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ELRCPartially AllowedNot stated in the judgment· [2022] KEELRC 202 (KLR)

John Bosco Mwanzia Mwangangi v Nusu Nusu Production Limited [2022] KEELRC 202 (KLR)

Employment and Labour Relations Court
21 April 2022
2,919 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled an employer who forced an accountant to sign a harsh new contract constructively dismissed him, but awarded only one month's salary.

What this practically means

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Executive summary

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The claimant, employed by the respondent as an Accountant from 1st February 2012, resigned on 4th November 2015 after the respondent required him to sign a new contract placing him on six months' probation despite over 3½ years of service, with an email threatening termination if he refused. He sued seeking a declaration that the forced resignation was wrongful, reinstatement or damages of Kshs 51,121,151, exemplary damages, interest and costs. The respondent denied forcing the resignation and counterclaimed Kshs 4,792,418.39 for unreturned passwords, reconstructed accounts, a personal credit card charge and unaccounted cash receipts. The court framed three issues: constructive dismissal versus voluntary resignation, entitlement to reliefs, and proof of the counterclaim. Applying the Court of Appeal's approval in Coca Cola v Ligaga of Lord Denning's test in Western Excavating v Sharp, the court held the respondent's unilateral introduction of materially altered contractual terms was a fundamental breach, and found the claimant was unlawfully and unfairly constructively dismissed in violation of Sections 35, 41, 43, 44, 45 and 46 of the Employment Act. However, the claimant's blatant refusal to hand over contributed to non-payment of his dues, so only one month's salary (Kshs 177,504) was awarded as compensation, with interest and costs; reinstatement, exemplary damages and other reliefs were refused. The counterclaim failed because special damages were not proved by documentary evidence. Judgment was delivered online pursuant to COVID-19 directions.

Key legal issues

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01

Whether the claimant was constructively dismissed or voluntarily resigned

Holding

The claimant was unlawfully and unfairly constructively dismissed for no valid reason and without a fair procedure.

Reasoning

The respondent demanded the claimant sign a fresh contract imposing six months' probation despite over 3½ years of service under an existing written appointment, threatening termination on refusal. The court found this a fundamental breach going to the root of the contract, applying Coca Cola v Ligaga and Lord Denning's test in Western Excavating v Sharp, proved on a balance of probabilities under Sections 107–109 of the Evidence Act.

p. 4
02

What compensation the claimant is entitled to

Holding

Only one month's salary as compensation under Section 49(1)(c) and (4) of the Employment Act, despite the unfair dismissal, because the claimant's refusal to hand over contributed to non-payment of his dues.

Reasoning

The claimant served 3½ years, faced no disciplinary process, and lost his job without terminal benefits, favouring compensation. However, his intransigent refusal to hand over contributed to the non-payment of dues. Balancing these, the court awarded the equivalent of one month's salary (Kshs 177,504) rather than the massive sums claimed.

p. 4
03

Whether the respondent proved its counterclaim

Holding

The counterclaim of Kshs 4,792,418.39 failed for want of proof of special damages.

Reasoning

Special damages must be specifically proved with documentary evidence. R.W.1 produced no documents evidencing the claimed expenses for password recovery, credit card repayment, lost data reconstruction, or unaccounted cash receipts, and she had no personal knowledge, having joined after the claimant left. No police report was made on the alleged fraud. The counterclaim was therefore dismissed.

p. 4

Legal principles established

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  • Ingredients of constructive dismissal: intolerable conditions over time with failed remedial attempts, or fundamental breach of contract going to the root of the employment, proved by sufficient oral and/or documentary evidence.
  • An employer's unilateral introduction of a new contract materially altering terms (including fresh probation despite long service) constitutes fundamental breach entitling the employee to treat himself as constructively dismissed.

Court orders

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  1. 1.One-month salary in compensation for the unlawful and unfair constructive dismissal in the sum of Kshs 177,504.
  2. 2.Interest at Court rates from date of judgment till payment in full.
  3. 3.Costs of the suit to the claimant.
  4. 4.The Counterclaim is dismissed.

Authorities

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Legislation

  • Employment ActSections 35, 41, 43, 44, 45, 46
  • Employment Act, 2007Section 49(1)(c) and (4)
  • Evidence Act, Cap 80, Laws of KenyaSections 107, 108, 109
  • Civil Procedure RulesOrder 21 rule 1
  • Civil Procedure ActSection 18
  • Constitution of KenyaArticles 159(2)(d), 48

Cases cited (3)

  • Coca Cola East & Central Africa Limited v. Maria Kagai Ligaga
  • Western Excavating (ECC) Ltd. -v- Sharp
    [1978] ICR 222 or [1978] QB 761
  • Nottingham County Council -v- Meikle
    (2005) ICR 1
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (first-instance employment claim)

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, "John Bosco Mwanzia Mwangangi v Nusu Nusu Production Limited [2022] KEELRC 202 (KLR)", Case Analysis (2022). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/202/eng@2022-04-21

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