Irene Asiago v Trans-Nzoia Teachers Consumer Cooperative Society [2015] KEELRC 1132 (KLR)
The bottom line
#A Kenyan employer that suspends an employee indefinitely without paying wages commits repudiatory breach, and the employee can treat the job as unfairly terminated and claim damages.
What this practically means
#Executive summary
#Key legal issues
#Whether indefinite suspension amounted to termination of employment
The Respondent had contractual authority under clause 5 of the CBA to suspend the Claimant indefinitely because the theft was reported to the Police, so the suspension itself was not a breach entitling the Claimant to treat employment as terminated.
The CBA allowed suspension not exceeding 30 days, extendable indefinitely where the arms of the law were involved. Theft was reported to the Police on the day it occurred and the Claimant recorded a statement. The Court therefore held the employer had contractual authority for indefinite suspension and was not in breach of a fundamental contractual term on that ground alone.
Whether non-payment of wages during suspension was repudiatory
Yes. Failing to pay wages and house allowance after September 2013 breached an essential term of the contract and constituted repudiation, which the Claimant accepted by filing the Cause, so she was entitled to treat herself as dismissed.
The CBA clause on indefinite suspension required full benefits including house allowance, which were not paid. The Claimant's unchallenged testimony was that she was not paid after September 2013. Letters of 12 October and 7 November 2013 went unanswered, amounting to implied acceptance of repudiation, and the Claimant accepted it by filing suit, as in London Transport Executive v Clarke and Geys v Societe Generale.
Whether the termination was unfair
Yes. Having found repudiatory breach of a fundamental term, the Court concluded the termination of the Claimant's employment was unfair.
The Court treated the repudiation accepted by the Claimant as an unfair termination without a separate procedural analysis, since the repudiatory conduct itself established that the termination was unfair.
Entitlement to salaries during suspension
The Claimant is entitled to salaries she would have earned until 19 February 2014 when she filed the Cause, pursuant to clause 5 of the CBA.
Since the termination was unfair and the CBA required full benefits during suspension, the Court awarded salaries for 17 months at Kshs 21,000/- per month, totaling Kshs 357,000/-, despite the pleaded figure of Kshs 268,810/-.
Entitlement to gratuity and correct formula
The Claimant is entitled to gratuity under clause 18 of the CBA at 35 days' pay per completed year of service, computed on Kshs 21,000/- divided by 26, over 17 years, yielding Kshs 480,576/-.
The Claimant's claimed figure of Kshs 1,066,291 used the wrong formula (salary of Kshs 53,762/- and a divisor of 30). The Court applied the CBA clause 18 formula using the actual basic pay of Kshs 21,000/-, a divisor of 26, 35 days per year and 17 years of service.
Legal principles established
#- Where an employer repudiates an employment contract by failing to pay wages during an indefinite suspension, the innocent employee may treat the contract as terminated by filing suit; the statutory framework in Kenya has not provided for repudiation, so the common law applies.
- A repudiatory breach is accepted by the innocent party through conduct, and an employer's failure to respond to letters complaining of the breach amounts to implied acceptance of repudiation.
Court orders
#- 1.Payment of 1 month pay in lieu of notice of Kshs 21,000/-
- 2.Payment of gratuity of Kshs 480,576/-
- 3.Payment of salaries under suspension of Kshs 357,000/-
- 4.Total award of Kshs 858,576/- payable by the Respondent to the Claimant
- 5.Dismissal of the heads of claim for unpaid salary, salary arrears and shares
- 6.Costs of Kshs 100,000/- awarded to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over a claim of unfair termination of employment (reference/cause filed 19 February 2014); specific constitutional or statutory provision not cited in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Irene Asiago v Trans-Nzoia Teachers Consumer Cooperative Society [2015] KEELRC 1132 (KLR)", Case Analysis (2015). Cause No 38 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1132/eng@2015-05-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.