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ELRCPartially AllowedCause No 608 of 2019· [2024] KEELRC 416 (KLR)

Okewe v Kenol Kobil Limited (Cause 608 of 2019) [2024] KEELRC 416 (KLR)

Employment and Labour Relations Court
27 February 2024
3,796 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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An employer who stops paying an employee without valid reason risks a constructive dismissal finding and can be ordered to pay compensation, costs, and interest.

What this practically means

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Executive summary

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The Claimant, formerly a Retail Sales Supervisor of the Respondent, sued for constructive and unfair dismissal after resigning on 5th June 2017. He alleged that following an internal audit, the Respondent placed him on compulsory leave without pay in May 2017, withheld his April 2017 salary and travel/entertainment allowances, failed to explain the allegations against him, and told him to stay away pending investigations; he then resigned. The Respondent admitted non-payment of salary for April 2017, May 2017 and 5 days of June 2017 but maintained that the Claimant resigned voluntarily, forfeiting his leave days in lieu of notice, and that it later uncovered fraud on his part. Applying the Court of Appeal's criteria in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga, the Court held that withholding salary for almost two months, with no valid justification while the Claimant was on purported compulsory leave (during which pay is due), amounted to a repudiatory breach going to the root of the contract, causally linked to the resignation - hence constructive dismissal. However, some heads of claim failed: the leave days were held forfeited as payment in lieu of notice, and no evidence supported the travelling, entertainment, handover and banking claims. Judgment was entered for the Claimant for unpaid salary of Kshs. 354,597.50, one month's salary in lieu of notice of Kshs. 172,425/-, and three months' salary as compensation for unfair termination of Kshs. 517,275/-, with costs and interest at court rates from the date of judgment until payment in full.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Yes - withholding salary for almost two months while he was on 'compulsory leave' pending investigations was a repudiatory breach causally linked to his resignation

Reasoning

Applying the Coca Cola v Maria Kagai Ligaga criteria, the Court found the Respondent breached the fundamental term that an employee be paid for work done. The Respondent had no valid reason to withhold salary for April and May 2017; leave is payable; the protracted unexplained 'investigations' left the employee unsure of his status. An objective test shows the breach went to the root of the contract, and the resignation directly followed, satisfying causation.

p. 6
02

Whether the Claimant was entitled to unpaid salary, notice pay and compensation

Holding

Yes - unpaid salary of Kshs. 354,597.50, notice pay of Kshs. 172,425/- and 3 months' salary as compensation of Kshs. 517,275/-

Reasoning

The Respondent admitted in its amended Defence and through its witness that the April, May and 5 days of June 2017 salary remained unpaid. Having found constructive dismissal amounting to unfair termination, the Court awarded one month's notice pay and three months' gross salary as compensation under the Employment Act framework, plus interest and costs.

p. 7
03

Whether the claims for leave days and entertainment expenses succeeded

Holding

No - the leave claim failed because the days were forfeited as notice, and the expense claims failed for want of evidence

Reasoning

The Respondent's position, uncontroverted by documentary evidence from the Claimant, was that the accrued leave days were deducted as payment in lieu of the contractual notice the Claimant did not give upon his same-day resignation. The travelling and entertainment/handover claims for March and April 2017 were unsupported by any receipts or records and therefore could not be allowed.

p. 7

Legal principles established

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  • Withholding an employee's salary without valid justification is a repudiatory breach going to the root of the employment contract capable of founding constructive dismissal
  • An employee on leave is entitled to pay

Court orders

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  1. 1.Unpaid salary for April and May 2017 as well as 5 days worked in June 2017 – Kshs. 354,597.50
  2. 2.One month's salary in lieu of notice – Kshs. 172,425/-
  3. 3.3 months' salary compensation for unfair termination – Kshs. 517,275/-
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest at court rates on the sums in (a), (b) and (c) from date of judgment till payment in full

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 47
  • Constitution of Kenya, 2010Article 50

Cases cited (9)

  • Joseph Aleper & another v Lodwar Water and Sanitation Company Limited
    [2016] eKLR
  • Coca Cola East & Central Africa Limited v Maria Kagai Ligaga
    [2015] eKLR
  • Simon Papa Imo v Athi River Shalom Community Hospital
    [2021] eKLR
  • Western Excavating ECC Ltd v Sharp
    [1978] 2 WLR 344
  • Micah Kangogo Chelanga v Kenya Farmers Association Ltd
    [2022] eKLR
  • Nathan Ogada Atiagaga v David Engineering Limited
    [2015] eKLR – Cause No. 419 of 2014
  • Milton M Isanya v Aga Khan Hospital Kisumu
    [2017] eKLR
  • Sophie Muthoni Njagi v Rift Valley Railways (Kenya) Limited
    [2020] eKLR
  • Herbert Wafula Waswa v Kenya Wildlife Services
    [2020] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (not expressly stated in the judgment)

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, "Okewe v Kenol Kobil Limited (Cause 608 of 2019) [2024] KEELRC 416 (KLR)", Case Analysis (2024). Cause No 608 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/416/eng@2024-02-27

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