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ELRCPartially AllowedCause No. 232 of 2014· [2016] KEELRC 1394 (KLR)

Christina Sigowa Wadulo v Solimpexs Africa Limited [2016] KEELRC 1394 (KLR)

Employment and Labour Relations Court of Kenya
7 April 2016
4,022 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a 'voluntary' resignation forced, awarding a probationary CEO six months' salary plus dues totalling over Kshs. 6 million.

What this practically means

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Executive summary

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The Claimant, employed as Chief Executive Officer of the Respondent under a letter of appointment dated 23rd May 2012 with effect from 1st July 2012, claimed damages for unlawful and unfair termination. She alleged that on 30th November 2012 the Board Chairman told her the Board was divided over her generous terms and pressured her to resign, on an understanding that she would be compensated for the unexpired period of her five-year contract, which the Respondent thereafter refused to honour. She sought terminal dues, three months' pay in lieu of notice, and twelve months' salary as compensation for constructive dismissal. The Respondent admitted the employment but contended she was still on probation, having never been confirmed in writing, that her resignation was voluntary, and that her entitlements had been paid. The court framed three issues: probationary status, whether the resignation was voluntary, and remedies. It held that under clause 2 of the contract and Section 42(2) of the Employment Act, the probation extended automatically to 31st December 2012 absent written confirmation, so the Claimant was still on probation at resignation. However, applying the constructive dismissal test in Potter v New Brunswick Legal Aid Services Commission, it found the resignation was forced, since it flowed from discussions with the Chairman and showed no free will on her part. The court awarded notice pay, accrued salaries, utility reimbursements, prorated leave, air ticket and relocation expenses, a Certificate of Service, and six months' salary as compensation for unlawful dismissal, less statutory deductions, plus costs.

Key legal issues

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01

Whether the Claimant was still on probation as at 30 November 2012

Holding

Yes - the initial three-month probation ending 30.9.2012 extended automatically to 31.12.2012 because the Respondent never confirmed her employment in writing, consistent with Section 42(2) of the Employment Act

Reasoning

The court read clause 2 of the appointment letter literally: confirmation had to be in writing before or on completion of the first probation period. Absent written confirmation, probation extended automatically for a further three months. The court found this consistent with Section 42(2) of the Employment Act 2007, which caps a probationary period at six months with an extension of up to six months with the employee's agreement. The Claimant resigned on 30.11.2012, within the extended probation.

p. 6
02

Whether the resignation was voluntary or forced

Holding

The resignation was forced, amounting to constructive/unlawful termination despite the Claimant being on probation

Reasoning

The resignation letter itself referenced discussions and an amicable agreement reached at a meeting with the Board Chairman, showing the resignation did not emanate from the Claimant's free will. Applying the two-branch constructive dismissal test from the Supreme Court of Canada in Potter v New Brunswick Legal Aid Services Commission, the court held that an employer's conduct showing an intention not to be bound by the contract can constitute constructive dismissal. The Claimant's demand for pay in lieu of notice further indicated she was terminated rather than resigning spontaneously.

p. 7
03

What remedies the Claimant was entitled to

Holding

Notice pay, accrued salary, utility reimbursements, prorated leave, travel and relocation costs, a Certificate of Service, and six months' salary as compensation for unlawful dismissal

Reasoning

Having found a forced resignation amounting to unlawful termination, the court awarded contractual dues (notice pay, October and November salary, utility bills, prorated leave, air ticket and relocation expenses) and exercised discretion to award six months' salary as compensation for unlawful dismissal, less amounts already paid and statutory deductions. A Certificate of Service was also ordered.

p. 7

Legal principles established

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  • Where an employer does not confirm an employee in writing before completion of the initial probation period, the probation extends automatically per the contract, subject to the statutory six-month cap
  • An employer's conduct can convert an apparent resignation into a constructive/forced dismissal where the resignation flows from a discussion showing no free will on the employee's part

Court orders

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  1. 1.Award of 1 month's salary in lieu of notice of Kshs. 750,000
  2. 2.Award of salary balance for October 2012 of Kshs. 238,175
  3. 3.Award of salary for November 2012 of Kshs. 750,000
  4. 4.Award of electricity and water bills for October to November 2012 of Kshs. 14,295
  5. 5.Award of one way ticket for self and spouse of Kshs. 39,600
  6. 6.Award of leave on prorate basis for 8.75 days of Kshs. 298,295
  7. 7.Award of relocation expenses to Kampala of Kshs. 195,500
  8. 8.Issuance of a Certificate of Service
  9. 9.Award of 6 months' salary for unlawful dismissal of Kshs. 4,500,000
  10. 10.Total due of Kshs. 6,785,865 less statutory deductions, plus costs of the suit

Authorities

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Legislation

  • Employment Act, 2007Section 42(2)
  • Employment Act, 2007Section 10(2)
  • Employment Act, 2007Section 41

Cases cited (4)

  • Benjamin Nyambati Ondiba Vs Egerton University
    (2014) eKLR
  • Coca Cola East & Central Africa Limited Vs Maria Kagailigaga
    (2015) eKLR
  • Alphonce Maghanga Mwachanya Vs Operation 680 Limited
    (2013) eKLR
  • Potter vs. New Brunswick Legal Aid Services Commission
    2015 SCC 10
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (fair hearing/unfair termination claim)

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, "Christina Sigowa Wadulo v Solimpexs Africa Limited [2016] KEELRC 1394 (KLR)", Case Analysis (2016). Cause No. 232 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1394/eng@2016-04-07

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