Muga v G. North & Son Limited (Cause E716 of 2023) [2025] KEELRC 753 (KLR)
The bottom line
#A Kenyan court awarded an employee Kshs. 3.74 million for unpaid salary, deductions and an unlawful surcharge, but COVID-19 salary cuts were lawful.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was constructively dismissed
The claim of constructive dismissal was not proved; the salary reduction and unpaid leave constituted an allowable variation of terms under Section 10(5) of the Employment Act
The Court adopted the contractual and unreasonable tests from Coca Cola v Ligaga. The Respondent communicated impending salary cuts to all staff and issued the Claimant a specific letter; the variation was justified by the COVID-19 pandemic and satisfied Section 10(5), which requires consultation and notification but not agreement. The Court therefore found no repudiatory breach going to the root of the contract.
Whether the surcharge of Kshs. 93,750 was lawful
The surcharge was unlawful; the sum is due to the Claimant
Relying on Kenya National Library Services Board v Beatrice N. Ayoti, the Court held that a surcharge is a disciplinary action requiring procedural fairness under Section 41 of the Employment Act. No show-cause notice or personal hearing was afforded to the Claimant, rendering the unilateral surcharge unlawful.
Entitlement to salary arrears, unremitted loan deductions and pension dues
These uncontroverted claims succeeded, with salary from June 2020 reckoned at Kshs. 198,250
The Respondent did not defend the claim. The Claimant produced payslips and communication from KCB Bank and Eagle Africa supporting the unremitted deductions and pension dues. In the absence of contrary evidence, the Court allowed these claims, adjusting the salary arrears figure to reflect the reduced salary effective June 2020.
Legal principles established
#- A unilateral surcharge on an employee is unlawful and unfair unless preceded by the procedural fairness under Section 41 of the Employment Act
- Consultation under Section 10(5) of the Employment Act does not require agreement; the employer must consult, revise the contract and notify the employee
Court orders
#- 1.Judgment entered in favour of the Claimant in the total sum of Kshs. 3,741,300 comprising salary arrears for March 2020-May 2020 (Kshs. 915,000), salary arrears for June 2020-August 2020 (Kshs. 594,750), unremitted loan deductions (Kshs. 1,182,300), unremitted pension dues (Kshs. 955,500) and unlawful surcharge (Kshs. 93,750)
- 2.Interest on the decretal sum at court rates from the date of judgment until payment in full
- 3.Issuance of a certificate of service to the Claimant
- 4.Costs of the case awarded to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Muga v G. North & Son Limited (Cause E716 of 2023) [2025] KEELRC 753 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/753/eng@2025-03-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.