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ELRCOtherCause No E082 of 2022· [2023] KEELRC 2041 (KLR)

Nyali Academy Service Limited t/a The Mombasa Academy v Muli (Cause E082 of 2022) [2023] KEELRC 2041 (KLR)

Employment and Labour Relations Court
27 July 2023
MMM. Mbarũ
1,999 words in judgment
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The bottom line

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A Kenyan court ruled that employees must give notice before quitting, but employers cannot cut salaries without written employee consent.

What this practically means

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Executive summary

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The claimant, a limited liability company operating The Mombasa Academy in Nyali, Mombasa, sued its former Accounts/Business Studies teacher for wrongfully terminating a fixed-term contract running from 1 September 2019 to 30 June 2021. On 1 March 2021 the respondent travelled to Nairobi without notice and on 2 March 2021 declared his contract terminated immediately, without notice or reasons. The claimant sought a declaration of wrongful termination, three months' notice pay of Ksh.375,000, and costs. The respondent, who did not attend the hearing, counter-claimed for Ksh.350,000 in unpaid salaries arising from unilateral pay cuts of 30% and 50% between May and December 2020 during the COVID-19 pandemic, and relied on Section 10(5) of the Employment Act for failure to issue a revised contract. The court found the respondent wrongfully abandoned his employment; frustration with the work environment did not justify leaving without notice, and he owed notice pay. However, as the contract's 'term's written notice' was undefined, only one month's notice pay of Ksh.125,000 was awarded rather than three months. On the counter-claim, the court held that an employer in financial distress must obtain employees' written consent to vary terms or invoke redundancy provisions; unilateral cuts were unlawful and the pandemic and parents' fee suit did not justify withholding salaries. The Ksh.350,000 counter-claim was awarded, to be offset against the notice pay owed, with each party bearing its own costs. Judgment delivered at Mombasa on 27 July 2023 by M. Mbarũ J.

Key legal issues

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01

Whether the respondent wrongfully terminated his fixed-term employment contract

Holding

Yes; the respondent abandoned employment without notice or payment in lieu and owes one month's notice pay of Ksh.125,000

Reasoning

The respondent resigned with immediate effect without written notice despite a fixed-term contract requiring a term's written notice. Frustration and dissatisfaction with the work environment did not justify abandonment without notice. As the contractual 'term's written notice' was undefined, the court fell back on Section 35 and 36 of the Employment Act and found only one month's notice pay due, rejecting the claimant's claim for three months.

p. 4
02

Whether the unilateral salary reductions during the COVID-19 pandemic entitled the respondent to unpaid salaries

Holding

Yes; the counter-claim for Ksh.350,000 in unpaid salaries succeeded

Reasoning

The claimant reduced salaries from 70% to 50% without the respondent's written consent and did not invoke redundancy procedures. The employer's financial difficulties, the parents' fee dispute, and the pandemic did not excuse non-payment. The teachers' letter of 20 May 2020 seeking deferred pay went unanswered, and the claimant failed to secure its rights within lawful parameters, leaving the salary cuts unlawful.

p. 4

Legal principles established

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  • An employee cannot abandon a fixed-term contract merely because of frustration and dissatisfaction with the working environment; notice or payment in lieu is required
  • An employer facing financial hardship may not unilaterally reduce salaries; changes to terms of employment require the employee's written consent, failing which redundancy provisions under Section 40 apply
  • Termination based on operational requirements is a fair reason under Section 45(2)(b) of the Employment Act

Court orders

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  1. 1.The claimant is awarded notice pay at Ksh.125,000 payable by the respondent
  2. 2.The counter-claim is awarded at Ksh.350,000 and shall be offset from what is owed
  3. 3.Each party to bear own costs

Authorities

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Legislation

  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 10(5)
  • Employment Act, 2007Section 13
  • Employment Act, 2007Section 40
  • Employment Act, 2007Section 45(2)(b)

Cases cited (1)

  • VS & 43 others (acting on their behalf and also acting as parents and next of friend of students learning at the Mombasa Academy v Nyali Academic Services Limited t/a Mombasa Academy & another
    [2020] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Nyali Academy Service Limited t/a The Mombasa Academy v Muli (Cause E082 of 2022) [2023] KEELRC 2041 (KLR)", Case Analysis (2023). Cause No E082 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2041/eng@2023-07-27

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