Employment Act

Reasoning

The claimant was paid at monthly intervals, entitling him to one month's termination notice under section 35(1)(c), and therefore one month in lieu of notice under section 36 of the Employment Act. The claimant was awarded Kshs.10,867.50 as prayed for.

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04

Compensation for unfair termination under section 49(1)(c)

Holding

Six months' gross salary, Kshs.65,205.00, awarded as compensation

Reasoning

In exercising the discretion under section 49(1)(c) of the Employment Act, 2007, the court considered the balance of justice and concluded that six months' gross salary at the last monthly pay of Kshs.10,867.50 would meet the ends of justice.

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05

Liability of the respondents

Holding

Judgment entered against the respondents jointly and severally

Reasoning

As there was no written contract, and both respondents dealt with the claimant, the court held that the ends of justice would be served by entering judgment against the respondents jointly and severally.

p. 3

Legal principles established

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  • An employer who unilaterally varies fundamental terms of employment (duty station, pay, periodicity of pay) without negotiation constructively terminates the employee, who may properly treat himself as terminated
  • Declining to take up a redeployment on inferior terms does not amount to resignation; resignation requires relinquishing the office held

Court orders

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  1. 1.A declaration that the claimant's employment was constructively terminated and the termination was unfair
  2. 2.The respondents to pay the claimant Kshs.255,979.50 by 15.08.2013, in default interest to be payable at court rates from the date of judgment till full payment
  3. 3.The respondents to pay the costs of the case

Authorities

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Legislation

  • Employment Actsection 49(1)(c)
  • Employment Actsection 35(1)(c)
  • Employment Actsection 36
  • Employment Actseverance/redundancy provisions (severance pay claimed)
Jurisdiction invoked
Not expressly invoked; jurisdiction exercised under the Employment Act, 2007 (claims for unfair termination, notice pay, severance and compensation under sections 35, 36, 49(1)(c))

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Samuel Mukonesi Washisino v Rakesh Gudka & another [2013] KEELRC 648 (KLR)", Case Analysis (2013). Cause No 28 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/648/eng@2013-06-12

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