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ELRCPartially AllowedELRC Appeal (Kisumu), lodged 9th February 2023· [2024] KEELRC 843 (KLR)

Kenya Union of Sugarcane Plantation and Allied Workers v Othira (Appeal E005 of 2023) [2024] KEELRC 843 (KLR)

Employment and Labour Relations Court
18 April 2024
CBC. N. Baari
3,074 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court doubled an unfairly dismissed worker's compensation to twelve months' salary after his employer unilaterally changed his job without consulting him.

What this practically means

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Executive summary

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The Appellant union appealed against a Kisumu Chief Magistrate's Court judgment of 17th January 2023 which found that the Respondent, an Organizing Secretary employed for about 10 years, had been constructively dismissed after being sent on indefinite unpaid leave in September 2019, and awarded him one month's salary in lieu of notice, six months' compensation for wrongful dismissal and underpayment arrears totalling Kshs 619,097/-. The appeal was canvassed by written submissions and the Court consolidated the eleven grounds into three issues: constructive dismissal, weight of evidence, and use of minimum wage rates. Applying the first-appeal standard in Okeno v Republic, the Court held that constructive dismissal requires the employee to resign because the employer's conduct leaves no alternative; since the Respondent never resigned, constructive dismissal could not arise and the trial court erred on that point. However, the unilateral decision to place the Respondent on indefinite unpaid leave, made by the Board without the consultation mandated by Section 10(5) of the Employment Act, amounted to unlawful and unfair termination. On quantum, the Court found the Respondent served as Organizing Secretary rather than salesman, so the Minimum Wage Regulation did not apply, and set aside the underpayment award. It substituted the six-month compensation with the maximum of twelve months' salary (Kshs 115,800/-) given his long service and the manner of termination, and upheld one month's pay in lieu of notice (Kshs 9,650/-). The Appellant was ordered to bear costs in both courts.

Key legal issues

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01

Whether the Respondent was constructively dismissed

Holding

No - constructive dismissal requires resignation, and the Respondent never resigned; however, sending him on indefinite unpaid leave without consultation amounted to unlawful and unfair termination

Reasoning

The Court traced the constructive dismissal doctrine, holding that the employee must resign because the employer's conduct leaves no option but to resign. The Respondent was instead sent on indefinite unpaid compulsory leave. Absent resignation, acquiescence is inferred, so constructive dismissal cannot arise. Nonetheless, the unilateral variation of the contract without the consultation required by Section 10(5) of the Employment Act made the termination unlawful and unfair.

p. 5
02

Whether the award of underpayment should stand

Holding

No - the award was set aside because the Respondent served as Organizing Secretary, not salesman, and the Minimum Wage Regulation did not apply

Reasoning

The record supported the Appellant's assertion that the Respondent held the position of Organizing Secretary rather than salesman. Since the Minimum Wage Regulation did not apply to that position, the salary payable was that agreed between the parties, and the trial court's underpayment award fell away.

p. 6
03

What compensation for unfair termination was due

Holding

The 6 months' award was substituted with 12 months' salary, the maximum, given 10 years of service and the manner of termination

Reasoning

Sections 49 and 50 of the Employment Act entitle an unfairly terminated employee to compensation. Considering the Respondent's 10 years of service and the manner in which the termination was executed, the Court found a case for maximum compensation, following Alfred Muthomi where 12 months was granted for long service.

p. 6
04

Whether pay in lieu of notice was payable

Holding

Yes - no notice or pay in lieu was issued even when it became clear the Respondent would not be recalled, so the trial court's award of one month's salary was upheld

Reasoning

Other than the compulsory leave letter, no notice or pay in lieu thereof was issued to the Respondent even when it became clear he would not be recalled. This entitled him to pay in lieu of notice, and the trial court's award on that head was upheld at Kshs. 9,650/-.

p. 6

Legal principles established

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  • Constructive dismissal requires that the employee resign from employment by reason of the employer's conduct; in the absence of resignation the employee is taken to have acquiesced
  • Changes to an employment contract must be made in consultation with the employee as required by Section 10(5) of the Employment Act; unilateral variation without consultation may render the separation unfair

Court orders

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  1. 1.The award on account of underpayment is set aside in its entirety
  2. 2.The award of 6 months' salary is set aside and substituted with 12 months' salary for unfair termination at Kshs. 115,800/-
  3. 3.The award of one-month salary in lieu of notice is upheld at Kshs. 9,650/-
  4. 4.The Appellant shall bear the costs of the suit both at the lower court and for this appeal

Authorities

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Legislation

  • Employment Act, 2007Section 47(5)
  • Employment Act, 2007Section 10(5)
  • Employment Act, 2007Section 35
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 48
  • Employment Act, 2007Section 49
  • Employment Act, 2007Section 50
  • Labour Institutions ActSection 48
  • Minimum Wage Regulations / Wages Order

Cases cited (14)

  • Enid Nkirote Mukire vs Kenya Yearbook Editorial Board
    [2022] eKLR
  • John Kebaso Mose vs Uchumi Supermarket Kericho
    ELRC No. 43 of 2017
  • Miguna Miguna vs Attorney General
    Industrial General Cause No. 473 of 2011
  • Ben Murage Njogu vs Ramani Warehouse Limited
    [2021] eKLR
  • Emmanuel Wambua Muthusi & 6 others vs Khoja Shia Ithna Ashari Education Board t/a Jaffery Academy
    [2020] eKLR
  • Coca Cola East and Central Africa ltd vs Maria
  • Okeno v Republic
    [1972] EA 32
  • Pandya v R
    [1957] EA 336
  • Shantilal M. Ruwala v R
    [1957] EA 570
  • Peters v Sunday Post
    [1958] EA 424
  • Western Excavating (ECC) Ltd v. Sharp
    (1978) ICR 222
  • Pretoria Society for the Care of the Retarded v Loots
    [1997] 6 BLLR 721
  • Anthony Mkala Chitavi v Malindi Water & Sewerage Company Ltd
    [2013] eKLR
  • Alfred Muthomi & 2 Others v National Bank of Kenya Limited
    [2018] eKLR
On appeal from
Kisumu Chief Magistrate's Court
Jurisdiction invoked
First appellate jurisdiction over the Chief Magistrate's Court judgment (appeal on grounds of law and fact)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (11)

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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, "Kenya Union of Sugarcane Plantation and Allied Workers v Othira (Appeal E005 of 2023) [2024] KEELRC 843 (KLR)", Case Analysis (2024). ELRC Appeal (Kisumu), lodged 9th February 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/843/eng@2024-04-18

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