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ELRCPartially AllowedCause No 361 of 2020· [2023] KEELRC 872 (KLR)

Torto v African Acadamey of Siences (AAS) (Cause 361 of 2020) [2023] KEELRC 872 (KLR)

Employment and Labour Relations Court
18 April 2023
9,571 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~38 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled an employer's silence on contract renewal can force constructive dismissal, though compensation was modest at one month's salary.

What this practically means

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Executive summary

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The Claimant, formerly Executive Director of the African Academy of Sciences on a three-year fixed contract from 14th August 2017, sued alleging breach of contract, unlawful termination and constructive dismissal after the Respondent failed to evaluate his performance for contract renewal and suspended him on 3rd July 2020 with thirteen allegations of misconduct, at half salary. He resigned on 31st July 2020. The Respondent denied the claims, asserting he resigned voluntarily to avoid contract expiry, and counter-claimed for USD 175,077.03 being salary increments, pension, 13th cheque and housing allowance allegedly unapproved by its Governing Council, and alleging a forged salary-review letter. The court framed three issues: constructive dismissal, the Claimant's reliefs, and the counter-claim. It held the Human Resources Policy and Procedures Manual relied on by the Claimant was unapproved and inconsequential, and that the Dorion Associates evaluation was of no moment. However, the failure to initiate the contractual performance evaluation amounted to a repudiatory breach going to the root of the contract, and the Claimant's resignation was its proximate cause, amounting to constructive dismissal. Applying Section 49 of the Employment Act and considering his failure to answer the suspension allegations, the court awarded the equivalent of one month's salary, unpaid half-salary for July 2020, one month's notice pay, relocation grant, certificate of service, costs and interest. General and aggravated damages were refused. The counter-claim failed for want of proof under Sections 107-109 of the Evidence Act, the Deloitte forensic audit having found the increments consistent with approved rates. Judgment dated 18th April 2023, delivered virtually at Nairobi by Dr. Jacob Gakeri, Judge.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Yes - the Respondent's failure to initiate the contractual performance evaluation for renewal, its unresponsiveness to the Claimant's letters and the indefinite suspension with a half-salary reduction amounted to a repudiatory breach which caused the Claimant's resignation

Reasoning

The court applied the constructive dismissal principles in Western Excavating v Sharp, Coca Cola v Ligaga and Kenyan authorities. Renewal of the contract, though not automatic, required evaluation and a recommendation, and the Respondent took no step to evaluate. Its silence in the face of the impending expiry, followed by an unexplained indefinite suspension at half-salary immediately after a demand letter, showed it no longer intended to be bound. The Claimant resigned within a reasonable time, and the proximate cause was the Respondent's conduct.

p. 15
02

Whether the Human Resources Policy and Procedures Manual could found the Claimant's claim on renewal timelines

Holding

No - the Manual was not operational, was never approved by the Governing Council, bore no authentication, and was not incorporated into the employment contract, so it was inconsequential

Reasoning

The Manual stated an approval date of 25 September 2018 but an effective date of July 2020, while the contract ended on 31 July 2020. It had no signature or endorsement by the Executive Director, the GC Secretary or the President. The Claimant admitted the counsel's letter of 15 June 2020 predated its operationalisation, and no minutes of GC or FRACC approval existed. A document relied on as a source of contractual obligations must be approved and incorporated.

p. 12
03

Whether the Respondent proved its counter-claim for allegedly unapproved payments

Holding

No - the counter-claim was dismissed because the Respondent tendered no evidence that the salary increments, pension contributions, 13th cheque and housing allowance were unapproved; the Deloitte audit showed the increments were consistent with GC-approved rates

Reasoning

Applying Sections 107, 108 and 109 of the Evidence Act, the court held the Respondent failed to produce minutes, FRACC recommendations or budget structures to show the payments were unapproved. Its own witnesses confirmed in cross-examination that the GC approved budgets including salaries on FRACC's recommendation, and the forensic audit found the increments were consistent with approved rates and routine. The alleged forged letter was not disclosed to anyone including the GC.

p. 19
04

Whether the Claimant was entitled to the reliefs sought

Holding

Partially - a declaration of breach, one month's salary compensation, half-salary for July 2020, one month's notice pay, relocation grant, certificate of service, costs and interest were granted; general and aggravated damages and 12 months' compensation were refused

Reasoning

The court grounded the awards on Sections 49(1)(c), 49(1)(a) and 51 of the Employment Act. Compensation was reduced to one month's salary because the Claimant did not respond to the serious allegations in the suspension letter, which may have emboldened the counter-claim. Notice pay was limited to one month given the absence of a termination clause in the contract. General damages for breach of contract do not exist in Kenyan employment law and aggravated damages were unproven.

p. 16

Legal principles established

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  • Where an employer fails to initiate a contractual performance evaluation for renewal of a fixed-term contract, the failure may amount to a repudiatory breach of a fundamental term going to the root of the contract, entitling the employee to treat himself as discharged and claim constructive dismissal.
  • An internal policy document not approved by the organisation's governing organ and not incorporated into the employment contract has no contractual effect and cannot found obligations or timelines.
  • A party alleging that payments were unapproved bears the burden of proving that fact, and failure to tender documentary or testimonial evidence defeats the claim.

Court orders

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  1. 1.Declaration that Respondent's failure to evaluate the Claimant for purposes of renewal of the contract of employment was a breach of contract
  2. 2.Equivalent of one (1) month's salary as compensation under Section 49(1)(c) of the Employment Act
  3. 3.Unpaid half-salary for July 2020, if outstanding
  4. 4.One (1) month's salary in lieu of notice
  5. 5.Relocation grant
  6. 6.Certificate of service
  7. 7.Costs of the suit to the Claimant
  8. 8.Interest at court rates from date of judgment till payment in full

Authorities

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Legislation

  • Employment ActSection 49(1)(a)
  • Employment Act, 2007Section 49(1)(c); Section 49(4)
  • Employment Act, 2007Section 51
  • Evidence ActSections 107, 108 and 109; Section 107(1)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B
  • Constitution of KenyaArticle 159(2)(d); Article 48

Cases cited (11)

  • Coca Cola East and Central Africa Ltd v Maria Kagai Ligaga
    [2015] eKLR
  • Communications Commission of Kenya & 5 others v Royal Medial Services Ltd & 5 others
    [2014]
  • Francis Chire Chachi v Amatsi Water Services Co. Ltd
    [2012] eKLR
  • Isaiah Makhoha v Basco Products (K) Ltd
    [2014] eKLR
  • Western Excavating ECC Ltd v Sharp
    (1978) 2 WLR 344
  • Milton M. Isanya v Aga Khan Hospital Kisumu
    [2017] eKLR
  • Nathan Ogada Atiagaga v David Engineering Ltd
    [2015]
  • Godfrey Allan Tolo v Tobias O. Otieno & another
    [2022] eKLR
  • DK Njagi Marete v Teachers Service Commission
    [2020] eKLR
  • Obonyo & another v Municipal Council of Kisumu
    [1971] E.A 91
  • Rookes v Barnard & others
    [1964] AC 1129
Jurisdiction invoked
Original employment and labour relations jurisdiction (Employment Act, 2007; Employment and Labour Relations Court Act); counter-claim under the Evidence Act and Employment Act

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, "Torto v African Acadamey of Siences (AAS) (Cause 361 of 2020) [2023] KEELRC 872 (KLR)", Case Analysis (2023). Cause No 361 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/872/eng@2023-04-18

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