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Court of AppealPartially AllowedNot stated in the judgment

Bins (Nairobi) Services Limited v Hardard Macharia Kariamburi (Civil Appeal E670 of 2024) [2025] KECA 1726 (KLR)

Court of Appeal
24 October 2025
7,109 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~28 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that cutting an employee's salary without consent is constructive dismissal, but trimmed the damages awarded to the ex-General Manager.

What this practically means

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Executive summary

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This was a first appeal, with a cross-appeal, from a judgment of the Employment and Labour Relations Court at Nairobi (Manani J., 22nd July 2024) awarding a former General Manager relief for constructive dismissal after he was unilaterally subjected to a 25% salary cut in April 2020, sent on indefinite unpaid leave during the Covid-19 pandemic, stripped of medical cover, and effectively replaced before resigning in October 2020. The Court of Appeal (Karanja, Tuiyott and Achode JJA) unanimously upheld the finding of constructive dismissal, holding that the employer's unilateral variation of remuneration without consultation amounted to repudiation of the contract under sections 10(5) and 13 of the Employment Act. However, the Court varied the award: it set aside compensation for underpayment of salary because the respondent, as General Manager, had participated in the decision and the reduction applied to all staff; it reduced pay in lieu of notice from two months to one under section 35(1)(c); and it recalculated the salary-arrears and 10-month compensation awards on the reduced salary of Kshs. 157,848.00. Allowing the cross-appeal in part, the Court awarded service pay of Kshs. 1,281,937.50, holding that the employer's admitted practice and willingness to pay service pay was not barred by section 35(6). It declined annual leave pay under section 28(4), general, aggravated and exemplary damages, enhanced compensation of 12 months, and interest from the date of filing suit. Each party was ordered to bear its own costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the respondent was constructively dismissed?
  2. 2.If so, what are the reliefs that the respondent is entitled to?

Key legal issues

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01

Whether the respondent was constructively dismissed

Holding

Yes. The employer's unilateral salary reduction, indefinite unpaid leave without consultation, termination of medical cover, request for return of work items and installation of a replacement demonstrated an intention not to be bound by the contract, amounting to repudiatory breach and constructive dismissal.

Reasoning

Applying Western Excavating and Leena Apparels, the court held that constructive dismissal turns primarily on the employer's conduct. The appellant kept the respondent in the dark for about five months without salary, replaced him substantively, and told the US Embassy he had left its employment. The conduct showed an intention not to be bound by the contract and constituted repudiation justifying the respondent's resignation. The court agreed with the trial judge's analysis and conclusion.

p. 8
02

Whether the unilateral salary cut and unpaid leave were lawful

Holding

No. There was no evidence of consultation or approval by the respondent; salary is a fundamental term whose reduction cannot be imposed arbitrarily or unilaterally.

Reasoning

Relying on Gatuma v Kenya Breweries and the authorities cited therein, the court held that unilateral changes to remuneration without informing the employee amount to an unfair labour practice and may amount to constructive dismissal. The memo reducing salary and the email sending the respondent on unpaid leave were issued without consultation or approval, so the trial judge's award of salary for the five months of unpaid leave was upheld.

p. 10
03

Entitlement to service pay despite section 35(6) of the Employment Act

Holding

The respondent was entitled to service pay because it was the appellant's established practice and the appellant's witnesses expressly admitted willingness to pay it.

Reasoning

Although section 35(6) disentitles NSSF-registered employees from statutory service pay, the court held that an employer's voluntary, admitted willingness to pay service pay as a practice is not contrary to statute; nothing stops an employer from being more generous than the Act requires. DW1 and DW2 expressly testified the appellant was willing to pay, so the cross-appeal succeeded on this head and service pay was awarded as pleaded.

p. 12
04

Whether damages for discrimination and general, aggravated and exemplary damages were available

Holding

No. Section 49 of the Employment Act provides sufficient specific remedies for the injury of unfair termination, and general damages are not available for breach of contract.

Reasoning

The court endorsed the trial judge's finding that the matters raised pointed to breach of the employment contract adequately redressed under the Employment Act. Since the law provides a specific remedy of compensation for unfair termination, the additional heads of damages could not be granted. The court also found the respondent failed to discharge the burden of proving discrimination on a prohibited ground, as his own conduct in managing the crisis negated any discriminatory treatment.

p. 12

Legal principles established

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  • Unilateral variation of an employment contract's terms, including remuneration, without the employee's consent amounts to repudiation and, where it leads to termination, constructive dismissal and an unfair labour practice
  • An employer who is willing to pay service pay as an established practice may do so notwithstanding section 35(6) of the Employment Act, as nothing prevents an employer from being more generous than the statute requires
  • Where an employee on a fixed-term contract continues working after expiry with the employer's knowledge and without a new contract or formal termination, the engagement converts to a continuous indefinite relationship attracting the notice protections of section 35 of the Employment Act
  • Leave days not utilised within 18 months of the leave earning period, as prescribed by section 28(4) of the Employment Act, are forfeited unless the employee shows he applied for the leave and was denied

Court orders

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  1. 1.Award of pay for the period 1st May to 30th September 2020 at Kshs. 157,848.00 per month, totalling Kshs. 789,240.00
  2. 2.Pay for the 12 days of October 2020 at Kshs. 63,139.00
  3. 3.Compensation for unfair termination of 10 months at the reduced salary of Kshs. 157,848.00, totalling Kshs. 1,578,480.00
  4. 4.One month's pay in lieu of notice of Kshs. 157,848.00
  5. 5.Service pay of Kshs. 1,281,937.50 as pleaded
  6. 6.Setting aside of the award for underpayment of salary
  7. 7.Substitution of two months' notice pay with one month's notice pay
  8. 8.Each party to bear its own costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
Employment and Labour Relations Court, Nairobi
Not stated in the judgment
Jurisdiction invoked
First appeal to the Court of Appeal from the Employment and Labour Relations Court

Relief refused

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Compensation for underpayment of salary (April to October 2020)

The respondent, as General Manager, was part of the decision-making on the salary reduction which applied to all employees, so no discrimination was visited on him

p. 10

Annual leave pay for untaken leave days

By section 28(4) of the Employment Act the balance of leave had to be taken within 18 months of the leave earning period, and the respondent gave no evidence that he applied for leave and was denied

p. 11

General, aggravated and exemplary damages

Section 49 of the Employment Act provides sufficient specific remedies for breach of the employment contract; general damages are not ordinarily available for breach of contract

p. 12

12 months' compensation instead of 10 months

The respondent did not demonstrate that the trial judge failed to exercise discretion judiciously or proceeded on wrong principles

p. 11

Interest from the date of filing suit on pay in lieu of notice and salary arrears

Award of interest from date of suit to date of decree is a matter of judicial discretion and no capricious exercise was shown

p. 13

Two months' pay in lieu of notice

Section 35(1)(c) entitles a monthly-paid employee to one month's notice only; no justification existed for two months

p. 12

Costs

Each party shall bear its own costs. It is so ordered.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

From the provisions of Section 10(5) and Section 13 of the Act, it is clear that any unilateral variation of the terms of an employment contract may be deemed as a repudiation of the contract and where it would lead to termination of employment it may be deemed as constructive dismissal.
p. 9Unilateral variation of employment terms
We do not perceive the employer's willingness to pay service pay as contra statute as nothing stops the employer from being more generous than required of him/her by the Act.
p. 12Service pay and section 35(6) of the Employment Act
This continued engagement with the employer's knowledge and without a new contract or formal termination, implies a tacit renewal on the same terms but for an indefinite period, granting him the rights and protections of an on - going employee.
p. 12Conversion of expired fixed-term contract to indefinite employment
Each party shall bear its own costs. It is so ordered.
p. 13Final orders and costs

Issues in the judgment

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minor

The judgment states the respondent was employed 'from 1st December 2011' in one passage but the trial court's finding records the contract running 'from 1st December 2014', and the notice analysis refers to the contract expiring and continuing 'from the year 2014 to 2020', creating an internal inconsistency on the start date of employment.

minor

The arithmetic in the recalculated award for May to September 2020 does not tally: 157,848.00 x 5 months is stated as 'Kshs.789, 240.00' when it computes to Kshs. 789,240.00 only if the figure were 157,848 x 5 = 789,240, which is actually correct arithmetically; however, the stated figure of 789,240 for five months at 157,848 is inconsistent (157,848 x 5 = 789,240 exactly, so the apparent discrepancy is only in the formatting), while the service pay award is rendered inconsistently as 'kshs.1,281,937.50' versus the pleaded 'kshs.1,281,937.50' with irregular spacing.

minor

The judgment variously describes the contract as a fixed-term three-year contract that was 'not renewable' and then as one with 'legitimate expectations of renewal', and states the notice provision as section 35(1)(c) equating to one month's notice while the memorandum of appeal complains of an award of 'a month's salary of Kshs. 290,250', mixing references to gross and reduced salary figures.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Bins (Nairobi) Services Limited v Hardard Macharia Kariamburi (Civil Appeal E670 of 2024) [2025] KECA 1726 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1726/eng@2025-10-24

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