Bins (Nairobi) Services Limited v Hardard Macharia Kariamburi (Civil Appeal E670 of 2024) [2025] KECA 1726 (KLR)
The bottom line
#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
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent was constructively dismissed?
- 2.If so, what are the reliefs that the respondent is entitled to?
Key legal issues
#Whether the respondent was constructively dismissed
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.
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.
Whether the unilateral salary cut and unpaid leave were lawful
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.
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.
Entitlement to service pay despite section 35(6) of the Employment Act
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.
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.
Whether damages for discrimination and general, aggravated and exemplary damages were available
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.
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.
Legal principles established
#- 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
#- 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.Pay for the 12 days of October 2020 at Kshs. 63,139.00
- 3.Compensation for unfair termination of 10 months at the reduced salary of Kshs. 157,848.00, totalling Kshs. 1,578,480.00
- 4.One month's pay in lieu of notice of Kshs. 157,848.00
- 5.Service pay of Kshs. 1,281,937.50 as pleaded
- 6.Setting aside of the award for underpayment of salary
- 7.Substitution of two months' notice pay with one month's notice pay
- 8.Each party to bear its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- 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
#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
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
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
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
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
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
Costs
Each party shall bear its own costs. It is so ordered.
Quotable passages
#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.
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.
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.
Each party shall bear its own costs. It is so ordered.
Issues in the judgment
#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.
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.
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
#Practical implications
#Frequently asked questions
#Cite this brief
#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.