Omache v National Bank of Kenya Limited (Cause E792 of 2021) [2025] KEELRC 32 (KLR)
The bottom line
#Kenya's Employment Court ruled KCB constructively dismissed a manager by demoting his job grade after promotion, awarding him seven months' salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was constructively dismissed
Yes. The Respondent unilaterally varied the job grade from the advertised MG8 to MG9 without consultation and without giving the Claimant an informed choice, amounting to a fundamental breach going to the root of the contract and breach of reasonable expectations; the Claimant was entitled to treat himself as constructively dismissed.
The Respondent advertised the Regional Sales Manager role at grade MG8 and interviewed the Claimant for it, but issued a 'Role Realignment' letter placing him at MG9, done unilaterally and not in consultation. The Respondent also required him to reapply for his old role, which he did unsuccessfully, leaving him a choice between accepting materially different terms or resigning. Applying Coca-Cola v Ligaga, this conduct was a fundamental breach of essential terms and frustrated the reasonable expectation created by the advertisement of a higher-grade position.
Whether reinstatement should be granted
No. Reinstatement was impractical given the circumstances of the separation and the Claimant's new employment with an insurance company.
Section 49(4) of the Employment Act requires consideration of practicability, the rule against specific performance of contracts for service, and opportunities for comparable employment. The Court found reinstatement impractical in the circumstances preceding the resignation, and the Claimant admitted in cross-examination that he had secured alternative employment with an insurance company. Compensatory damages were therefore the appropriate remedy.
Whether the Claimant is entitled to compensation and how much
Yes. Compensatory damages under Section 49(1) of the Employment Act equivalent to seven (7) months' gross salary, i.e. Kshs 654,768.94, taking into account the length of employment and circumstances of separation.
Having found unfair and unlawful termination on account of constructive dismissal, the Court invoked the compensatory remedy under Section 49(1). It fixed the award at seven months' gross salary, factoring in the length of the employment relationship (from March 2016 to June 2021) and the attendant circumstances of the separation. Interest at court rates from the date of judgment and costs of the suit were also granted.
Legal principles established
#- The key element in constructive dismissal is that the employee was entitled to leave without notice because of the employer's conduct, applying the unreasonable test or the contractual test.
- Unilateral variation of terms the employee interviewed for, without consultation, may breach the employee's reasonable expectations and constitute fundamental breach going to the root of the contract.
Court orders
#- 1.The Claimant is awarded compensatory damages in the sum of Kshs 654,768.94 being equivalent to seven (7) months of his gross salary
- 2.Interest on the amount at court rates from the date of Judgment until payment in full
- 3.The Claimant shall also have the costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act 2007; Article 41(1) of the Constitution of Kenya, 2010 pleaded by the Claimant)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Omache v National Bank of Kenya Limited (Cause E792 of 2021) [2025] KEELRC 32 (KLR)", Case Analysis (2025). Not stated in judgment (Memorandum of Claim dated 16th August 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/32/eng@2025-01-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.