Ndung’u v Choice Microfinance Bank Limited (Cause E777 of 2022) [2024] KEELRC 986 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Equal pay for work of equal value
The Respondent subjected the Claimant to unfair labour practice by paying him Ksh. 100,000.00 as CEO when the outgoing CEO earned Ksh. 420,000.00 for the same work, with no objective justification
Article 41 protects fair labour practices including fair remuneration, and section 5 of the Employment Act mandates equal pay for work of equal value. The Respondent provided no objective criteria for the pay disparity, and the outgoing CEO's Ksh. 420,000.00 was an entry salary, defeating the experience-based explanation.
Constructive dismissal
The Claimant was unfairly terminated through constructive dismissal
The Respondent failed to issue a written contract as required by sections 9 and 10 of the Employment Act, reneged on its commitment to discuss terms, ignored the Claimant's 21st September 2022 letter, and demoted him. These intolerable conditions justified resignation, deemed a forced termination by the employer.
Alleged breach of procurement laws, fraud and conflict of interest
The court absolved the Claimant; the counter-claim failed
The investigation report showed only a variance in prices accounted for by higher-grade equipment, not fraud. Further, the Public Procurement and Asset Disposal Act applies to State organs and public entities under section 3, and no evidence showed the Respondent fell within that category. The conflict-of-interest claim failed because the Respondent's own policies only require disclosure, and the Board did not object to the insurance transaction.
Legal principles established
#- Employers must pay equal pay for work of equal value and cannot justify pay disparities between employees performing the same work without objective criteria
- Failure to pay an employee a salary matching the value of his work constitutes repudiation of the contract and may ground constructive dismissal
- Where an employer fails to reduce the contract into writing, it bears the burden of proving the terms it asserts under section 10(7) of the Employment Act
Court orders
#- 1.Declared that the Claimant was underpaid by the Respondent during his tenure as CEO in comparison with the CEO whom he replaced
- 2.Declared that the Claimant's contract of service was unfairly terminated through constructive dismissal
- 3.Awarded the Claimant Ksh. 2,880,000.00 for underpayment of salary for his tenure as CEO
- 4.Awarded the Claimant Ksh. 1,680,000.00 as compensation for unfair dismissal from employment
- 5.Declined the claim for house allowance
- 6.Ordered the Respondent to issue the Claimant with a Certificate of Service
- 7.Dismissed the Respondent's counter-claim
- 8.Awarded the Claimant costs of the counter-claim
- 9.Directed that the award is subject to the applicable statutory deductions
- 10.Deemed any other relief sought but not expressly granted as declined
- On appeal from
- null
- null
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under Article 41 of the Constitution and the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ndung’u v Choice Microfinance Bank Limited (Cause E777 of 2022) [2024] KEELRC 986 (KLR)", Case Analysis (2024). ELRC CAUSE NO. E 777 OF 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/986/eng@2024-04-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.