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ELRCPartially AllowedCause No. 92 of 2015 (Consolidated with Cause No. 91 of 2015)· [2020] KEELRC 1633 (KLR)

Thomas Olum Miyago & another v S.C Johnson & Son Kenya Limited [2020] KEELRC 1633 (KLR)

Employment and Labour Relations Court of Kenya
14 January 2020
HWHellen S. Wasilwa
4,997 words in judgment
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The bottom line

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Kenya's Employment Court ruled that forced resignations dressed up as 'mutual separations' were actually unfair constructive dismissals, awarding two senior employees millions in compensation.

What this practically means

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Executive summary

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Two claimants, Thomas Olum Miyago (Quality Controller, 21 years' service) and Samuel Masaka Mliwa (Cost Accountant, 17 years' service), sued S.C Johnson & Son Kenya Limited alleging constructive dismissal. Both had been employed by predecessor companies (Kiwi Brands, then Sara Lee Corporation) acquired by the Respondent. Each was placed on a Performance Improvement Programme in 2014 following performance appraisals, then presented with mutual separation agreements and pressed to resign; both resigned in late 2014 and received terminal dues, from which loan deductions were made. The two causes were consolidated on 19th June 2017. The Respondent maintained that the Claimants' performance was poor, the PIP process followed its grievance manual, and the resignations were voluntary, disentitling them to relief. The court, Wasilwa J, framed three issues: whether the Claimants were constructively terminated or resigned voluntarily; whether any termination was fair; and the remedies. Applying the Supreme Court of Canada's decision in David Potter v New Brunswick Legal Aid Services Commission, the court found the email exchanges requiring resignation letters as a condition of the separation agreements, and threats of a Board of Inquiry, proved the resignations were forced. It held the terminations were constructive, unfair and unjustified for want of due process. Remedies were however moderated: one month's notice pay, house allowance limited to the three years preceding termination (earlier years time barred), unpaid leave for Mliwa, and 10 months' salary as compensation for each Claimant, less statutory deductions, with costs and interest to the Claimants.

Key legal issues

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01

Whether the Claimants were constructively terminated or resigned voluntarily

Holding

The resignations were not voluntary; the Respondent constructively terminated the Claimants

Reasoning

The court examined email exchanges showing the Claimants were told their separation agreements would only take effect if accompanied by resignation letters, and that failure to resign would lead to a Board of Inquiry and disciplinary action. The mutual separation agreements themselves contained resignation clauses. These successive acts - PIPs, threats of disciplinary action, and conditioned resignations - showed the Respondent intended no longer to be bound by the employment contracts, forcing the resignations. The court adopted the two-branch test for constructive dismissal from David Potter v New Brunswick Legal Aid Services Commission.

p. 7
02

Whether the constructive termination was fair and justified

Holding

The termination was unfair and unjustified

Reasoning

Having found constructive termination, the court reasoned that the Claimants were never subjected to due process - no disciplinary hearing or fair procedure preceded the forced resignations. The absence of due process rendered the terminations unfair and unjustified under employment law standards.

p. 7
03

Whether the Claimants are entitled to the remedies sought

Holding

Entitled to remedies, but reduced: 1 month's notice pay, house allowance limited to the last 3 years, unpaid leave (for Mliwa) and 10 months' compensation each

Reasoning

The court awarded notice pay of one month rather than three, house allowance only for the three years preceding termination since earlier years were time barred, and compensation of 10 rather than 12 months' salary. The claims for Zambia work compensation and off-day pay were not awarded in the final remedies.

p. 8

Legal principles established

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  • A constructive dismissal occurs where the employer does not expressly threaten or desire to terminate employment but foments circumstances to the extent that the employee tenders resignation
  • A resignation accompanied by a requirement that the employee present a resignation letter as a condition of a separation agreement is evidence that the resignation was forced and not voluntary

Court orders

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  1. 1.For Samuel Masaka Mliwa: 1 month salary in lieu of notice of Kshs. 203,099
  2. 2.For Samuel Masaka Mliwa: house allowance for the last 3 years at 15% of salary for 36 months of Kshs. 1,096,734.6
  3. 3.For Samuel Masaka Mliwa: unpaid leave for 21 days of Kshs. 163,495
  4. 4.For Samuel Masaka Mliwa: 10 months salary as compensation for unfair and unlawful termination of Kshs. 1,030,990
  5. 5.For Thomas Miyago: 1 month salary in lieu of notice of Kshs. 215,248
  6. 6.For Thomas Miyago: house allowance for the last 3 years at 15% of salary for 36 months of Kshs. 1,116,339.2
  7. 7.For Thomas Miyago: 10 months' salary as compensation for unfair and unlawful termination of Kshs. 2,152,480
  8. 8.Awards to be paid less statutory deductions
  9. 9.Respondent to pay costs of the case plus interest at Court rates from the date of judgment

Authorities

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Legislation

  • Code of Practice & Grievance Procedure Manualclauses 8 & 9

Cases cited (1)

  • David Potter versus New Brunswick Legal Aid Services Commission
    2015 SCC 10
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations claims (Employment and Labour Relations Court Act; Employment Act reliefs)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Thomas Olum Miyago & another v S.C Johnson & Son Kenya Limited [2020] KEELRC 1633 (KLR)", Case Analysis (2020). Cause No. 92 of 2015 (Consolidated with Cause No. 91 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1633/eng@2020-01-14

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