Njuguna v Entreplat Insurance Brokers Ltd (Cause E192 of 2022) [2024] KEELRC 139 (KLR)
The bottom line
#Kenya's Employment Court confirmed employers cannot cut pay or change contract terms without consulting the employee first, or resignations count as constructive dismissal.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was constructively dismissed by the Respondent
Yes - the unilateral variation of the employment contract without consultation was a breach that actuated the resignation, amounting to constructive dismissal.
The court applied the contractual approach test from Western Excavating v Sharp and Coca Cola v Ligaga. The Respondent changed the Claimant's terms from salary to commission-based pay without consultation, nullifying her appointment letter with immediate effect. Section 10(5) of the Employment Act required consultation before varying terms. The Claimant was presented with a fait accompli and resigned reasonably. The Claimant's case was proved on a balance of probabilities.
Whether the Claimant is entitled to the reliefs sought
Partially - declaration granted, 2 months' salary as compensation under Section 49(1)(c) awarded, but terminal dues/compensatory damages of Kshs 192,000 and the alternative prayer dismissed for lack of evidence and particulars.
Under Section 49(1)(c) the court considered the short duration of employment (1 year 3 months), absence of recorded misconduct, non-appeal of the decision, and the Claimant's own contribution to the dismissal through poor performance. Two months' salary (Kshs 192,000) was deemed fair compensation. Other heads failed for want of proof and particulars.
Legal principles established
#- An employer cannot unilaterally vary a written contract of employment without consultation with the employee as required by Section 10(5) of the Employment Act; unilateral variation amounts to repudiation and breach of contract.
- The contractual approach test of constructive dismissal applies: significant breach going to the root of the contract, causal link between resignation and employer's conduct, resignation within reasonable time, and absence of acquiescence, waiver or estoppel.
Court orders
#- 1.Declaration that the Respondent constructively dismissed the Claimant from employment.
- 2.Equivalent of 2 months' salary, Kshs 192,000/=.
- 3.Costs of this suit plus interest at court rates from the date hereof till payment in full.
- Jurisdiction invoked
- Articles 162(2)(a) and 165(5)(b) of the Constitution of Kenya, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njuguna v Entreplat Insurance Brokers Ltd (Cause E192 of 2022) [2024] KEELRC 139 (KLR)", Case Analysis (2024). Cause E381 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/139/eng@2024-02-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.