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ELRCPartially AllowedELRC Cause No. 2052 of 2017· [2025] KEELRC 389 (KLR)

Gichara v Tropiqua Group Limited & another (Employment and Labour Relations Cause 2052 of 2017) [2025] KEELRC 389 (KLR)

Employment and Labour Relations Court
6 February 2025
OKOcharo Kebira
3,649 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused an employee's unfair termination claim but awarded her KShs 763,660 in unpaid salary because her employer couldn't produce payment records.

What this practically means

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Executive summary

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The Claimant, engaged as a Sales Consultant on a two-year fixed-term contract effective 19th May 2014, sued the 1st Respondent company and its director, the 2nd Respondent, claiming she was summarily dismissed on 23rd December 2015 without cause, or alternatively constructively dismissed, and sought declarations, general damages, service pay, costs and interest. The Respondents maintained that she voluntarily resigned on 22nd/23rd December 2015 to take up an agency arrangement and that all dues were paid. The Court framed four issues: proper joinder of the 2nd Respondent; the manner of separation; fairness of any termination; and entitlement to reliefs. On joinder, applying the separate entity principle, the Court found the director improperly enjoined and dismissed the claim against him, since joinder must rest on a cause of action or necessity, not intuition. On the manner of separation, the Court found the Claimant had pleaded mutually inconsistent exit modes and held she voluntarily resigned; her allegations of coercion and undue influence failed for lack of cogent evidence, resignation in ordinary circumstances being termination by mutual agreement. The unfair termination claim was consequently dismissed without venturing into constructive dismissal. On reliefs, compensatory damages under section 49(1)(c) and notice pay were declined as they fell with the termination claim. However, invoking section 74 of the Employment Act, the Court drew an adverse inference from the employer's failure to produce employment records showing payment of September to December 2015 salaries, and awarded the Claimant KShs. 763,660 in unpaid salaries with interest at court rates from the dates the salaries fell due, plus costs of the suit. Judgment read, signed and delivered on 6th February 2025 by Ocharo Kebira, Judge.

Key legal issues

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01

Whether the 2nd Respondent (a director) was properly joined in the suit

Holding

The 2nd Respondent was improperly enjoined; the Claimant's case against him was dismissed.

Reasoning

Applying the separate legal entity principle from Salomon v Salomon, an incorporated company is distinct from its directors and shareholders. Joinder must be justified by an existing cause of action against the person or necessity, not intuition. The employment contract was with the 1st Respondent, and the Claimant's stated reasons for suing the director were unsatisfactory.

p. 6
02

How the separation between the Claimant and the 1st Respondent occurred

Holding

The Claimant voluntarily resigned; her resignation was not procured by coercion, undue influence or duress.

Reasoning

The Claimant pleaded mutually inconsistent exit modes (constructive dismissal and verbal dismissal), which undermined her claim under section 47(5) of the Employment Act. The tone of her resignation letter showed no protest against the 22nd December 2015 discussions or the agency arrangement, and no evidence established the heavy burden of proving undue influence.

p. 7
03

Whether the Claimant's employment was unfairly terminated

Holding

The unfair termination claim was dismissed; termination could not arise where the employee resigned voluntarily.

Reasoning

Having found a voluntary resignation, the Court held it unnecessary to inquire into constructive or verbal dismissal or unfair termination. The resignation letter acknowledged the meeting of 22nd December 2015 and offered a formal resignation pending execution of an agency agreement, with no indication of coercion.

p. 7
04

Whether the Claimant was entitled to unpaid salaries for September to December 2015

Holding

The Court awarded KShs. 763,660 in unpaid salaries, drawing an adverse inference against the employer for failing to produce employment records.

Reasoning

Section 74 of the Employment Act obliges an employer to keep employment records. The 2nd Respondent admitted no documents were tendered to show the salaries for September, October, November and December 2015 were paid. In that default, the Court concluded the records, if produced, would not have aided the employer, and accepted the Claimant's figures.

p. 8

Legal principles established

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  • An employer bears the statutory duty to keep employment records under section 74 of the Employment Act, and failure to produce them where the controversy can be resolved by those records attracts an adverse inference against the employer.
  • A party relying on undue influence or duress to set aside a transaction bears a heavy burden of proof and cannot succeed on bald assertions; cogent evidence must be adduced.
  • Resignation of employment, save where it results from the intolerable conduct of the employer, is deemed by law to be termination by mutual agreement.
  • Directors and shareholders of an incorporated company are distinct legal persons from the company and can seldom be made to shoulder its liabilities absent a cause of action against them personally.

Court orders

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  1. 1.The Claimant's case against the 2nd Respondent is dismissed.
  2. 2.The Claimant's claim for unfair termination is dismissed.
  3. 3.The compensatory relief sought under section 49(1)(c) of the Employment Act and notice pay is declined.
  4. 4.The 1st Respondent shall pay the Claimant unpaid salary amounting to KShs. 763,660.
  5. 5.Interest at court rates on the sum awarded from the date the salaries became due, till full payment.
  6. 6.Costs of the suit to the Claimant.

Authorities

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Legislation

  • Employment ActSection 45(2)
  • Employment ActSection 41
  • Employment ActSection 47(5)
  • Employment ActSection 49(1)(c)
  • Employment ActSection 74
  • Companies Act, 2015

Cases cited (9)

  • Coca-Cola East & Central Africa Limited v Maria Kagai Ligaga
    [2015] eKLR
  • Patrick Asuma v Arm Cement Limited
    [2019] eKLR
  • Kenfreight (E. A) Limited v Benson K. Nguti
    [2019] eKLR
  • Kenya Union of Commercial Food and Allied Workers Union vs Meru North Sacco Farmers Limited
    [2013] eKLR
  • Salmon vs. A. Salmon & Company Ltd
    (1896) UKHL1, (1897) AC 22
  • Victor Mabacha & Another versus Nurtun Bates Limited
    (2013) eKLR, Civil Appeal No. 247 of 2005
  • Muikamba v Radio Africa Group Limited
    (Cause E245 of 2021) [2023] KEELRC 1251 (KLR)
  • Anarita Karimi Njeru vs Republic
    [1976-1980] KLR 1272
  • CIBC Mortgages PLC V Pitt
    {1993} 4 ALL ER 433
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claims of unfair termination, constructive dismissal and unpaid dues under Sections 45, 47(5), 49(1)(c), 74 and 41)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Gichara v Tropiqua Group Limited & another (Employment and Labour Relations Cause 2052 of 2017) [2025] KEELRC 389 (KLR)", Case Analysis (2025). ELRC Cause No. 2052 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/389/eng@2025-02-06

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