John Kahara Timani Njihia v Xplico Insurance Co. Ltd [2020] KEELRC 1192 (KLR)
The bottom line
#A Kenyan court ruled that an employer who cuts pay and stops paying salary without consulting can force a resignation that counts as unfair dismissal.
What this practically means
#Executive summary
#Key legal issues
#Date of resignation
The claimant resigned officially on 14.8.2017 by letter, not on 10.8.2017 by WhatsApp message
The WhatsApp message of 7.8.2017 merely expressed an intention to deliver a resignation letter, not a resignation. The CEO's letter of 10.8.2017 purporting to accept the resignation was premature as he was not privy to the WhatsApp correspondence. RW2 admitted the only official communication of resignation was the letter of 14.8.2017.
Whether the resignation amounted to constructive dismissal
Yes - the unilateral reduction of salary, conversion of permanent employment to a 3-month contract and non-payment of salary constituted fundamental breach amounting to constructive dismissal
The employer failed to pay salary from April to July 2017, a fundamental breach. It also unilaterally converted the permanent and pensionable contract to a 3-month contract and reduced salary from Kshs. 320,000 to Kshs. 150,000 without allowances. The burden lay on the employer to prove consultation, which it failed to discharge.
Unfair termination under section 45 of the Employment Act
The constructive dismissal was unfair; the respondent never discharged the burden of proving valid reason and fair procedure
Under section 45(2) the employer must prove a valid and fair reason and fair procedure. The respondent made no effort to discharge this burden. It also never used the alleged underwriting malpractices as grounds for dismissal, instead frustrating the claimant's terms until he resigned.
Respondent's counterclaim
Counterclaim dismissed except the motor vehicle claim; the certificate loss claim failed as unproved special damages
The value of unaccounted certificates was not pleaded specifically and witnesses contradicted on the value. Even if pleaded and proved, there was no evidence the claimant lacked authority when he authorised the reallocation, and the memo barring allocation postdated the issuance.
Legal principles established
#- The burden of proving that an employee was consulted before a change of terms and conditions of service lies with the employer
- Constructive dismissal is established where the employer's conduct makes the working conditions so intolerable that the employee feels compelled to leave; the test is repudiatory breach viewed objectively, with the burden on the employee
- Special damages must be specifically pleaded and proved
- Termination is unfair under section 45(2) of the Employment Act if the employer fails to prove a valid and fair reason and a fair procedure
Court orders
#- 1.Judgment entered for the claimant: one month salary in lieu of notice Kshs. 320,000; compensation of six months' salary for unfair termination; leave pay of Kshs. 529,230.76; total Kshs. 2,769,230.76 less statutory deductions
- 2.Award to attract costs and interest from the date of judgment
- 3.Salary for August 2017 awarded up to date of resignation on 14.8.2017 at Kshs. 320,000 x 14/26
- 4.Claimant's claims for leave allowance, transfer allowance and domestic package dismissed for lack of evidence
- 5.Respondent's counterclaim dismissed save for the claim regarding motor vehicle KCA 472H, which is to be released to the respondent upon payment of the claimant's terminal dues
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (unfair termination and constructive dismissal claim; counterclaim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kahara Timani Njihia v Xplico Insurance Co. Ltd [2020] KEELRC 1192 (KLR)", Case Analysis (2020). Cause No. 1766 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1192/eng@2020-04-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.