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ELRCDismissedCause No 1518 of 2017· [2023] KEELRC 106 (KLR)

Andika v Soloh World Inter-Enterprises Limited (Cause 1518 of 2017) [2023] KEELRC 106 (KLR)

Employment and Labour Relations Court
20 January 2023
SRStella Rutto
2,980 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 an internal memo is not a promise of pay, and an employee who retires without citing any breach cannot claim constructive dismissal.

What this practically means

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Executive summary

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The claimant, formerly employed by the respondent as a machine operator from August 1, 2007 and later promoted to Senior Production Supervisor, claimed Kshs 323,582.00 being severance pay of Kshs 300,764.00 and unpaid leave of Kshs 22,836.00. He alleged that unbearable working conditions, including conflicting instructions from the company's director couple, forced him into early retirement in 2015, and that as a condition of amicable exit the respondent undertook to pay him a retirement package computed in an internal memo from the Human Resource Officer to the CEO. The respondent denied any early retirement package existed, contended the claimant resigned voluntarily after failing to cope with his supervisory role, and asserted his dues were fully paid. The court framed two issues: whether the early retirement was forced, and whether the reliefs were due. Applying the Court of Appeal's principles in Coca Cola East & Central Africa Limited v Maria Kagai Lugaga, the court held that the claimant failed to prove constructive dismissal on a balance of probability: his retirement letter thanked the respondent and cited no breach, and he had the option of remaining employed in another section. The court further distinguished severance pay (payable on redundancy under section 40(1)(g) of the Employment Act) from service pay (section 35(5)), following Hema Hospital v Wilson Makongo Marwa. It found the internal memo, though bearing approval signatures, was an internal document not addressed to the claimant and never constituted an offer or undertaking to pay. The claim was dismissed in its entirety with no orders as to costs.

Key legal issues

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01

Whether the claimant's early retirement was forced by the respondent (constructive dismissal)

Holding

The claimant did not establish constructive dismissal; his early retirement was voluntary as he had the option of remaining employed in another section and did not cite any breach in his retirement letter

Reasoning

The court applied the Coca Cola East & Central Africa Ltd v Maria Kagai Lugaga principles. The claimant's retirement letter thanked the respondent and laid no blame. He was given options including deployment to another section, so leaving was not inevitable. No repudiatory breach or causal link between the respondent's conduct and his exit was proved on a balance of probability.

p. 5
02

Whether the claimant is entitled to severance pay and unpaid leave

Holding

Claim failed; the internal memo computing terminal dues was an internal document not addressed to the claimant and never constituted an offer or express undertaking to pay

Reasoning

The court distinguished severance pay (section 40(1)(g), redundancy) from service pay (section 35(5)). The internal memo, though bearing approval signatures of the head of finance, CEO and director, was for internal consumption and never elicited an offer to the claimant. Without an express offer or undertaking, the claim on the memo's figures could not stand.

p. 6

Legal principles established

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  • Constructive dismissal arises where there has been repudiation of a fundamental term of the employment contract, with the burden of proof on the employee to establish a causal link between the employer's conduct and the termination
  • Severance pay is payable only on redundancy under section 40(1)(g) of the Employment Act, while service pay is payable under section 35(5); an internal memo containing approval signatures does not constitute an offer or undertaking enforceable by an employee to whom it was not addressed

Court orders

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  1. 1.The claim is dismissed in its entirety with no orders as to costs

Authorities

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Legislation

  • Employment Actsection 40(1)(g)
  • Employment Actsection 35(5)
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B

Cases cited (5)

  • Western Excavating (ECC) Ltd v Sharp
    (1978) ICR 222
  • Coca Cola East and central Africa Limited v Maria Kagai Ligaga
    (2015) eKLR
  • Samuel Mbugua Kang'ethe v University Council Inorero University
    (2016) eKLR
  • Gedeon Ikengu Ng'ang'a v Hon Attorney General
    (2013) eKLR
  • Hema Hospital v Wilson Makongo Marwa
    [2015] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (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, "Andika v Soloh World Inter-Enterprises Limited (Cause 1518 of 2017) [2023] KEELRC 106 (KLR)", Case Analysis (2023). Cause No 1518 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/106/eng@2023-01-20

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