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ELRCPartially AllowedCause No 48 of 2018· [2023] KEELRC 870 (KLR)

Koech v Kenya Railways Corporation (Cause 48 of 2018) [2023] KEELRC 870 (KLR)

Employment and Labour Relations Court
14 April 2023
SRSTELLA RUTTO
3,851 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that suspending an employee indefinitely for 17 months without any update counts as constructive dismissal, awarding him nearly Kshs 4 million.

What this practically means

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Executive summary

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The claimant, interdicted on 19th June 2015 to pave way for investigations into his conduct, resigned on 5th December 2016 after approximately 17 months without any communication on the progress or outcome of the investigations. He sued for Kshs 5,872,150.05 comprising salary arrears, allowances, notice pay, compensatory damages, severance and unremitted pension contributions, alleging constructive dismissal. The respondent admitted the interdiction but contended that the investigations had no time limit, that the resignation was voluntary, and counterclaimed Kshs 9,898,108.00 as outstanding revenue to be cleared before payment of dues. The court framed three issues: constructive dismissal, justification for withholding dues, and available reliefs. Applying the principles in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga, the court held that indefinite interdiction for 17 months without any word or action was neither fair nor reasonable and entitled the claimant to treat himself as constructively dismissed, amounting to unfair and unlawful termination. On the dues question, since the respondent itself confirmed the Kshs 9,898,108.00 was subject of the terminated investigations, the court found the claim unjustified and ordered payment of the respondent's own tabulated terminal dues. The claimant received a declaration of constructive dismissal, Kshs 3,988,154.05 in total (terminal dues of Kshs 2,118,407.05, three months' notice pay, eight months' compensatory damages, and unremitted pension contributions payable to the Staff Provident Fund), interest at court rates, a certificate of service within 30 days, and costs of the suit. Severance pay was declined as payable only on redundancy.

Key legal issues

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01

Constructive dismissal by prolonged, indefinite interdiction

Holding

Interdiction for 17 months without any communication or conclusion of investigations amounted to a repudiatory breach; the claimant was constructively and unfairly dismissed.

Reasoning

Applying the Coca Cola v Ligaga principles, the court found the employer placed the claimant on interdiction promising he would be advised of investigation findings, never responded to his 2016 status inquiry, and kept him in abeyance for about 17 months. The investigation had no time limit and was effectively indefinite. On an objective test with causation established through the resignation letter, the conduct went to the root of the contract, entitling the employee to treat himself as constructively dismissed on a balance of probability.

p. 6
02

Withholding of terminal dues and alleged surcharge/clearance

Holding

The claim of Kshs 9,898,108.00 was unjustified because it was founded on investigations that were never concluded; the respondent had no right to withhold terminal dues.

Reasoning

The respondent itself conceded the outstanding revenue figure was the subject of disciplinary investigations, which were terminated upon acceptance of the resignation. No evidence showed the investigations were concluded or the sum ascertained. The court therefore rejected the characterization of the surcharge as a mere 'clearance process' and held the withholding of dues unjustified, awarding the terminal dues the respondent itself had tabulated.

p. 7

Legal principles established

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  • Placing an employee on indefinite interdiction without communicating the outcome of a disciplinary process amounts to constructive dismissal entitling the employee to treat himself as discharged.
  • An employer may not withhold an employee's terminal dues on account of sums said to arise from an unfinished disciplinary investigation.

Court orders

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  1. 1.A declaration that the claimant was constructively dismissed from employment by the respondent hence was unfairly terminated.
  2. 2.The claimant is awarded the terminal dues tabulated by the respondent being the sum of Kshs 2,118,407.05.
  3. 3.The claimant is awarded three month's salary in lieu of notice being the sum of Kshs 509,931.00.
  4. 4.The claimant is awarded compensatory damages in the sum of Kshs 1,359,816.00 which sum is equivalent to 8 months of his gross salary.
  5. 5.The claimant is entitled to unremitted pension contribution in the sum of kshs 159,231.00, to be remitted directly to the Staff Provident Fund.
  6. 6.Total award of Kshs 3,988,154.05 with interest at court rates from the date of judgment until payment in full.
  7. 7.Certificate of service to issue within 30 days from the date of judgment.
  8. 8.The claimant shall have the costs of the suit.

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 41
  • Constitution of Kenya, 2010Article 47
  • Constitution of Kenya, 2010Article 50
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 49(1)(c)
  • Employment Act, 2007Section 40(1)(g)
  • Employment Act, 2007Section 51(1)
  • Fair Administrative Action Act, 2015Section 4(1)
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (8)

  • Coca Cola East & Central Africa Limited vs Maria Kagai Ligaga
    [2015] eKLR
  • Western Executive (ECC) Limited v Sharp
    [1978] 1 CR 222
  • Max Masoud Roshankar & another vs Sky Aero Limited
    (2015) eKLR
  • Paul Mwaura Mbugua vs Kagwe Tea Factory Ltd & another
    (2012) eKLR
  • Marete vs Attorney General
    (1987) KLR 690
  • Bartholomew Wanyama vs Moses Gitari and 2 others
    Industrial Court Cause No. 973 of 2011
  • Peterson Guto Ondieki vs Kisii University
    (2020) eKLR
  • Milton M. Isanya vs Aga Khan Hospital Kisumu
    (2017) eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act, 2007 (Employment and Labour Relations Court)

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, "Koech v Kenya Railways Corporation (Cause 48 of 2018) [2023] KEELRC 870 (KLR)", Case Analysis (2023). Cause No 48 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/870/eng@2023-04-14

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