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ELRCPartially AllowedCause No. 419 of 2014· [2015] KEELRC 75 (KLR)

Nathan Ogada Atiagaga v David Engineering Limited [2015] KEELRC 75 (KLR)

Employment and Labour Relations Court of Kenya
21 September 2015
MMM. Mbaru
2,267 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, a Mechanical Engineer employed by the Respondent from July 2007 as a Supervisor, resigned by two months' notice effective 2nd December 2013, citing late payment of salaries, long working hours, lack of medical cover and safety concerns. He claimed he was instead dismissed, issued a clearance form and a Certificate of Service without being allowed to serve the notice, and without payment of November 2013 salary, December days worked, notice pay, leave or service pay. The Respondent, though served, did not attend the hearing and called no evidence; its defence denied constructive dismissal and asserted the dismissal was justified by disharmony the Claimant created, and that all dues were paid. The court found the Claimant did not prove constructive dismissal because he did not attach his resignation letter or pursue that claim. However, his unchallenged evidence established late payment of wages, held to be intolerable, inhuman and degrading. The Respondent provided no written notice or reasons for the dismissal and did not hear the Claimant, contravening sections 43 and 45 of the Employment Act and Article 41 of the Constitution; the dismissal was unfair. The court awarded maximum compensation of Kshs.1,057,800.00, one month's notice pay, November 2013 salary and December days worked, with interest on the monetary awards except compensation, plus costs. Claims for two months' notice pay, unpaid leave and service pay were declined, the latter barred by section 35(6) of the Employment Act given NSSF and NHIF deductions.

Key legal issues

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01

Constructive dismissal

Holding

Although late payment of salary created intolerable conditions justifying a constructive dismissal claim, the Claimant did not prove constructive dismissal because he did not attach his resignation letter nor pursue that claim

Reasoning

The court defined constructive dismissal as employer-created conditions rendering employment intolerable, placing the burden of proof on the employee. The Claimant's evidence established late payment of salaries, but he failed to attach his resignation letter and did not pursue the resignation issue in his Reply to the defence, so constructive dismissal was not established.

p. 3
02

Unfair dismissal - substantive and procedural fairness

Holding

The Claimant was dismissed without written notice or reasons and without being heard, contrary to sections 43 and 45 of the Employment Act, rendering the dismissal unfair

Reasoning

The Respondent gave no written reasons for the dismissal beyond a general averment of disharmony. Written notice with reasons is mandatory; a Certificate of Service is insufficient. The employee must be heard even before summary dismissal. Non-compliance makes the dismissal an illegality ab initio and an unfair labour practice contrary to Article 41 of the Constitution, amounting to unfair dismissal under section 45.

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03

Late payment of wages as unfair labour practice

Holding

Delayed payment of earned wages is an intolerable, inhuman and degrading condition contrary to fair labour practices

Reasoning

The Claimant's unchallenged sworn evidence established late payment of his salary. The court held that an employee who has given their labour must be remunerated in good time, otherwise they are reduced to begging and living on the mercy of others. Given the Respondent filed no evidence and offered only general denials, this fact stood proved.

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04

Remedies - compensation, notice pay, arrears, leave and service pay

Holding

Maximum compensation at 12 months' gross salary awarded; one month's notice pay and unpaid November and December 2013 salary awarded; leave and service pay claims declined

Reasoning

On the finding of unfair dismissal, compensation was assessed at the maximum rate based on the last salary of Kshs.88,150.00. Two months' notice pay was unsupported by any contract, so only the statutory minimum of one month was awarded. November and December salaries were unpaid on the evidence. Leave was claimed in a blanket form without particulars; service pay was barred by section 35(6) of the Employment Act given NSSF deductions.

p. 4

Legal principles established

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  • Constructive dismissal occurs where the employer creates conditions making continuation of employment intolerable, and the burden is on the employee to prove the employer introduced the intolerable condition and that resignation was the only resolution
  • Termination or dismissal must be notified in writing stating the reasons; a Certificate of Service is not sufficient
  • An employee is entitled to be heard before summary dismissal even for serious misconduct; failure to observe substantive and procedural requirements renders dismissal an illegality ab initio and an unfair labour practice contrary to Article 41
  • Under section 35(6) of the Employment Act, service pay is not payable where statutory dues such as NSSF have been paid

Court orders

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  1. 1.Declaration that the Claimant was unfairly dismissed
  2. 2.Compensation for unfair dismissal of Kshs.1,057,800.00
  3. 3.Notice pay of Kshs.88,150.00
  4. 4.Salary for November 2013 of Kshs.88,150.00
  5. 5.Salary for 8 days worked in December 2013 of Kshs.21,156.00
  6. 6.Interest on notice pay and the November and December 2013 salary awards
  7. 7.Costs of the suit to the Claimant

Authorities

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Legislation

  • Constitution of KenyaArticle 41
  • Employment ActSection 43
  • Employment ActSection 44
  • Employment ActSection 45
  • Employment ActSection 35(6)

Cases cited (2)

  • Emmanuel Mutisya Solomon versus Agility Logistics
    Cause No.1448 of 2011
  • Mariana Onica and Another versus Sky Aero Limited
    Cause No.1815 of 2014
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court (dispute of wrongful dismissal and non-payment of terminal dues); Article 41 of the Constitution invoked

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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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, "Nathan Ogada Atiagaga v David Engineering Limited [2015] KEELRC 75 (KLR)", Case Analysis (2015). Cause No. 419 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/75/eng@2015-09-21

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