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ELRCPartially AllowedNairobi ELRC (not stated in judgment)· [2021] KEELRC 925 (KLR)

Meshack Mutilangi v Mustek East Africa Limited [2021] KEELRC 925 (KLR)

Employment and Labour Relations Court of Kenya
17 September 2021
4,823 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled an employer constructively dismissed its employee by changing his contract without consultation, and must pay over Kshs. 345,000 plus costs.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a service technician by an appointment letter dated 1st August 2014 at a gross salary of Kshs. 20,000, resigned on 7th April 2016 alleging constructive dismissal. He complained that a 1st August 2015 'Employee Contract Amendment' imposed new sales targets and penalty deductions without consultation, that salary deductions of about Kshs. 11,000 over two months were unlawful, that he had no job description and was assigned duties in sales and marketing outside his skills, that the Managing Director habitually insulted and abused him, that he was forced to work unpaid overtime, and that he was denied leave and terminal dues. The Respondent filed a defence and counterclaim of Kshs. 42,500 for lack of notice, but neither it nor its counsel attended the hearing on 26th July 2021 despite service; its case was deemed closed and the counterclaim was dismissed for want of prosecution. Applying Coca Cola East and Central Africa v Maria Kagai Ligaga, Western Excavating v Sharp and South African authority, the court held that the unilateral, unconsulted variation of the contract, the unlawful deductions contrary to section 19 of the Employment Act, and the abusive conduct of the Managing Director amounted to a repudiatory breach going to the root of the contract, establishing constructive dismissal. Judgment was entered for the Claimant with a declaration of constructive dismissal, seven months' gross salary (Kshs. 297,500) as compensation under section 49, Kshs. 22,000 for deducted wages, Kshs. 25,500 for eighteen untaken leave days, a certificate of service, interest, and costs of the suit and counterclaim. Service pay and one month's pay in lieu of notice were refused. Judgment was delivered online under the Covid-19 court directions.

Key legal issues

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01

Effect of the Respondent's failure to testify

Holding

The unprosecuted counterclaim was dismissed for want of prosecution; the claimant's evidence was left uncontroverted but the court still had to interrogate it rather than grant judgment automatically.

Reasoning

The Respondent filed a defence, counterclaim and witness statement but called no witness. The court, citing its own decision in Lydia Moraa Obara v Tusker Mattresses and the authorities relied on by the Claimant, held that pleadings without evidence remain mere allegations, but that the court retains a duty to test uncontroverted evidence against the balance of probabilities before granting relief.

p. 4
02

Whether the claimant was constructively dismissed

Holding

Yes. The unilateral amendment of the contract, unlawful salary deductions, and insults and abuses by the Managing Director amounted to a repudiatory breach going to the root of the contract.

Reasoning

Applying Coca Cola East and Central Africa v Maria Kagai Ligaga and Western Excavating v Sharp, the court found the 1st August 2015 contract amendment was imposed without consultation, its target-and-penalty terms were oppressive, salary deductions contravened section 19(1)(g) of the Employment Act, and the abusive working environment was uncontroverted. The cumulative conduct was a fundamental breach entitling the claimant to resign.

p. 6
03

Entitlement to reliefs

Holding

Compensation of seven months' gross salary under section 49, Kshs. 11,000 proved deductions, Kshs. 25,500 for 18 untaken leave days, and a certificate of service; service pay and notice pay refused.

Reasoning

Compensation was assessed under section 49. The deductions claim, being in the nature of special damages, was awarded only as specifically proved by the payslips. Leave was computed from the Respondent's own approved leave application forms. Service pay was barred by section 35(5) because the claimant was an NSSF member, and notice pay was unavailable in a constructive dismissal where the employee is treated as the terminating party.

p. 6

Legal principles established

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  • Unilateral variation of an employment contract without the employee's consultation or consent is unlawful, amounts to breach of contract or repudiation, and where accepted by resignation may constitute constructive dismissal
  • Uncontroverted evidence does not automatically prove a claim; the court must still interrogate the truthfulness of the claimant's evidence
  • Deducting an employee's salary for failure to meet targets where the employer has a direct interest in the proceeds is an unlawful deduction under section 19 of the Employment Act

Court orders

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  1. 1.A declaration that owing to the conduct of the Respondent that amounted to a repudiatory breach, constructive dismissal occurred
  2. 2.The Respondent shall pay the Claimant compensation in the sum of Kshs. 297,500, being seven months gross salary, pursuant to Section 49[c] of the Employment Act, 2007
  3. 3.Deducted wages Kshs. 22,000
  4. 4.Annual leave pay Kshs. 25,500
  5. 5.A certificate of service shall issue in accordance with the provisions of section 51 of the Employment Act, 2007
  6. 6.Interest on the compensation, deducted wages and annual leave pay from the date of filing the suit till full payment
  7. 7.Costs of this suit and counter claim to the Claimant
  8. 8.The Respondent's counterclaim of Kshs. 42,500 dismissed for want of prosecution

Authorities

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Legislation

  • Employment Act, 2007Section 10 (including sections 10[2] and 10[5])
  • Employment Act, 2007Section 19 (including section 19[1] and 19[1][g])
  • Employment Act, 2007Section 27
  • Employment Act, 2007Section 35 (including section 35[5])
  • Employment Act, 2007Section 49 (including section 49[c])
  • Employment Act, 2007Section 51
  • Evidence ActSections 107 and 108 (quoted within authorities)
  • ELRC Procedure RulesRule 28(3)

Cases cited (15)

  • Peter Ngigi Kuria & Another (suing as the legal representative of the Estate of Joan Wambui Ngigi) v Thomas Ondili Oduol & Another
    [2019] eKLR
  • Shaneebal Limited v County Government of Machakos
    [2018] eKLR
  • Trust Bank Limited vs Paramount Universal Bank Limited & 2 others
  • Interchemie EA Limited vs Nakuru Veterinary Centre Limited
    Nairobi (Milimani) HCCC No. 165B of 2000
  • Kenya Power and Lighting Company Limited v Nathan Karanja Gachoka & another
    [2016] eKLR
  • Coca Cola East and Central Africa Ltd vs Maria Kagai Ligaga
    [2015] eKLR
  • Carolyne L Musonye vs Panari Hotel Ltd
    [2017] eKLR
  • Kennedy Mutua –vs Madison Insurance Company (K) Ltd
    [2020] eKLR
  • Lydia Moraa Obara v Tusker Mattresses Limited
    Nairobi ELRC No. 1391 of 2019
  • Jooste v Transnet Ltd
    [1995] 5 BLLR 1 [LAC]
  • Pretoria Society for the Care of the Retarded v Loots
    [1997] 6 BLLR 721 [LAC]
  • Western Excavating [ECC] Ltd -v- Sharp
    [1978] QB 761
  • James Ang'awa Atanda & 10 others v Judicial Service Commission
    [2017] eKLR
  • Rigby v Ferodo Ltd
    [1987] IRLR 516
  • Security and Facilities Division v Hayes
    [2001] IRLR 81
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (reliefs granted under sections 19, 27, 35, 49 and 51 of the Employment Act, 2007)

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, "Meshack Mutilangi v Mustek East Africa Limited [2021] KEELRC 925 (KLR)", Case Analysis (2021). Nairobi ELRC (not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/925/eng@2021-09-17

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