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ELRCPartially AllowedCause No E048 of 2022· [2024] KEELRC 126 (KLR)

Wang’ombe v Mawingu Networks Limited (Cause E048 of 2022) [2024] KEELRC 126 (KLR)

Employment and Labour Relations Court
30 January 2024
8,056 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~32 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that refusing a boss's lawful return-to-office order justified dismissal, but an unjustified 54% pay cut still cost the employer over USD 34,000.

What this practically means

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Executive summary

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The claimant, employed from 2016 and promoted to Chief Technology Officer in 2018/2019 at a gross salary of USD 7,500 per month with a promised 2% stock allocation under an ESOP, sued for unfair termination and discrimination arising from successive Covid-19 era salary cuts totalling 54%, culminating in summary dismissal on 10th June 2022 for insubordination and absenteeism after he refused to resume work at the Nyeri-based Nanyuki office. The court framed four issues: unfairness of termination, justification and discrimination in the salary cuts, entitlement to ESOP shares, and reliefs. On termination, the court held the CEO's directive to resume office work was a proper command; the claimant's grievance over the salary cut gave him no right to disobey, and his conduct fell within section 44(4)(a) and (e) of the Employment Act. Section 41 procedure was followed. The dismissal was therefore fair and the claims for notice pay and twelve months' compensation failed. On salary cuts, the court admitted Communication Authority website printouts as electronic evidence under section 106B of the Evidence Act, distinguished Hezekiah Oira, and found the first cut lawful (consented with full disclosure) but the second, to 54%, fraudulently obtained through misrepresentation, drawing on Omondi Justus Ranga'nga. The claimant was awarded USD 24,857.50 in salary arrears (USD 1,525 for 16.3 months) and USD 10,000 general damages for discrimination. The ESOP claim failed as no units had vested and Rule 6(3) mandated forfeiture on dismissal for misconduct. A certificate of service was granted, with costs and interest to the claimant.

Key legal issues

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01

Validity of the reason for summary dismissal

Holding

The refusal to resume work at the Nanyuki office despite a proper command from the CEO amounted to gross misconduct under section 44(4)(a) and (e) of the Employment Act, justifying summary dismissal.

Reasoning

The CEO lawfully directed resumption of office work after Covid-19. The claimant's grievance over the 54% salary cut did not entitle him to disobey; he could have used the grievance procedure or resigned and claimed constructive dismissal. His conduct fell squarely within section 44(4), so the employer was justified in dismissing him summarily.

p. 10
02

Procedural fairness of the dismissal

Holding

The employer complied with section 41 of the Employment Act: show cause letter, response, disciplinary hearing before a committee, consideration of representations, and dismissal letter.

Reasoning

The claimant was served with a show cause notice, responded, attended a disciplinary hearing, was heard, and his representations were considered before dismissal. The court was satisfied a fair procedure within section 41 was followed and that the dismissal was fair within section 45.

p. 12
03

Lawfulness of the two salary cuts

Holding

The first salary cut (USD 1,000 plus 20%) was lawful as it was requested with full disclosure and consented to in writing; the second cut to 54% was fraudulently obtained through misrepresentation and concealment and was therefore voidable and unlawful.

Reasoning

The first cut was backed by an express request and full disclosure, including the CEO's own 25% cut, and the claimant consented in writing. The second cut to USD 3,500 relied on a letter the claimant never signed, and the misrepresentation of the company's financial position was unrebutted. Consent obtained through misrepresentation is vitiated.

p. 14
04

Admissibility of Communication Authority statistics reports

Holding

The reports downloaded and printed from the regulator's official website, supported by an unchallenged certificate of records, were admissible; the accuracy question fell under section 106B, not section 80, of the Evidence Act.

Reasoning

The court distinguished Hezekiah Oira v Patrick Quarcoo because the objection there concerned correspondences and minutes. Information from an official website printed by a member of the public is not secondary evidence if untampered; the certificate by Mr Richu confirmed provenance and was uncontested, so the reports were admitted to assess whether the business dwindled during the pandemic.

p. 12
05

Entitlement to shares under the ESOP

Holding

The claimant forfeited all rights to vesting of shares because no units had vested (no invitation letter, no payment) and Rule 6(3) of the Scheme Rules mandated forfeiture upon summary dismissal for willful misconduct.

Reasoning

Although the promotion contract entitled the claimant to 2% stock over four years, no units vested before dismissal as the Scheme Rules' conditions precedent were not met. Regardless of his knowledge of the rules, Rule 6(3) provided for forfeiture of all units in the event of termination for misconduct, so the Muhindi estoppel argument did not assist him.

p. 14
06

Discrimination in the salary cut

Holding

The claimant was subjected to differential treatment, being the only manager subjected to a 54% salary cut while others, including the CEO, took around 25%, without justification; general damages of USD 10,000 were awarded.

Reasoning

The evidence showed the company did not suffer financial stress severe enough to warrant the 54% cut, and only the claimant bore it. The court awarded USD 10,000 general damages for discrimination, taking into account that salary arrears were separately ordered.

p. 14

Legal principles established

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  • An employee has no right to disobey a lawful and proper command from a superior while pursuing a grievance; the remedy is to comply, pursue the grievance procedure, or resign and sue for constructive dismissal.
  • An employee's consent to variation of employment terms obtained through misrepresentation or concealment of material facts is negated and the variation is voidable.
  • Printouts from an official regulator's website, supported by an unchallenged certificate of records, are admissible as primary/electronic evidence and accuracy is governed by section 106B of the Evidence Act rather than the certification requirement in section 80.

Court orders

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  1. 1.Judgment for the claimant in the sum of USD 24,857.50 as salary arrears in respect of the salary cut effected from 1st February 2021 to 10th June 2022
  2. 2.General damages of USD 10,000 for discriminatory salary treatment
  3. 3.Total award of USD 34,857.50
  4. 4.Certificate of service granted
  5. 5.Costs of the suit to the claimant
  6. 6.Interest at court rate from the date of the judgment
  7. 7.Award subject to statutory deductions

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 44(3), (4)(a)-(g)
  • Employment Actsection 45
  • Employment Actsection 49
  • Employment Actsection 5(3)
  • Evidence Actsection 65
  • Evidence Actsection 79
  • Evidence Actsection 80
  • Evidence Actsection 81
  • Evidence Actsection 106B
  • Evidence Actsection 120
  • ELRC (Procedure) RulesRule 28(3)
  • Respondent's Share Ownership Scheme Rules (ESOP)Rules 3, 4, 4.2, 6(3), 9

Cases cited (12)

  • Kennedy Mutua Mwangangi v Madison Insurance Company (K) Ltd
    (2020) eKLR
  • Omondi Justus Ranga'nga & 28 others v Kenya Commercial Bank Ltd
    (U.R)
  • Carol Construction Engineers Ltd & another v National Bank of Kenya
    (2020) eKLR
  • Papius Kirogothi Muhindi v Equity Bank Ltd & 4 others
    (2017) eKLR
  • Samuel Gachie Kamiti v Equity Bank Ltd & 6 others
    (2018) eKLR
  • Hezekiah Oira v Patrick Quarcoo
    (2017) eKLR
  • Bernard Ndungu Mbugua v Nairobi Water & Sewerage Co. Ltd
    (2019) eKLR
  • Kenya Ports Authority v Fadhili Juma Kisuwa
    (2017) eKLR
  • Moses Kamau & 6 others v Signature Holdings (EA) Ltd
    (2020) eKLR
  • Ibrahim Kamasi Amoni v Kenital Solar Limited
    (2018) eKLR
  • 748 Air Services Ltd v Theuri Munyi
    (2017) eKLR
  • Joseph Wanjohi Wambugu v Paws Africa Safaris Limited
    (2018) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (sections 41, 43, 44, 45, 49) and the Evidence Act; judgment delivered under the ELRC Procedure Rules

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, "Wang’ombe v Mawingu Networks Limited (Cause E048 of 2022) [2024] KEELRC 126 (KLR)", Case Analysis (2024). Cause No E048 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/126/eng@2024-01-30

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