Shibira v Board of Directors Vihiga County Farmers Sacco Society (Cause 78 of 2021) [2023] KEELRC 190 (KLR)
The bottom line
#A Kenyan court ruled an employer cannot suspend an employee indefinitely without pay, awarding the worker nearly nine years of salary arrears.
What this practically means
#Executive summary
#Key legal issues
#Whether indefinite suspension without pay was contrary to fair labour practices
The indefinite suspension without pay was unfair labour practice, wrong and irregular; the Claimant was entitled to salary for the whole suspension period up to judgment
Relying on Philemon Musembi Muhindi, the court held that where no contractual or statutory basis exists for withholding salary during suspension, the employer must pay. The employer should have terminated employment rather than leave the employee in limbo, tied to return to work on conditions of refunding money. The Respondent's reliance on section 92(5) of the Public Finance and Management Act did not provide a legal basis for the suspension.
Whether the Claimant was entitled to reinstatement
Reinstatement refused; constructive dismissal found and only notice pay awarded for the misconduct
The claimant was still an employee, making reinstatement misplaced. Taking money without authority was gross misconduct under section 44(4)(g) of the Employment Act, betraying the employer's trust. Given the lapse of 8 years and 9 months and the broken trust, ordering return to work would be unreasonable, so the court found constructive dismissal and awarded only one month's notice pay per the appointment letter.
Whether the counterclaim for the IOU sum of KES 118,157/- should be granted
Counterclaim granted for full payment of KES 118,157/-, set off from the salary arrears, without costs
The Claimant's letter of 28 March 2014 was an unequivocal admission of having taken the money without approval. Since the employment relationship had broken down and instalment repayment would be unfair, the court ordered full payment of the owed sum, effected as a set-off from the salary arrears awarded to the Claimant, and declined costs on the counterclaim.
Legal principles established
#- Indefinite suspension of an employee without pay, absent contractual or statutory basis, amounts to unfair labour practice and the employee remains entitled to salary during the suspension
- Unless varied by statute or contract, the employer's obligation to pay wages continues even during suspension
- An employee who takes money from the employer without authority commits gross misconduct under section 44(4)(g) of the Employment Act justifying summary dismissal with notice pay only
Court orders
#- 1.Declaration that the indefinite suspension of the claimant without pay amounted to unfair labour practice
- 2.Notice pay of KES. 27,942/-
- 3.Salary arrears for the entire period of suspension up to judgment date, April 2014 to 26th January 2023, totalling KES 2,957,345.23, payable less PAYE, less the debt of KES 118,157 awarded under the counterclaim, and less any outstanding SACCO loan, salary advances or loans including accrued interest
- 4.Interest at court rates on the award of KES 2,957,345.23/- less KES 118,157/- from the date of judgment until payment in full
- 5.The Claimant awarded costs of the claim
- 6.The Respondent to issue the Claimant with a certificate of service pursuant to section 51 of the Employment Act
- 7.Stay granted for 30 days
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations disputes
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shibira v Board of Directors Vihiga County Farmers Sacco Society (Cause 78 of 2021) [2023] KEELRC 190 (KLR)", Case Analysis (2023). ELR Cause No. 78 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/190/eng@2023-01-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.