Kimari v Standard Engineering Works (Cause E658, E657 & E660 of 2021 (Consolidated)) [2023] KEELRC 2641 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Constructive dismissal
Non-payment of salaries due to genuine financial difficulties caused by the COVID-19 pandemic did not amount to constructive dismissal; the resignation was a mutual separation
The court accepted uncontroverted testimony that non-payment of wages between 2019 and 2021 arose from diminished business due to the COVID-19 pandemic, an event beyond the respondent's control. The claimants had been paid in instalments until arrears reached six months, and their resignation was within their rights. Taken as a whole, the circumstances constituted mutual separation rather than a deliberate or malicious breach entitling them to compensation.
Entitlement to terminal benefits
Despite finding no constructive dismissal, the court awarded terminal benefits - arrears salary, allowances, accrued leave and gratuity under Clause 28 of the CBA - on a balance of probabilities
R.W.1 admitted the respondent had not paid terminal benefits including arrear salaries, and that the CBA did not exclude resigned employees from gratuity. The court therefore found the claims proved on a balance of probabilities and awarded each claimant six months' arrears salary, allowances where claimed, accrued leave days and gratuity at 21 days' salary per completed year of service per Clause 28 of the Collective Bargaining Agreement.
Counterclaim
The respondent's counterclaim for three months' notice of termination was dismissed for lack of proof
R.W.1 tendered no tangible evidence supporting the counterclaim. The court held that the requirement for three months' notice of termination could not arise where salaries were admittedly unpaid for six months, and the respondent failed to prove the claim. The counterclaim was dismissed against all three claimants.
Legal principles established
#- An employee who resigns due to prolonged non-payment of wages remains entitled to terminal benefits, including accrued leave and contractual gratuity under a Collective Bargaining Agreement
- A party asserting a counterclaim bears the burden of proving it with tangible evidence
Court orders
#- 1.Judgment entered for the claimants against the respondent for payment of terminal benefits as set out in their respective Statements of Claim
- 2.Payment to Peter Kibicho Kimani of Kshs.3,220,179.20 comprising six months' arrears salary, house allowance, travelling allowance, 47 accrued leave days and gratuity at 21 days' salary per completed year of service for 33 years and 9 months
- 3.Payment to Maurice Oyiro Karakacha of Kshs.2,833,482.00 comprising six months' arrear salary, travelling allowance and gratuity at 21 days' salary per completed year of service for 25 years and 2 months
- 4.Payment to Peter Ndung'u Mbeke of Kshs.2,301,195.00 comprising six months' arrear salary, house allowance and gratuity at 21 days' salary per completed year of service for 25 years and 2 months
- 5.Interest at court rates on the awards from the time of judgment till payment in full
- 6.Costs of the consolidated suit to the claimants
- 7.Dismissal of the claim for compensation due to constructive dismissal
- 8.Dismissal of the respondent's counterclaim against the three claimants
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and Labour Relations Act (consolidated claims for terminal benefits and constructive dismissal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kimari v Standard Engineering Works (Cause E658, E657 & E660 of 2021 (Consolidated)) [2023] KEELRC 2641 (KLR)", Case Analysis (2023). E658/2021 (Consolidated with E657/2021 and E660/2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2641/eng@2023-10-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.