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ELRCPartially AllowedCause No. 167 of 2016 (as amended on 18th May 2017)· [2021] KEELRC 1120 (KLR)

Joseph M. Kivilu v Kenya National Examination Council [2021] KEELRC 1120 (KLR)

Employment and Labour Relations Court
6 August 2021
7,398 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled that KNEC constructively dismissed its CEO by suspending him indefinitely without pay, awarding him over Kshs 9.5 million.

What this practically means

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Executive summary

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The Claimant, formerly Chief Executive Officer of the Kenya National Examinations Council, was suspended on 29th March 2016 over alleged 2015 national examination malpractices. He answered a show cause letter on 12th April 2016 but no disciplinary hearing was ever convened. He was arrested and required to report weekly to the CID, which requirement was dropped after the CID indicated KNEC had provided no supporting evidence. Kept on suspension for almost one year without salary (only house allowance) and without an alimentary allowance, he resigned on 24th March 2017 and claimed constructive dismissal. By a partial consent the parties settled gratuity, leave allowance, salary withheld during suspension and outstanding 97.5 leave days, leaving leave computation, notice pay, compensation, aggravated damages and certificate of service for determination. Justice Maureen Onyango applied the Coca Cola v Lugaga constructive dismissal test and found that the Respondent's indefinite suspension contrary to its own HR Manual's six-month cap, the unproven ongoing investigations, the arrest without charge and the failure to progress the disciplinary process amounted to a repudiatory breach entitling the Claimant to repudiate the contract; constructive dismissal was proved. The court awarded Kshs.1,755,000 for 97.5 leave days computed on 20 working days per month at basic pay, Kshs.1,566,000 as three months' pay in lieu of notice on gross salary, and maximum compensation of Kshs.6,264,000, factoring in the Claimant's six years' exemplary service, his senior position and the publicity of his arrest. Aggravated damages were declined as the Rookes v Barnard categories were not established. The court ordered a certificate of service, costs to the Claimant, and interest on the decretal sum from judgment, except leave pay which attracts interest from filing of suit. The suit succeeded partially, the aggravated damages head failing.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Yes. The indefinite suspension for almost one year without pay, contrary to the six-month cap in the KNEC Human Resource Manual, non-payment of alimentary allowance, arrest without charge and failure to progress the disciplinary process constituted a repudiatory breach entitling the Claimant to resign.

Reasoning

The court applied the Coca Cola East & Central Africa Ltd v Maria Kagai Lugaga test: essential terms of the contract, repudiatory breach, objective evaluation of the employer's conduct, causation and burden on the employee. The letter of appointment and the suspension letter both referenced the HR Manual, defeating the Respondent's claim that the Manual did not apply to the CEO. The Respondent did not controvert that no disciplinary hearing was ever convened and gave no proof of active police investigations. The resignation was therefore not voluntary but a response to the employer's conduct.

p. 13
02

Whether the Human Resource Manual applied to the Claimant as CEO

Holding

Yes. Both the letter of appointment (paragraph 20) and the letter of suspension expressly referenced the KNEC Human Resource Manual and Act, so the six-month cap on suspension in clause 12.29.1 applied to the Claimant.

Reasoning

The Respondent argued the Manual could not bind the CEO who was in charge of executing it. The court rejected this as unfactual because the Claimant's letter of appointment stated he would be subject to KNEC Staff Rules and Regulations, and the suspension letter expressly premised the suspension on the KNEC Act Section 16(1) and (2) and the KNEC Human Resource Policy and Procedures Manual. Clause 12.29.1 caps suspension at six months, and the suspension of 29 March 2016 ran until the resignation on 24 March 2017.

p. 13
03

The correct formula for commutation of accrued leave days

Holding

Leave pay is computed on working days per month (20 for the Claimant) and on basic salary, yielding Kshs.1,755,000 for 97.5 days.

Reasoning

Section 28 of the Employment Act provides for annual leave with full pay expressed in working days, so conversion to cash is based on working days per month and basic pay, with reference to Rule 6 of the Regulations of Wages (General Order) under the Labour Institutions Act. This rejected both the Respondent's 30-day month computation (Kshs.1,170,000) and the Claimant's forward-spreading computation (Kshs.2,458,451.60).

p. 14
04

Whether aggravated damages were payable

Holding

No. The categories for punitive damages (oppressive/arbitrary/unconstitutional state action, profit-seeking conduct, or statutory authorisation) were not established, and the anguish was already compensated in the maximum compensation award.

Reasoning

Following Rookes v Barnard as adopted by the Court of Appeal in D.K. Njagi Marete v Teachers Service Commission and Godfrey Julius Ndumba Mbogori & another v Nairobi City County, exemplary damages punish and deter rather than compensate. The court found no deliberate oppressive, arbitrary or unconstitutional action by the Respondent and no calculated conduct, and considered that the anguish of the disciplinary process was already factored into the maximum compensation under Section 49 of the Employment Act.

p. 15
05

Entitlement to notice pay, compensation and certificate of service on constructive dismissal

Holding

Having been constructively dismissed, the Claimant was entitled to three months' pay in lieu of notice (Kshs.1,566,000 on gross salary), maximum compensation of Kshs.6,264,000, and a certificate of service under Section 51 of the Employment Act.

Reasoning

The letter of appointment provided for three months' notice or pay in lieu, computed on gross salary of Kshs.522,000. In assessing compensation the court considered the violation of the Respondent's own regulations, the arrest without charge, the suspension without pay for almost a year without communication, the Claimant's six years of exemplary service, his senior position and the publicity surrounding his arrest and suspension, warranting the maximum award. Section 51 entitles an employee to a certificate of service.

p. 14

Legal principles established

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  • Constructive dismissal, though not expressly provided for in the Employment Act, is settled in Kenyan jurisprudence and is proved by showing the employer's conduct was a repudiatory breach going to the root of the contract, judged objectively, with causation, and the burden lies on the employee.
  • An employer who suspends an employee indefinitely contrary to its own Human Resource Manual, and fails to progress a disciplinary process, subjects the employee to such hardship as to justify repudiation of the contract.
  • Leave is earned on working days and commutation of accrued leave into cash is based on working days per month and basic pay.

Court orders

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  1. 1.Judgment for the Claimant on the finding of constructive dismissal
  2. 2.Award of Kshs.1,755,000 in lieu of the outstanding 97.5 annual leave days
  3. 3.Award of Kshs.1,566,000 as pay in lieu of notice
  4. 4.Award of Kshs.6,264,000 as maximum compensation for constructive dismissal
  5. 5.The Respondent is directed to issue the Claimant with a certificate of service in terms of Section 51 of the Employment Act if not yet done
  6. 6.Costs of the suit awarded to the Claimant
  7. 7.Interest to accrue on the decretal sum from the date of judgment, except pay in lieu of leave which shall attract interest from the date of filing of suit

Authorities

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Legislation

  • Constitution of Kenya 2010Articles 41, 42, 47, 50(2)(e)
  • Employment ActSections 28, 43, 45, 49, 51
  • Kenya National Examinations Council Act, No. 29 of 2012Section 16(1), (2) and (3)
  • Civil Procedure ActSection 27
  • Regulations of Wages (General Order) under the Labour Institutions ActRule 6
  • English Employment Rights Act 1996constructive dismissal definition

Cases cited (11)

  • Kenya Union of Commercial Food and Allied Workers v MEC Sacco Society Limited
    Cause No. 167 of 2014
  • Davis Gitonga v Judicial Service Commission
    Petition No. 116 of 2018
  • Kenneth Kimani Mburu & another v Kibe Muigai Holdings Limited
    Cause No. 339 of 2011
  • Humphrey Sitati v Board of Management, Lenana School
    Cause No. 370 of 2018
  • Simon Ngugi Kamau v Silpack Industries Limited
    [2015] eKLR
  • D.K. Njagi Marete v The Teachers Service Commission
    [2020] eKLR
  • Coca Cola East & Central Africa Limited v Maria Kagai Lugaga
    [2015] eKLR
  • Western Excavating ECC Ltd v Sharp
    (1978) 2 WLR 344
  • Rookes v Barnard
    [1964] AC 1129
  • Godfrey Julius Ndumba Mbogori & another v Nairobi City County
    [2018] eKLR
  • Obonyo and Another v Municipal Council of Kisumu
Jurisdiction invoked
Article 162(2) of the Constitution of Kenya 2010 (Employment and Labour Relations Court); claims founded on Articles 41, 42 and 47 of the Constitution and the Employment Act

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, "Joseph M. Kivilu v Kenya National Examination Council [2021] KEELRC 1120 (KLR)", Case Analysis (2021). Cause No. 167 of 2016 (as amended on 18th May 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1120/eng@2021-08-06

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