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ELRCPartially AllowedMemorandum of Claim filed 12th October 2021· [2024] KEELRC 2442 (KLR)

Leah v Iran Medical Clinic (Cause E847 of 2021) [2024] KEELRC 2442 (KLR)

Employment and Labour Relations Court
26 September 2024
3,484 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer who stopped an employee's salary while she was on maternity leave was ordered to pay over KShs. 560,000 for constructive dismissal.

What this practically means

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Executive summary

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The Claimant, a Pharmacy Technologist employed by the Respondent on successive fixed-term contracts from 23rd December 2017, sued after resigning on 10th September 2021. She claimed she was forced to resign after the Respondent unilaterally stopped paying her salary from July 2021 while she was on emergency maternity leave, and sought notice pay, service pay, withheld salary, reimbursement for goods supplied to the Respondent on her guarantee, damages for unlawful termination and damages for discrimination on grounds of pregnancy, race and religion. The Respondent, through its Director Seyednaser Emadi, alleged anomalies at the Park Road Clinic — crumpled invoices, stock discrepancies and expired drugs — and said the Claimant resigned to frustrate a disciplinary process. The court framed three issues: constructive dismissal, discrimination, and entitlement to reliefs. Applying Coca-Cola v Ligaga and Stephen Michuki, it held the Respondent's unilateral cessation of salary without contractual or statutory justification was a repudiatory breach; the Claimant was constructively dismissed. The discrimination claim failed for want of evidence. The court awarded compensation of six months' gross salary (KShs. 360,000), unpaid salary for July–August 2021 (KShs. 120,000), ten days of September 2021 (KShs. 20,000), and one month's notice pay (KShs. 60,000), totalling KShs. 560,000, with interest and costs. The goods-supply claim was rejected for want of pleading and proof. Judgment was delivered by Ocharo Kebira, Judge, on 26th September 2024.

Key legal issues

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01

Constructive dismissal

Holding

The Respondent's unilateral cessation of the Claimant's salary from July 2021 was a repudiatory breach; the Claimant was constructively dismissed

Reasoning

The Respondent stopped the Claimant's salary without prior notice or justification grounded in the contract or HR manual, while she was on maternity leave. The court applied the Coca-Cola Ligaga principles and held the employer could not suspend salary pending investigations; such conduct evinced an intention not to be bound by the contract, causing the resignation.

p. 6
02

Discrimination based on pregnancy, race and religion

Holding

Claim failed; the Claimant did not discharge the burden of proving discrimination

Reasoning

Section 5(3) of the Employment Act prohibits discrimination on grounds including pregnancy, race and religion. Following Reuben Wamukota Sikulu, the employee must establish a prima facie case. The Claimant pleaded discrimination but produced no evidence of it, so the claim failed at that threshold.

p. 7
03

Withheld salary and notice pay

Holding

Claim for unpaid July, August and 10 days of September 2021 salary succeeded; notice pay awarded under Sections 35(1) and 36 of the Employment Act

Reasoning

The Respondent's witness admitted under cross-examination that the salary was not paid, amounting to an admission, and the Claimant's evidence was uncontroverted. The court found the Claimant entitled to notice pay under Section 35(1) read with Section 36 of the Employment Act.

p. 7
04

Compensatory relief for constructive dismissal

Holding

Six months' gross salary (KShs. 360,000/-) awarded under Section 49(1)(c) of the Employment Act

Reasoning

The court exercised its discretionary power under Section 49(1)(c), considering the Respondent's misconduct, its depiction of the Respondent as uncaring at a vulnerable time for the Claimant, the impact of the conduct, and the length of service.

p. 8

Legal principles established

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  • An employer cannot unilaterally suspend payment of an employee's salary pending investigations; doing so amounts to a repudiatory breach constituting constructive dismissal
  • Constructive dismissal is established where the employer's conduct is a repudiatory breach causally linked to the employee's resignation
  • The remedy of compensatory relief under Section 49(1)(c) of the Employment Act is available to employees who successfully claim constructive dismissal

Court orders

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  1. 1.A declaration that the Claimant was constructively dismissed from employment
  2. 2.Compensation for unfair termination equivalent to six months' gross salary - Kshs. 360,000/-
  3. 3.Unpaid Salary for July-August 2021 - Kshs. 120,000/-
  4. 4.Unpaid salary for 10 days in September 2021 - Kshs. 20,000/-
  5. 5.One month's salary in lieu of notice - Kshs. 60,000
  6. 6.Interest on the decretal sum at court rates from the date of Judgment until payment in full
  7. 7.Costs of the suit, with instruction fee computed based on the total amount awarded to the Claimant

Authorities

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Legislation

  • Employment Act, 2007Section 5(3)
  • Employment Act, 2007Section 46(a)
  • Employment Act, 2007Section 35(1)
  • Employment Act, 2007Section 36
  • Employment Act, 2007Section 49(1)(c)
  • Constitution of KenyaArticle 27(4)

Cases cited (4)

  • Weathersfield Ltd vs Sargent
    [1999] IRLR 94
  • Coca-Cola East & Central Africa Limited v Maria Kagai Ligaga
    [2015] eKLR
  • Stephen Michuki v East African Safari Air Express Limited & another
    [2022] eKLR
  • Reuben Wamukota Sikulu vs Director of the Human Resource Management, Ministry of Devolution & Planning & 2 others
    (2020) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act, 2007

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, "Leah v Iran Medical Clinic (Cause E847 of 2021) [2024] KEELRC 2442 (KLR)", Case Analysis (2024). Memorandum of Claim filed 12th October 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2442/eng@2024-09-26

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