Mbalasi v CMC Holdings Limited & another (Cause 78 of 2020) [2022] KEELRC 155 (KLR)
The bottom line
#Kenya's Employment Court ruled that a resignation forced by a hostile workplace counts as unfair dismissal, awarding the employee nearly Kshs. 10 million.
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 petition meets the competence threshold for a constitutional reference
- 2.Whether the petitioner resigned voluntarily or he was constructively dismissed by the respondents
- 3.Whether the respondents violated the constitutional rights of the petitioner during the termination
- 4.Whether the petitioner is entitled to the reliefs sought
Key legal issues
#Competence of the constitutional petition (Anarita Karimi Njeru threshold)
The amended petition met the competence threshold; the respondents did not pursue the objection after amendment.
The respondents argued, citing Anarita Karimi Njeru and Mumo Matemu, that the pleadings lacked precision on the violations alleged. The court noted that after the amendment of the petition on 1st October 2020 the respondents did not pursue the objection, and held that any loophole was cured by the amendment. The petitioner had pleaded with some degree of precision the constitutional provisions breached and the manner of violation.
Whether constitutional petition was the proper vehicle
The claim being essentially one of constructive dismissal, the court treated the petition as an ordinary suit.
Applying Speaker of the National Assembly v Karume and Uhuru Muigai Kenyatta v Nairobi Star, the court held that where a remedy exists under ordinary legislation, constitutional adjudication should be avoided. The primary reliefs sought were declarations on constructive dismissal, damages and reinstatement, despite references to Articles 41, 47 and 50. The court therefore treated the petition as an ordinary suit and the grounds of opposition as a defence.
Voluntary resignation versus constructive dismissal
The resignation was forced by the employer's conduct and amounted to constructive dismissal and unfair termination.
The resignation letter attributed the exit to a poor working relationship with the Line Manager who was unsupportive and whose conduct the respondents failed to address. The employer initiated disciplinary proceedings only after the resignation, alleging forgery, yet the procuring authority had exonerated the company. The Line Manager did not testify to dispute the poor relationship. The onus on the employee under the Coca Cola v Ligaga tests (unreasonableness and contractual) was discharged.
Whether constitutional rights were violated
The court did not make the constitutional declarations sought; the claim was resolved as an ordinary unfair termination claim.
Although the petitioner pleaded violations of Articles 41, 47 and 50, the court declined to grant the further declaratory orders, treating the dispute as a normal employment claim. Compensation was granted under section 49(1) of the Employment Act on the basis of 18 years of service and a clean record, rather than on constitutional violation findings.
Remedies
Twelve months' gross salary as compensatory damages, accrued commission and a one-way air ticket awarded; other heads declined.
Compensation under section 49(1) was set at twelve months' gross salary considering long service of 18 years and the admission that the petitioner had a clean record. Commission was awarded because it was acknowledged by management, limited to the amount pleaded. Notice pay, anticipatory salary, gratuity and two return tickets per year were declined for lack of proof or legal basis.
Legal principles established
#- Where an employee resigns because the employer's conduct made the work environment intolerable, the resignation is not voluntary and amounts to constructive dismissal, which is unfair termination for lack of valid reason and fair procedure under section 45 of the Employment Act.
- A unilateral resignation by an employee takes effect on the lapse of the notice period unless withdrawn before then, and the employer's later acceptance letter is of no effect on that resignation.
- An employer has the right to waive the services of an employee during the notice period while still paying the salary.
Court orders
#- 1.Declaration that the petitioner was constructively dismissed from employment by the respondents
- 2.Declaration that the dismissal amounted to unfair termination within the meaning of section 45 of the Employment Act
- 3.Compensatory damages of twelve months' gross salary, Kshs. 8,804,940 (entered as Kshs. 8,804,949)
- 4.Accrued commission of Kshs. 932,250
- 5.One-way air ticket to Nairobi of $400 (Kshs. 46,140 at the prevailing Central Bank of Kenya exchange rate)
- 6.Judgment entered for the petitioner against the respondents jointly and severally for a total of Kshs. 9,783,339, subject to statutory deductions
- 7.Costs of the suit to the petitioner plus interest at court rates from the date of the judgment
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original constitutional and employment jurisdiction of the Employment and Labour Relations Court; reliefs anchored on Articles 41, 47 and 50 of the Constitution and sections 45 and 49(1) of the Employment Act
Relief refused
#Injunctions restraining hiring of a replacement, stay of disciplinary proceedings and restraint against termination of the residential lease; order for reinstatement; further declaratory orders on constitutional violations
Overtaken by events or not merited
Three months' salary in lieu of notice
Petitioner was paid full salary for the whole notice period as the employer waived his services
Anticipatory salary and benefits until retirement in 2026
Lack of any legal or contractual basis
Gratuity
Petitioner did not prove he was in the union to which the gratuity letter applied
Two return air tickets per year as claimed
Petitioner did not prove he was not given the tickets before dismissal; only a one-way ticket awarded
Costs
The petitioner is awarded costs of the suit plus interest at court rates from the date of the judgment.
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.
I therefore find and hold that the resignation was forced on the petitioner by his employer and as such it amounted to constructive dismissal.
Constructive dismissal in whichever way one looks at it is unfair for lack of valid reason and fair procedure. The employee is simply bundled out of his employment without his will.
I will therefore treat the petition as an ordinary suit and the responses by the respondent as defence to the suit.
In conclusion, I enter judgment for the petitioner against the respondents, jointly and severally in the following terms:
The above award is subject to statutory deductions. The petitioner is awarded costs plus interest at court rates from the date hereof.
It is trite that employer has the right to waive the services of an employee during the notice period.
Issues in the judgment
#Inconsistent dates: the petition narrative states the resignation was served on 27th February 2010, whereas the resignation letter and all evidence are dated 27th February 2020.
Discrepancy between the assessed compensation (Kshs. 8,804,940) and the amount entered in the final orders (Kshs. 8,804,949).
The parties are referred to variously as petitioner/respondent and claimant without a formal title or case number identifying the individual parties by name in the judgment extract.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbalasi v CMC Holdings Limited & another (Cause 78 of 2020) [2022] KEELRC 155 (KLR)", Case Analysis (2022). Not stated in judgment (ELRC Petition, Nakuru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/155/eng@2022-04-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.