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ELRCPartially AllowedELRC Cause No. E011 of 2022· [2024] KEELRC 2866 (KLR)

Maundu v Wine Company Limited (Cause E011 of 2022) [2024] KEELRC 2866 (KLR)

Employment and Labour Relations Court
14 November 2024
DNDavid Nderitu
4,852 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled an employee resigned voluntarily, not constructively dismissed, yet still won Kshs500,215 in unpaid salary, allowances and reimbursements.

What this practically means

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Executive summary

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The claimant, formerly head of sales at the respondent alcoholic beverages distributor, claimed he was constructively dismissed when the respondent withheld his salary from October 2021 to January 2022. He sought salary arrears of Kshs432,000, allowances of Kshs24,200, notice pay, 12 months' compensation, leave pay, reimbursement of Kshs44,215, a certificate of service, interest and costs. The respondent denied constructive dismissal, asserting the claimant voluntarily resigned, and filed a counter-claim for general and special damages of Kshs4,836,222.38 alleging the claimant failed to account for collected debts, forged LPOs, and was responsible for the theft of a company motor vehicle, plus notice pay. The court framed five issues and applied the Court of Appeal's principles in Coca Cola v Ligaga on constructive dismissal. It held that although non-payment of salary was a fundamental breach, the claimant's resignation letter was friendly, attributed the resignation to career progression and blamed the employer for nothing, breaking the causal link required for constructive dismissal. The court declared that the claimant wilfully and voluntarily resigned. It nonetheless awarded earned dues of Kshs500,215 (salary arrears Kshs432,000, allowances Kshs24,200, reimbursement Kshs44,215), but declined 12 months' compensation, notice pay and leave pay, holding the leave days were traded for notice. The counter-claim failed: the criminal allegations lay outside the ELRC's jurisdiction under Article 162 and Section 12(1) of the ELR Act, and in any event no evidence proved the claimant's involvement, with no police reports made. The claimant received costs of the cause and of the counter-claim, and a certificate of service within 30 days.

Key legal issues

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01

Whether the claimant was constructively dismissed or voluntarily resigned

Holding

The claimant voluntarily and wilfully resigned; he was neither constructively dismissed nor otherwise terminated

Reasoning

Applying the Coca Cola principles, the claimant had to show a repudiatory breach that was the effective reason for leaving. Although non-payment of salary was a fundamental breach, the resignation letter was friendly, blamed no one, and cited career progression. Causation was therefore not proved and the resignation was voluntary.

p. 8
02

Whether the claimant was entitled to salary arrears, allowances and reimbursement despite voluntary resignation

Holding

Salary arrears for October 2021 to 18th January 2022, December 2021/January 2022 allowances and reimbursement of Kshs44,215 were granted as earned dues

Reasoning

These dues were earned under the contract regardless of the mode of separation. The respondent, as custodian of employment records, did not prove payment of the arrears or rebut the allowance claim; receipts supported the reimbursement claim.

p. 8
03

Whether the respondent proved its counter-claim for general and special damages, fraud and notice pay

Holding

The counter-claim was dismissed in its entirety

Reasoning

The allegations of theft, forgery and failure to remit collected debts were criminal in nature, over which the ELRC has no jurisdiction, and in any event RW1 conceded there was no evidence of the claimant's involvement and no police reports were made. Notice pay failed because the claimant was owed 30 leave days which he traded for notice.

p. 9

Legal principles established

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  • Non-payment of an employee's agreed salary is a fundamental breach of a contract of employment
  • For constructive dismissal, the toxic or unconducive environment created by the employer must be the fundamental reason for the employee leaving, as demonstrated objectively
  • The ELRC's jurisdiction is limited to employment and labour relations disputes and does not extend to alleged criminal conduct such as theft or forgery

Court orders

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  1. 1.A declaration that the Claimant willfully and voluntarily resigned from his employment
  2. 2.Judgment for the claimant of Kshs500,215 made up of Kshs432,000 salary arrears, Kshs24,200 allowance and Kshs44,215 reimbursement
  3. 3.The respondent to issue and deliver a certificate of service to the Claimant within 30 days of the judgment
  4. 4.The claimant awarded costs of the cause
  5. 5.The counter-claim dismissed in its entirety with costs to the claimant

Authorities

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Legislation

  • Constitution of KenyaArticle 41
  • Constitution of KenyaArticle 162(2)
  • Employment ActSection 17
  • Employment ActSection 18(2)(c)
  • Employment ActSection 35(1)(c)
  • Employment ActSections 40, 41, 42, 43, 44, 45, 46 & 47
  • Employment ActSection 51
  • Employment and Labour Relations ActSection 12(1)
  • Evidence ActSection 109

Cases cited (5)

  • Coca Cola East & Central Africa Ltd V Maria Kagai Ligaga
    (2015) eKLR
  • Agatha Bugosi Said V Vegpro Kenya Ltd
    (2014) eKLR
  • Alfonce Mua Kasimu V Electrical Card Services Ltd
    (2014) eKLR
  • Douglas Omunyin V Board of Trustees, Redeemed Christian Church of God
    [2022] eKLR
  • Jasbir Singh Rai & 3 others V Tarlochan Singh Rai & 4 others
    [2014] eKLR
Jurisdiction invoked
Article 162 of the Constitution and Section 12(1) of the Employment and Labour Relations Act

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, "Maundu v Wine Company Limited (Cause E011 of 2022) [2024] KEELRC 2866 (KLR)", Case Analysis (2024). ELRC Cause No. E011 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2866/eng@2024-11-14

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