Kahura v Uchumi Supermarkets PLC (Employment and Labour Relations Cause E926 of 2022) [2024] KEELRC 2643 (KLR)
The bottom line
#Kenya's Employment Court ruled that unpaid salaries forced an employee to resign, awarding her over Ksh 2 million despite Uchumi Supermarkets' insolvency arrangement.
What this practically means
#Executive summary
#Key legal issues
#Commencement date of employment
Employment relation resumed on 1st July 2010, not February 2007, per the letter dated 24th September 2010.
Although the Claimant asserted she was rehired in February 2007, she did not produce evidence of that contract. The letter she produced dated 24th September 2010 showed the renewed contract commenced on 1st July 2010, and the court adopted that date as the commencement of the resumed employment.
Constructive dismissal
Failure to pay salary from February 2018 to May 2021 breached the contract and forced the resignation, amounting to constructive dismissal.
The Respondent did not controvert the non-payment of salary. Persistent salary non-payment is a recognized circumstance occasioning constructive dismissal. The court held that the resignation need not be expressly explained in the resignation letter; the surrounding events showed she was pushed out by the intolerable work environment.
Salary arrears
Claimant awarded Ksh. 2,084,121.00 being Ksh. 53,439.00 monthly salary for approximately 39 months.
The Respondent did not contest that salary was unpaid between February 2018 and May 2021. The letter of 13th February 2015 fixed the salary at Ksh. 53,439.00. Multiplying by 39 months yielded Ksh. 2,084,121.00, for which judgment was entered.
Enforcement subject to company voluntary arrangement
Enforcement of the decree requires the CVA supervisor's consent or High Court leave under Part IX of the Insolvency Act for pre-2nd March 2020 liabilities.
The court took judicial notice of In re Uchumi Supermarkets PLC [2020] eKLR approving a company voluntary arrangement covering liabilities outstanding as at 2nd March 2020. Since part of the claim predates that date, the Claimant must submit to the CVA mechanism before executing against those portions.
Legal principles established
#- A defence not supported by evidence at trial stands unproved and the court cannot rely on it.
- Constructive dismissal arises where an employee is forced out by an intolerable work environment caused by the employer's conduct.
- A resignation letter need not state the reasons for resignation for constructive dismissal to succeed; the court considers surrounding events.
- Service pay is unavailable to employees registered as NSSF contributors.
- Enforcement of a judgment debt against a company under a company voluntary arrangement requires the supervisor's consent or High Court leave under Part IX of the Insolvency Act.
Court orders
#- 1.Declared that the Respondent irregularly terminated the Claimant's employment through constructive dismissal.
- 2.Judgment entered for the Claimant against the Respondent for Ksh. 2,084,121.00 in salary arrears, subject to applicable statutory deductions.
- 3.Respondent ordered to issue the Claimant with a Certificate of Service.
- 4.Interest on the principal sum at court rates from the date of the decision.
- 5.Costs of the case awarded to the Claimant.
- 6.Decree to be enforced with the concurrence of the supervisor of the company voluntary arrangement or with leave of the High Court pursuant to In re Uchumi Supermarkets PLC [2020] eKLR.
- 7.Parties have liberty to apply.
- Jurisdiction invoked
- Original employment and labour relations jurisdiction of the ELRC
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kahura v Uchumi Supermarkets PLC (Employment and Labour Relations Cause E926 of 2022) [2024] KEELRC 2643 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2643/eng@2024-10-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.