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ELRCPartially AllowedCause No 1004 of 2017· [2023] KEELRC 203 (KLR)

Nguku v Jubilee Insurance Company of Kenya Limited (Cause 1004 of 2017) [2023] KEELRC 203 (KLR)

Employment and Labour Relations Court
27 January 2023
7,143 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~29 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that resigning during a workplace investigation is not constructive dismissal, though unpaid terminal dues must be paid with interest.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 31st August 2006 and last serving as Claims Manager, sued for constructive dismissal, alleging harassment and intimidation arising from investigations into her undisclosed directorship in Ivory Health Solutions Ltd, a service provider of the respondent under a 2015 Service Agreement. She resigned on 8th and 9th December 2016 and sought declarations, 12 months' compensation, accrued leave, notice pay, a 2016 bonus, leave allowance, overtime for 14,996 days, general damages, interest and costs. The respondent denied harassment, contending the claimant failed to disclose her conflict of interest as required by the Code of Ethics Policy and resigned to evade disciplinary consequences. The court framed three issues: constructive dismissal, payment of terminal dues, and available reliefs. Applying the Coca Cola vs Ligaga principles, it held the claimant failed to prove a repudiatory breach or causal link; the employer was entitled to investigate fraud allegations notwithstanding its prior knowledge of her directorship, and resigning mid-investigation is not constructive dismissal. The post-resignation disciplinary hearing was declared of no consequence. However, the respondent proved payment of dues only by a pay slip, which the court held insufficient, finding the terminal dues unpaid. The claim was dismissed in its entirety except that the claimant was awarded her terminal dues with interest at court rates from the date of filing until payment in full. Claims for compensation, notice pay, bonus and overtime failed, and there were no orders as to costs.

Key legal issues

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01

Whether the claimant was constructively dismissed

Holding

No. The claimant failed to prove a repudiatory breach by the employer or the requisite causal link between the employer's conduct and her resignation; the investigations were justified and her resignation mid-investigation did not constitute constructive dismissal.

Reasoning

Applying the Coca Cola vs Ligaga principles, the court found no fundamental breach going to the root of the contract. The claimant's first resignation letter expressed gratitude and cited no harassment; her second letter only referenced investigations. The employer was entitled to investigate fraud allegations despite prior knowledge of her directorship. Her failure to make the policy-mandated disclosure of conflict of interest placed her at fault, so the investigation was a legitimate exercise, not intolerable conduct.

p. 12
02

Whether the claimant's terminal dues were paid

Holding

Yes, they were not paid; the claimant is entitled to them with interest.

Reasoning

The respondent exhibited only the claimant's December 2016 pay slip. Emails of January 2017 showed the claimant still following up on her dues, and RW1 conceded in cross-examination that the dues may not have been paid. If the dues had been paid, the respondent could easily have evidenced payment by cheque or bank transfer. In the absence of cogent evidence, the court concluded the terminal dues were unpaid.

p. 12
03

What reliefs are available to the claimant

Holding

Only terminal dues with interest; compensation, notice pay, bonus and overtime claims fail.

Reasoning

Having found no constructive dismissal, compensatory damages and notice pay could not be sustained. Untaken leave was acknowledged by the respondent and forms part of terminal dues. The bonus claim failed for lack of evidence, as did overtime for failure to prove excess hours worked, per the Rogoli Ole Manadiegi principle that the burden of establishing overtime rests with the employee.

p. 13

Legal principles established

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  • An employer is entitled to carry out investigations into any matter arising within the employment relationship; resigning in the middle of an investigation does not amount to constructive dismissal
  • Not every involuntary resignation amounts to constructive dismissal; a direct causal link with intolerable employer conduct must be proved
  • An employer's mere awareness of an employee's conflict of interest does not excuse the employee's failure to make the formal disclosure required by policy
  • A pay slip alone does not prove payment of terminal dues; the employer must produce cogent evidence such as a cheque or bank transfer
  • A disciplinary hearing convened after resignation is of no consequence since the employment relationship is already extinguished

Court orders

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  1. 1.The claim is dismissed in its entirety save that the claimant is entitled to payment of her terminal dues
  2. 2.Terminal dues to attract interest at court rates from the date of filing the suit until payment in full
  3. 3.No orders as to costs

Authorities

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Legislation

  • Evidence ActSections 107 and 109
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B

Cases cited (15)

  • Coca Cola East & Central Africa Limited vs Maria Kagai Ligaga
    [2015] eKLR
  • Western Excavating (ECC) Ltd -v- Sharp
    [1978] ICR 222 or [1978] QB 761
  • Nottingham County Council -v- Meikle
    (2005) ICR 1
  • John Kimingi vs Damco Logistics Kenya Limited
    (2021) eKLR
  • Leah Shigadi Sinoya vs Avtech Systems Limited
    (2017) eKLR
  • Nathan Ogada Atiagaga vs David Engineering Limited
    (2015) eKLR
  • Florence Nyaboke vs Mogere Amosi Ombui & 2 others
    (2014) eKLR
  • Edward Machuka Nyamora vs Kenya Animal Genetic Resource Centre
    (2018) eKLR
  • Geofirey Muriithi Muthee vs XPLICO Insurance Co. Limited
    (2022) eKLR
  • John Kimani Mwega vs Central Bank of Kenya & Board of Trustees of Central Bank Pension Fund
    (2019) eKLR
  • Sophie Muthoni Njagi vs Rift Valley Railways (Kenya) Limited
    (2020) eKLR
  • Stella W. Muraguri vs Edward Kamau Muriu & 4 others
    Cause 2027 of 2015
  • Patrick Lumumba Kimuyu vs Prime Fuels (K) Limited
    [2018] eKLR
  • Rogoli Ole Manadiegi vs General Cargo Services Limited
    (2016) eKLR
  • Ivory Health Solutions Ltd vs Jubilee Insurance Company of Kenya Ltd
    CMCC No. 3163 of 2017
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (referenced through Article 159(2)(d) and Article 48 of the Constitution in the delivery order); no specific provision pleaded

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, "Nguku v Jubilee Insurance Company of Kenya Limited (Cause 1004 of 2017) [2023] KEELRC 203 (KLR)", Case Analysis (2023). Cause No 1004 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/203/eng@2023-01-27

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