Kakai v Ergerton University (Employment and Labour Relations Cause E045 of 2023) [2025] KEELRC 2057 (KLR)
The bottom line
#Kenya's Employment Court ruled that a university's failure to pay salaries and remit pension forced an employee to resign, and that resignation counts as constructive dismissal.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant was constructively dismissed
Yes. The employer's failure to remit pension, payment of salary in piecemeal (deferred salary) and non-remittance of loan deductions created a hostile environment that forced the resignation.
The court found undisputed evidence that the Respondent failed to remit 20% employer pension contributions, paid salary in piecemeal as deferred salary, and failed to remit loan deductions to Family Bank and Faulu. Relying on Coca Cola East & Central Africa Ltd v Maria Kagai Ligaga, the court held that in constructive dismissal the employer's conduct is in issue, and failure to pay full wages is a fundamental breach. The Claimant therefore proved the hostile environment that pushed him to resign.
Whether the pension claim was premature for want of exhaustion of remedies against the Retirement Benefits Scheme
No. Because the deducted pension contributions were never remitted to the Fund, the Claimant's claim lies against the employer, not the Scheme.
The Respondent argued that pension disputes lie with the Egerton University Retirement Benefits Scheme and outside the court's jurisdiction. The court rejected this, reasoning that although the funds were deducted from the Claimant's salary, they were never remitted to the Fund that manages the University's pension, so the employer itself remains liable for the full unremitted amount of Kshs. 1,932,883/=.
Whether the attempted rescission of the resignation restored the employment relationship
Not expressly determined as a declaration; the court instead treated the resignation as product of constructive dismissal and awarded compensation.
Although the Claimant sought declarations that his resignation was voidable and validly withdrawn and that he remained an employee, the court did not grant those declarations. It instead found the resignation was caused by the Respondent's hostile conduct and compensated him with ten months' salary, effectively treating the employment as terminated but wrongfully so.
Legal principles established
#- Failure by an employer to pay an employee all or part of his salary is a fundamental breach of the contractual obligation capable of founding constructive dismissal.
- In constructive dismissal, the issue is primarily the conduct of the employer and not the conduct of the employee.
- Where pension contributions are deducted from an employee's salary but never remitted to the pension fund, the employer remains liable and the employee need not pursue the fund.
Court orders
#- 1.A declaration that the Claimant was constructively dismissed
- 2.Compensation of Kshs. 1,000,000/= equivalent to ten months' salary for unlawful termination
- 3.Payment of unremitted pension funds amounting to Kshs. 1,932,883/=
- 4.A holding that the prayers for deferred salary and unremitted loan deductions are settled, those amounts having been paid
- 5.Costs of the suit to the Claimant
- 6.Interest at 14% per annum from the date of judgment till final payment
- Jurisdiction invoked
- Article 162(2) of the Constitution and section 12 of the ELRC Act (employment and labour relations jurisdiction)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kakai v Ergerton University (Employment and Labour Relations Cause E045 of 2023) [2025] KEELRC 2057 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2057/eng@2025-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.