Njoroge v Thika Water and Sewerage Company Limited & 4 others (Cause 1338 of 2018) [2024] KEELRC 2353 (KLR)
The bottom line
#A Kenyan court ruled a water company unfairly demoted and pushed out its Managing Director, awarding him over Ksh. 4.5 million.
What this practically means
#Executive summary
#Key legal issues
#Identity of the Claimant's employer
The Claimant ceased being an employee of the national government and transited to the 1st Respondent as an employee with effect from 7th September 2009 under the transfer of assets, staff and liabilities agreement.
The transfer agreement's clause 3 required transferred staff to retain their rights and seniority, and appendix 2 listed the Claimant among the 104 staff to be transferred. Although his position of General Manager at Thika Municipal Council differed in name from Managing Director, the two were equivalent in seniority, and the Board had power to permit transit on indefinite terms.
Nature of the employment contract - indefinite or fixed term
The contract between the Claimant and the 1st Respondent was permanent and pensionable (indefinite), not fixed term; the purported change to fixed term was invalid and unlawful.
The 1st Respondent failed to produce the alleged written fixed term contract despite the statutory duty under sections 10(6) and 74 of the Employment Act to keep employment records, and did not issue a notice to produce under sections 66 to 69 of the Evidence Act. The draft contract dated 21st February 2012 was never executed by the Claimant and did not alter the subsisting indefinite employment.
Whether the contract lapsed through effluxion of time or was unfairly terminated
The 1st Respondent unlawfully terminated the Claimant's employment; replacing him while he remained on indefinite terms amounted to unfair labour practice and constructive dismissal, compounded by his demotion to Technical Manager.
Because the contract was on indefinite terms, treating it as having lapsed was unfair. The Claimant was demoted to Technical Manager as evidenced by the pay slips for January to October 2016, which the Board impliedly ratified by paying him in that role, constituting constructive dismissal and violation of article 41 of the Constitution.
Whether the 1st Respondent could recover payments made during study leave and as Technical Manager
The claim fails; it was not pleaded by counterclaim, and the payments were legitimate since approved by the Finance and Administration Committee.
The request only featured in the relief section of the Statement of Defence. Even if properly pleaded, the Finance and Administration Committee's resolution of 15th April 2015 sanctioning study leave and 80% salary was binding, as no clause in the MA and AA required full Board approval.
Legal principles established
#- An employer proposing to alter particulars of a written contract of service, including its form and duration, must do so in consultation with the employee and evidence the change in writing.
- Refusal by an employer to remunerate an employee, to allocate work, or demotion in rank amounts to repudiation of the contract resulting in constructive termination.
- Gratuity does not necessarily denote an end-of-contract payment and cannot alone evidence expiry of a fixed term contract.
Court orders
#- 1.Declaration that the Claimant has no cause of action against the 3rd to 5th Respondents and that his case against them fails
- 2.Finding that the contract of service between the Claimant and the 1st Respondent was for an indefinite and not fixed term
- 3.Declaration that the 1st Respondent unlawfully terminated the contract through constructive termination of the Claimant's employment
- 4.Declaration that the 1st Respondent violated the Claimant's right to fair labour practice in contravention of article 41 of the Constitution
- 5.Award of Ksh. 3,510,000.00 to the Claimant as compensation for unfair termination, subject to applicable statutory deductions
- 6.Award of general damages of Ksh. 1,000,000.00 for violation of the right to fair labour practices
- 7.Interest on the amounts awarded at court rates from the date of the decision
- 8.Costs of the case awarded to the Claimant against the 1st Respondent
- 9.Costs of the case awarded to the 3rd, 4th and 5th Respondents against the Claimant
- 10.Refusal of the 1st Respondent's prayer that the Claimant reimburse amounts paid while on study leave and as Technical Manager
- Jurisdiction invoked
- Employment and Labour Relations Court Act, section 12 (as read with section 49 of the Employment Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njoroge v Thika Water and Sewerage Company Limited & 4 others (Cause 1338 of 2018) [2024] KEELRC 2353 (KLR)", Case Analysis (2024). Cause No 1338 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2353/eng@2024-09-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.