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ELRCPartially AllowedIndustrial Court Cause (Nairobi), suit filed 9th May 2011· [2015] KEELRC 655 (KLR)

Sewira Fundi Maina v Inland Services Company Limited & 2 others [2015] KEELRC 655 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
13 July 2015
2,653 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employee forced out by workplace changes won Kshs. 162,000 for unfair dismissal, but older dues claims were thrown out for being filed too late.

What this practically means

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Executive summary

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The Claimant sued for employment dues of Kshs. 323,010/- allegedly owed by the 1st Respondent from 2003 (per an admission letter of 1st August 2004 by its finance manager, J.M. Ogola), plus Kshs. 69,000/- salary arrears from the 2nd Respondent, and interest. The Respondents denied the claims, raised limitation, impugned the joinder of the 3rd Respondent, and counterclaimed Kshs. 69,000/- for notice. The Claimant testified; the Respondents called no evidence, choosing to argue law only. The court held that the claims against the 1st Respondent were time barred: the repealed Employment Act Cap 229 had no limitation provision, so the 6-year contractual limitation in the Limitation of Actions Act applied, and a cause of action accruing in December 2003 had to be filed by December 2009. Section 90 of the Employment Act 2007 could not assist as it is not retrospective. The joinder of the 3rd Respondent was also misplaced. On the 2nd Respondent, the court found the December 2009 realignment of duties created a parallel management centre undermining the Claimant's position, so his resignation amounted to constructive dismissal - a repudiatory breach entitling the employee to resign and treat himself as dismissed. No cause for the dismissal was demonstrated, so the termination was unfair, and the court awarded 12 months' compensation of Kshs. 162,000/- against the 2nd Respondent. The counterclaim was dismissed with costs as unproved. There was no order as to costs on the award, but the Claimant received costs on the counterclaim.

Key legal issues

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01

Limitation of the claim for dues from the 1st Respondent

Holding

The claim was time barred; the applicable limitation was 6 years for contract under the Limitation of Actions Act, not Section 90 of the Employment Act 2007 which is not retrospective

Reasoning

The claim accrued in December 2003 when the 1st Respondent ceased operations. The repealed Employment Act Cap 229 had no express limitation period, so the Limitation of Actions Act Section 4(1) applied, allowing suit only until December 2009. Suit was filed in May 2011, outside the period. Section 90 of the Employment Act 2007 cannot apply retrospectively to revive the claim.

p. 3
02

Whether the Claimant's resignation from the 2nd Respondent constituted constructive and unfair dismissal

Holding

Yes; the realignment of duties created a parallel centre of management undermining the Claimant, constituting a repudiatory breach; no cause was demonstrated and the Claimant was unfairly terminated

Reasoning

The 2nd Respondent's letter assigning a colleague overlapping control of key functions undermined the Claimant's managerial position. The employee is entitled to treat such employer conduct as repudiatory breach and resign. No cause for dismissal was demonstrated; the Claimant gave one month's notice. The court awarded 12 months' compensation of Kshs. 162,000/-, considering the conduct of the Respondents regarding the unpaid dues.

p. 4
03

The counterclaim for Kshs. 69,000/- notice pay

Holding

Dismissed with costs as no evidence was led to prove it

Reasoning

The Respondents did not call any witness or produce documentary proof in support of their defence or counterclaim after the Claimant testified. The counterclaim therefore failed entirely and the Claimant was awarded costs on it.

p. 4
04

Joinder of the 3rd Respondent

Holding

Misplaced; he was not properly joined since the claim against the 1st Respondent was incompetent

Reasoning

The 3rd Respondent traded in the name of the 1st Respondent and could only properly have been joined had the cause of action against the 1st Respondent been competent. As that claim was time barred, the joinder failed.

p. 3

Legal principles established

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  • Under the repealed Employment Act Cap 229 there was no express limitation provision and the Limitation of Actions Act's 6-year period for contract claims applied
  • Section 90 of the Employment Act 2007 is not retrospective and does not apply to causes of action accruing before its commencement
  • Resignation in response to an employer's repudiatory breach amounts to constructive dismissal

Court orders

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  1. 1.The claim against the 1st and 3rd Respondents for dues accrued in 2003 is dismissed as time barred
  2. 2.Judgment entered for the Claimant against the 2nd Respondent for Kshs. 162,000/- being 12 months' compensation for unfair/constructive dismissal
  3. 3.The Claimant's resignation was a constructive dismissal and unfair termination
  4. 4.The counterclaim is dismissed with costs to the Claimant
  5. 5.No order as to costs on the Kshs. 162,000/- award; Claimant entitled to costs on the counterclaim

Authorities

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Legislation

  • Employment Act Cap 226Section 74; Section 5(4)(a)
  • Employment Act 2007Section 90
  • Repealed Employment Act Cap 229limitation provisions (absent)
  • Limitation of Actions Act Cap 2Section 4(1)
  • Industrial Court (Procedure) Rules 2010Rule 4(c)
  • ILO Termination of Employment Convention 1982 (No. 158)imperative to terminate with cause and accord hearing rights

Cases cited (7)

  • Peter John Mwangi Kamau v Autolitho Limited
    [2013] eKLR
  • Gharib Hashim Rashid v Wilhelmsen Ships Services Limited
    [2013] eKLR
  • Rawal v Rawal
    [1990] KLR 275
  • Iga v Makerere University
    [1972] EA 65
  • Gathoni v Kenya Co-operative Creameries Limited
    [1982] KLR 104
  • Steven Kariuki v George Mike Wanjohi & 2 Others
    [2013] eKLR
  • Emmanuel Mutisya Solomon v Agility Logistics
    Industrial Court Cause No 1448 of 2011
Jurisdiction invoked
Original jurisdiction of the Industrial Court under the Industrial Court (Procedure) Rules 2010 over employment disputes

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, "Sewira Fundi Maina v Inland Services Company Limited & 2 others [2015] KEELRC 655 (KLR)", Case Analysis (2015). Industrial Court Cause (Nairobi), suit filed 9th May 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/655/eng@2015-07-13

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