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ELRCPartially AllowedCause No. 80 of 2013· [2016] KEELRC 1507 (KLR)

Patrick Omutia v Telkom Kenya Limited [2016] KEELRC 1507 (KLR)

Employment and Labour Relations Court of Kenya
18 March 2016
3,193 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that squeezing an employee out through pressure and a fake job amounts to constructive dismissal, entitling him to an early retirement package.

What this practically means

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Executive summary

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The Claimant, formerly Director of KCCT, was in April 2004 deployed to Telkom Kenya Limited as 'Chief of the Company' at a lower salary scale, without a job description, office, work station or assigned duties. He was placed on successive 80-day compulsory leaves and had benefits such as medical cover, professional subscriptions and newspaper refunds suspended. His requests for early retirement under a retrenchment safety net package proposed by the Office of the President were declined by successive Managing Directors, and he resigned and took up employment with Nairobi City Water and Sewerage Company. He sought declarations that he was entitled to early retirement and terminal dues, plus general and special damages. The Respondent contended the position was 'Chief Officer', that the Claimant never reported for duty, resigned while on leave, and was not covered by the early retirement scheme approved for specific managers. The court found that the posting to a non-existent position, denial of duties, office and job description, compulsory prolonged leave and arbitrary reduction of grade and benefits amounted to repudiation of the contract, and that the Claimant was constructively dismissed rather than having voluntarily resigned. Applying South African authority, the court held such a resignation is akin to dismissal. The court awarded Kshs 5,676,549.50, comprising the early retirement package of Kshs 5,507,249.50 and Kshs 61,300 in unreimbursed benefits, offset by a staff loan of Kshs 4,495,754.26, with interest from the date of constructive dismissal. General damages were refused as the Claimant's loss was mitigated and an award would amount to unjust enrichment. Costs were awarded in both the High Court and this Court.

Key legal issues

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01

Whether the Claimant was constructively dismissed or voluntarily resigned

Holding

The court found constructive dismissal; the Respondent had by its own conduct repudiated the contract before the Claimant tendered his resignation

Reasoning

The Claimant was posted to a non-existent position at lower remuneration, given no job description, office, work station or duties, and placed on 160 days of compulsory leave, with benefits arbitrarily withdrawn. This conduct amounted to repudiation, so the subsequent resignation was not voluntary. Relying on labour law authority, the court held such a resignation is akin to a dismissal.

p. 6
02

Whether the Claimant was entitled to the early retirement package

Holding

Yes - the Office of the President's retrenchment safety net package was applicable to the Claimant, who was below 50 years and equivalent in rank to a manager

Reasoning

The proposal approved early retirement for two managers below 50 years under a package of golden handshake, notice pay, severance and transport allowance, and expressly stated it would be the benchmark for future retrenchments. The Claimant, having served nearly 20 years and being below 50, fell within its terms, and his request was unfairly denied.

p. 5
03

Whether general damages were payable

Holding

General damages refused despite the finding of unfair labour practice

Reasoning

Because the court granted the early retirement package the Claimant had sought, and his suffering was mitigated by immediate employment with Nairobi City Water and Sewerage Company, general damages would amount to unjust enrichment. This does not derogate from the finding that the Managing Director's conduct was unlawful and unfair.

p. 7

Legal principles established

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  • The resignation of an employee due to unreasonable and excessive pressure by his employer is not a voluntary resignation but a situation akin to dismissal (constructive dismissal).
  • An employer's conduct in posting an employee to a non-existent position, withholding duties, office, job description and benefits, and imposing prolonged compulsory leave amounts to repudiation of the employment contract and unfair labour practice.

Court orders

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  1. 1.A declaration that the Claimant was constructively dismissed and was entitled to the early retirement exit package approved by the Office of the President
  2. 2.Award of Kshs 5,507,249.50 as the early retirement package
  3. 3.Award of Kshs 61,300 being unreimbursed professional membership, education fees, newspaper refunds and medical reimbursement, bringing the total award to Kshs 5,676,549.50
  4. 4.Set-off of Kshs 4,495,754.26 owed by the Claimant as staff loan as at 16th March 2011 against the judgment sum
  5. 5.Interest at court rates from the date of constructive dismissal until payment in full, treated as part of the set-off
  6. 6.Costs of the suit in the High Court where the matter commenced and in this Court

Authorities

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Cases cited (2)

  • WL Ochse Webb & Pretorious (Pty) Ltd v Vermeuleu
    [1997] 2 BLLR 124 (LAC)
  • Vander Piet v Leisurenet Ltd t/a Health and Racquet Club
    [1998] 5 BLLR 471 (LAI)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over a dispute between an employee and employer (the suit commenced in the High Court and was transferred to this Court)

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, "Patrick Omutia v Telkom Kenya Limited [2016] KEELRC 1507 (KLR)", Case Analysis (2016). Cause No. 80 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1507/eng@2016-03-18

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