Leaburia v Dumisha Sacco Limited (Employment and Labour Relations Claim E002 of 2023) [2025] KEMC 165 (KLR)
The bottom line
#A Kenyan court ruled a Sacco CEO resigned voluntarily rather than being constructively dismissed, but still won unpaid salary, service pay and a certificate of service.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant was constructively dismissed
No constructive dismissal; the claimant voluntarily resigned to forestall impending disciplinary action for underperformance
The court found the employer had lawful cause: the claimant underperformed as Acting/CEO, apologized in writing, failed to improve despite warnings and probation extension, and was reverted to his previous Internal Auditor position. The employer's reversion and disciplinary prerogatives did not amount to repudiatory breach. The claimant resigned after securing alternative employment, defeating the constructive dismissal ingredients.
Whether the claimant was entitled to CEO salary for 14 months
Yes; the differential of Kshs 30,796 for 14 months was awarded
The court held that although the claimant was not confirmed as CEO for poor performance and could not continue on CEO salary after reversion, he was entitled to the CEO salary while actually acting/appointed to that position for the 14-month period from 12th July 2019 to 1st September 2020.
Whether the compulsory leave salary was payable
Yes; 3 months' CEO salary of Kshs 235,788 awarded
The claimant remained in employment as Acting CEO pending conclusion of investigations when sent on compulsory leave; he was therefore entitled to the salary of that position for the 3 months of the leave.
Whether the service pay claim succeeded
Service pay of Kshs 71,700 awarded at 15 days per complete year for 3 full years
Neither party produced documents showing statutory deductions or membership of a pension scheme. The court found no proof that the claimant was a member of any pension scheme and awarded service pay under section 35(5), noting redundancy was merely an additional category of eligible persons.
Whether the unpaid leave claim was barred
Dismissed as time-barred
Following Exotic Penina Fields Group Limited v Simiyu, unpaid leave is a continuing injury under section 90 of the Employment Act with a 12-month limitation from cessation; the leave prayer was filed after 2 years and was untenable.
Legal principles established
#- Constructive dismissal occurs when an employee is forced to leave employment on account of a material breach of the contract by the employer; resignation prompted by the employer's lawful disciplinary response is not constructive dismissal
- An employee who resigns after a 4 weeks' notice is not entitled to salary in lieu of notice
- An employee on compulsory leave remains in employment and is entitled to the salary of the position held when sent on leave
- An employee who has served over four consecutive weeks is entitled as of mandatory right to a certificate of service under section 51 of the Employment Act
- Failure to pay leave constitutes a continuing injury which must be prosecuted within 12 months of cessation of the grievance
Court orders
#- 1.Dismissal of the prayer for declaration that the unilateral reduction of salary was illegal and unjustified
- 2.Dismissal of the prayer for 12 months' salary as compensation for unfair termination (Kshs 943,152.00)
- 3.Dismissal of the prayer for one month's salary in lieu of notice (Kshs 78,596.00)
- 4.Award of unpaid salary for the 3-month compulsory leave period (Kshs 235,788)
- 5.Award of unpaid/reduced salary differential of Kshs 30,796 for the 14 months worked (Kshs 431,144)
- 6.Dismissal of the prayer for unpaid leave days (Kshs 191,250) as time-barred
- 7.Award of service pay at 15 days for 3.5 years worked (Kshs 71,700) under section 35(5) of the Employment Act
- 8.Issuance of a certificate of service within 30 days of the order
- 9.Interest at 14% from the date of filing the suit till payment in full
- 10.Costs of the case to the claimant
- Jurisdiction invoked
- Employment and Labour Relations claim under the Employment Act, 2007 (sections 35(5), 51 and 90 invoked)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Leaburia v Dumisha Sacco Limited (Employment and Labour Relations Claim E002 of 2023) [2025] KEMC 165 (KLR)", Case Analysis (2025). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2025/165/eng@2025-07-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.