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ELRCPartially AllowedCause Number 762 of 2016 (Employment and Labour Relations Court, Mombasa)· [2018] KEELRC 2393 (KLR)

Kipchumba v National Bank of Kenya Ltd (Cause 824 of 2016) [2018] KEELRC 2393 (KLR)

Employment and Labour Relations Court of Kenya
16 February 2018
6,608 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled a pressured employee could withdraw his resignation a day later and remains employed with full back pay.

What this practically means

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Executive summary

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The Claimant, an Associate Relationship Manager with the Respondent Bank, resigned by letter dated 5th October 2016 against the background of a Deloitte audit exposing misrepresentation of non-performing loans and a CBK Banking Fraud Unit investigation. He rescinded the resignation the following day, alleging he had been coerced by senior managers, particularly Acting Executive Director Koech. The Respondent had accepted the resignation on 6th October 2016 and refused the rescission. The Claimant sought declarations that the resignation was issued under duress and that he remained an employee, alternatively compensation of 12 months' salary for constructive dismissal, general damages, leave pay and service pay. The Court framed three issues: constructive dismissal, voluntariness of the resignation and validity of the rescission, and remedies. It held constructive dismissal was not established because the Claimant attributed the resignation to coercion rather than intolerable conditions, and his immediate rescission negated repudiatory breach. However, the resignation was made in the heat of the moment under special circumstances: persistent pressure from Koech, false promises of a new job, suppression of the Deloitte Report and CBK evidence, and a disciplinary process in which the Disciplinary Committee had absolved the Claimant. The rescission came within a day and was validly communicated; acceptance of resignation did not bar revocation, and the Respondent's investigation of coercion was not objective. The Court declared the Claimant still validly employed, ordered payment of full salary arrears, and awarded costs to the Claimant, but refused compensation for unfair termination, general damages, leave pay and service pay as the contract had been preserved throughout.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Constructive dismissal not established; the Claimant did not resign because working conditions were intolerable, and his immediate rescission negated repudiatory breach.

Reasoning

The Court adopted the test in Maria Kagai Ligaga v Coca Cola that constructive dismissal requires repudiatory breach making continued employment intolerable. The Claimant attributed the resignation to coercion by Directors rather than intolerable conditions, and by rescinding a day later showed he could continue working, destroying the repudiatory-breach basis of the claim.

p. 9
02

Whether the resignation was coerced and validly withdrawn

Holding

The resignation was coerced through wrongful pressure by Acting Executive Director Koech; the withdrawal a day later was valid, and the Claimant remains in employment.

Reasoning

The Court found persistent calls from Koech pressuring the Claimant to resign, false promises of a new job, suppression of the Deloitte Report and CBK engagement, and the Board's protectiveness, constituted special circumstances. The rescission came within a day, within the reasonable-time principle, and the Respondent's 'investigation' of coercion was not objective as it involved the alleged coercers.

p. 11
03

Whether acceptance of resignation ended the employment contract

Holding

No; where resignation is made on the spur of the moment under special circumstances, acceptance does not bar revocation, and the employer should allow a cooling-off period and genuinely investigate.

Reasoning

Drawing on comparative authorities (McManus, Kwik-Fit v Lineham, Templeton), the Court distinguished William Kariuki v Kenya Civil Aviation, which did not deal with heat-of-the-moment resignations. The Respondent accepted the resignation the same day as rescission, with no cooling-off period and a compromised investigation, so locus poenitentiae was not lost.

p. 10
04

Remedies

Holding

Compensation for unfair termination, general damages, leave pay and service pay refused; the Claimant granted declaration of continued employment and arrears of full salary.

Reasoning

The contract having been preserved by the interim ruling of 6th February 2017, the Claimant lost nothing; compensation for unfair termination was unavailable as there was no termination, and the 8.9 million general damages claim was disproportionate. The Court directed the relationship be rebuilt rather than wrecked by unreasonable demands.

p. 12

Legal principles established

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  • A resignation made under wrongful pressure amounts to coercion even without physical force or threat of confinement.
  • Resignation to amount to constructive dismissal must be unequivocal; an employee who immediately rescinds cannot sustain such a claim.
  • An employee who resigns in the heat of the moment under special circumstances may validly withdraw the resignation within a reasonable time, even where the employer has accepted it.

Court orders

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  1. 1.It is declared the Claimant is still validly an Employee of the Respondent Bank.
  2. 2.The letter of resignation issued by the Claimant to the Respondent dated 5th October 2016 is declared to have been validly withdrawn by the Claimant, through his letter to the Respondent dated 6th October 2016.
  3. 3.The Respondent shall pay to the Claimant arrears of salary in full, dating back to the time when the Claimant last received a full salary.
  4. 4.Costs of the Claim to the Claimant.

Authorities

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Legislation

  • Employment Actnotice of termination of employment provisions

Cases cited (12)

  • Max Masoud Roshankar & Another v. Sky Aero Limited
    [2015] e-KLR
  • GMV v. Bank of Africa Limited
    [2013] e-KLR
  • Steve Mutua Munga v. Homegrown Kenya Limited & 2 Others
    [2013] e-KLR
  • Paul Chitechi Mwaro v. Sasini Limited & another
    [2015] e-KLR
  • Reuben Lucheleli Shikuri v. Eldoret Packers Limited
    [2015] e-KLR
  • Maria Kagai Ligaga v Coca Cola East & Central Africa Limited
    Industrial Court at Nairobi, Cause Number 611 [N] of 2009
  • Coca Cola East & Central Africa Limited v. Maria Kagai Ligaga
    [2015] e-KLR, Court of Appeal Civil Appeal Number 20 of 2010
  • Potter v. Legal Aid Services Commission
    2015 SCC 10
  • McManus v. Brian McCarthy Contractors
    UD 946/2007
  • Kwik-Fit [GB] Limited v. Lineham
    [1992] IRLR 156
  • William Kariuki v. Kenya Civil Aviation
    [2008]
  • Templeton v. RBC Dominion Securities, Inc.
    2005, Carswell Nfid, 216
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 and the Labour Relations Act (employment dispute founded on Statement of 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, "Kipchumba v National Bank of Kenya Ltd (Cause 824 of 2016) [2018] KEELRC 2393 (KLR)", Case Analysis (2018). Cause Number 762 of 2016 (Employment and Labour Relations Court, Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2393/eng@2018-02-16

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