Sherry v Children Transformation Project (K) (Cause 439 of 2017) [2022] KEELRC 1429 (KLR)
The bottom line
#A Kenyan court ruled that keeping an employee on and paying them after a contract expires creates a new employment contract, and suspending them indefinitely without a hearing counts as constructive dismissal.
What this practically means
#Executive summary
#Key legal issues
#Existence of a valid contract of service after expiry of the fixed-term contract
The continued payment of salary for two months after the contract lapsed created an implied renewal of the contract.
Both parties acknowledged that the last written contract expired on 30 April 2015, yet the Respondent retained the Claimant and paid her salary until her suspension on 24 June 2015. The only basis for suspending or disciplining an employee is an existing contract of service. Drawing on Lamb v Evans, the court inferred the implied contract the parties' conduct must have intended, and noted the employer's statutory duty under section 9(1) of the Employment Act to issue a written contract.
Whether indefinite suspension without a disciplinary hearing amounts to constructive dismissal
It does; the Claimant was constructively dismissed.
Applying Black's Law Dictionary and Western Excavating (ECC) Ltd v Sharp, the court held that constructive dismissal arises from a breach going to the root of the contract. The Respondent's claim that it invited the Claimant to a disciplinary hearing was not proved, as no invitation letter was produced. The failure to adhere to disciplinary procedure, coupled with the indefinite suspension and absence of any termination letter, entitled the Claimant to treat herself as discharged, consistent with David M. Potter v New Brunswick Legal Aid Services Commission.
Reliefs for constructive/unfair dismissal
Constructive dismissal amounts to unfair dismissal attracting compensation under sections 49 and 50 of the Employment Act; one month's notice pay was also awarded.
The court found that constructive dismissal entitles the Claimant to compensation under sections 49 and 50 of the Employment Act, considering the 13 factors in section 49(4) as applied in Alphonce Maghanga Mwachanya v Operation 680 Limited. Given the Claimant's failure to provide a certificate of good conduct and the implied contract being one of three months, maximum compensation was not proved; three months' salary was awarded, plus one month's notice pay since no notice was issued.
Legal principles established
#- Where an employer continues to pay an employee's salary after expiry of a fixed-term contract, an implied contract of service arises.
- An indefinite suspension without adherence to disciplinary procedures amounts to a serious breach that the employee may treat as constructive dismissal.
Court orders
#- 1.A declaration that the Claimant was constructively dismissed.
- 2.Payment of one month's salary in lieu of notice at Kshs.12,912
- 3.Three months salary for unfair dismissal at Kshs.38,736
- 4.Costs of the suit and interest until payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Wachira v Proshade Kenya Limited (Cause E885 of 2021) [2024] KEELRC 2055 (KLR)[2024] KEELRC 2055 (KLR)23 Jul 2024
- Wachira v Proshade Kenya Limited (Cause E885 of 2021) [2024] KEELRC 2055 (KLR)[2024] KEELRC 2055 (KLR)23 Jul 2024
Cite this brief
#Cite this brief
Caselaw, "Sherry v Children Transformation Project (K) (Cause 439 of 2017) [2022] KEELRC 1429 (KLR)", Case Analysis (2022). Cause No. 439 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1429/eng@2022-06-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.