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ELRCPartially AllowedCause No 1588 of 2010· [2019] KEELRC 729 (KLR)

David Nelson Miseda v Seven Seas Technology Limited [2019] KEELRC 729 (KLR)

Employment and Labour Relations Court
27 September 2019
MOMAUREEN ONYANGO
4,477 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 that an employee forced to 'resign' under threats was actually constructively dismissed and awarded him full dues.

What this practically means

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Executive summary

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The claimant, employed by the respondent as Business Manager-Africa Division from 21 January 2009, alleged that his resignation of 28 June 2010 was coerced after his salary was unilaterally reduced from Kshs.205,000 to about Kshs.123,000-140,500, he was recalled from Ethiopia and given no duties, and he was threatened with dismissal and loss of terminal benefits at an ad hoc meeting. He sought a declaration of constructive termination, June 2010 salary, unpaid dues, commissions of USD 59,852.59, leave pay, compensation, certificate of service, costs and interest. The respondent admitted the employment but denied coercion, contending the resignation was voluntary, that commissions were not automatic, that the salary reduction reflected recovery of a salary advance, and that the claimant had not complied with exit procedures. It counterclaimed for Kshs.581,933.29 for three months' notice not given, return of documents and data, and general damages. The court framed three issues: voluntariness of the resignation, remedies, and the counterclaim. Relying on the payslips, the resignation acceptance letter of 20 July 2010, email correspondence with the Chief Talent Officer, and the unrebuted claimant's evidence, the court found the resignation coerced and a constructive dismissal. It awarded notice pay of Kshs.222,500, June 2010 salary of Kshs.222,500, withheld April and May salary of Kshs.164,000, leave pay of Kshs.150,333 and commissions of USD 59,852.59, applying Section 10(7) of the Employment Act to shift the burden to the employer for withheld records. The counterclaim failed for want of evidence and was dismissed with costs. The respondent was ordered to pay the claimant's costs, with interest from the date of judgment.

Key legal issues

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01

Whether the claimant's resignation was voluntary or amounted to constructive dismissal

Holding

The resignation was coerced and constituted constructive dismissal

Reasoning

The court found the claimant's salary was unilaterally reduced, he was assigned no duties on return, and at a meeting of 28 June 2010 he was given an option to resign and keep terminal dues or be dismissed and lose them. The respondent's witness, who joined in 2014, could not rebut this version. The payslips contradicted the salary-advance explanation. Resignation under such duress is in effect a termination.

p. 8
02

Entitlement to notice pay, June salary, withheld April/May salary and leave pay

Holding

Claimant awarded one month's notice pay, June 2010 salary, Kshs.164,000 withheld salary and Kshs.150,333 leave pay

Reasoning

The resignation acceptance letter of 20 July 2010 admitted June salary and the April/May shortfalls were outstanding; RW1 had no evidence of payment of June salary. The leave claim was unchallenged and the respondent failed to produce leave records required under Sections 10(3)(a)(i) and 74(1)(f) of the Employment Act.

p. 8
03

Entitlement to unpaid commissions of USD 59,852.59

Holding

Commissions awarded as prayed

Reasoning

Correspondence confirmed entitlement to a bonus for the Doshen Project and receipt of payment by Afcor. The respondent, in possession of the records, produced none and did not rebut the claimant's evidence; under Section 10(7) the burden shifted to it. The claim was therefore proved on a balance of probabilities.

p. 8
04

Whether the counterclaim was proved

Holding

Counterclaim dismissed

Reasoning

No evidence was adduced in support of the counterclaim; it was not mentioned in the witness statement nor tested in cross-examination. It therefore remained unproved and was dismissed with costs.

p. 9

Legal principles established

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  • Where an employer fails to produce documents in its possession, the burden of disproving the employee's averments shifts to the employer
  • A resignation tendered under threat of dismissal and loss of terminal dues is not voluntary and amounts to constructive dismissal

Court orders

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  1. 1.One month's gross pay in lieu of notice Kshs.222,500
  2. 2.Salary for June 2010 Kshs.222,500
  3. 3.Withheld salary for April and May 2010 Kshs.164,000
  4. 4.Pay in lieu of 15 days annual leave earned but not taken Kshs.150,333
  5. 5.Unpaid Commissions USD 59,852.59
  6. 6.The respondent shall pay claimant's costs for the suit
  7. 7.Interest shall accrue from date of judgment
  8. 8.Counterclaim dismissed with costs

Authorities

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Legislation

  • Employment Act, 2007Sections 17(1), 18(2), 25(1), 28, 36, 43
  • Employment Act, 2007Section 10(1)
  • Employment Act, 2007Section 10(3)(a)(i)
  • Employment Act, 2007Section 10(7)
  • Employment Act, 2007Section 74(1)(f)

Cases cited (6)

  • Coca-Cola East Central Africa Limited Vs Maria Kagai Ligaga
    (2015) eKLR
  • Kenneth Kimani Mburu & Another -V- Kibe Mungai Holdings Limited
    (2014) eKLR
  • Godfrey Julius Ndumba Mbogori & Another -V- Nairobi City County
    (2018) eKLR
  • Nathan Ogada Atiagaga -V- David Engineering Limited
    Cause No. 419 of 2014
  • Maria Kagai Ligaga vs. Coca Cola East and Central Africa Limited
    Cause Number 611 [N] of 2009 [unreported]
  • Milton M Isanya vs Aga Khan Hospital
    (2017) eKLR
Jurisdiction invoked
First-instance employment cause under the Employment Act, 2007 (Court's jurisdiction as employment and labour relations court; no specific constitutional provision cited)

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, "David Nelson Miseda v Seven Seas Technology Limited [2019] KEELRC 729 (KLR)", Case Analysis (2019). Cause No 1588 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/729/eng@2019-09-27

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