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ELRCPartially AllowedMombasa MCELRC Appeal (number not stated in judgment)

Milly Fruit Processors Limited v Matete (Appeal E006 of 2025) [2025] KEELRC 1237 (KLR)

Employment and Labour Relations Court
30 April 2025
MMM. MBARŨ
1,423 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court has ruled that an employee who resigns voluntarily, after being reinstated, cannot claim constructive dismissal or severance pay.

What this practically means

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Executive summary

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This first appeal challenged the magistrates' court judgment of 31 July 2024 in Mombasa MCELRC No. E298 of 2020, which had found that a carpenter employed from 2011 proved constructive dismissal and awarded him Ksh 200,077 with costs and interest. The employee was suspended on 6 November 2018 over alleged theft of 39 pieces of metal worth Ksh 191,929, was arrested and released on police bail, and his suspension was extended pending investigations. On resuming duty he sought clarification of the investigations; the human resources manager allegedly directed him to resign, and he tendered his resignation on 6 February 2019. The magistrate held that the employee suffered psychological stress under intolerable working conditions. On appeal, Mbarũ J applied the Court of Appeal decisions in Leena Apparels (EPZ) Limited v Nyevu Juma Ndokolani and Maingi v Bridge International Academy Limited, holding that constructive dismissal requires employer conduct amounting to a repudiatory breach. The court found the employee had served his suspension, answered the notice to show cause, and been reinstated; the outstanding police investigation was outside the employer's control, and the employee's perception that he was treated as a thief was imaginary. None of the claimed remedies was due: severance accrues only on redundancy, leave pay was addressed in the letter accepting the resignation, and gratuity required a contractual or policy basis that was absent. The appeal was allowed, the trial judgment set aside, and costs of the appeal awarded to the appellant.

Questions the Court framed

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

  1. 1.Whether the learned magistrate erred in finding that the respondent had proven a case for constructive dismissal
  2. 2.Whether the learned magistrate erred in awarding the remedies sought without providing any, or any lawful basis, for the award
  3. 3.Whether notice pay, severance pay, leave pay and gratuity were due to the respondent

Key legal issues

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01

Whether the respondent's resignation amounted to constructive dismissal

Holding

No - the respondent had served the suspension, replied to the notice to show cause, and was reinstated to work; the pending police matter was outside the employer's control and the employer did its part internally

Reasoning

The court reviewed the record as a first appeal. The respondent resumed duty after the suspension, and the employer allowed him back to work. The unresolved criminal investigation was with the police and not within the appellant's control. The respondent's perception that he was regarded as a thief was held to be imaginary; any psychological distress was of his own making and could not be attributed to the employer. His resignation was therefore voluntary, not induced by repudiatory breach.

p. 3
02

Whether the remedies awarded by the trial court had a lawful basis

Holding

None of the claimed remedies was due - notice pay and damages fell away with the dismissal of the constructive dismissal claim; severance accrues only on redundancy; leave pay was addressed by the acceptance letter; gratuity had no contractual or policy basis

Reasoning

Having found no constructive dismissal, notice pay and damages for constructive dismissal were not due. Severance pay is tied to redundancy. The letter of 2 March 2019 accepting the resignation offered 30 accrued leave days plus 22 off days, less statutory dues, which the court held addressed any leave claim. No evidence of a gratuity benefit existed. The trial court's award of Ksh 200,077 therefore lacked any lawful basis.

p. 4

Legal principles established

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  • Constructive dismissal arises only where the employer's conduct constitutes a repudiatory breach of the employment contract; the issue is primarily the employer's conduct, not the employee's, unless waiver, estoppel or acquiescence is in issue
  • Severance pay accrues only upon a declaration of redundancy and does not arise under constructive dismissal
  • Gratuity is payable only where provided under the employer's contract, collective agreement or policy

Court orders

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  1. 1.The appeal is allowed
  2. 2.The trial court judgment is set aside
  3. 3.The appellant is awarded the costs of the appeal

The bench

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

MM
majority

Wrote the judgment

On appeal from
Employment and Labour Relations Court (Magistrate's Court, Mombasa)
Mombasa MCELRC No. E298 of 2020
Jurisdiction invoked
First appeal from the magistrates' court (MCELRC) under the Employment and Labour Relations Court's appellate jurisdiction

Relief refused

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Respondent's award of Ksh 200,077 with costs and interest (notice pay, severance, leave pay, gratuity, damages)

Not a ripe case of constructive dismissal; the employer reinstated the employee and the resignation was voluntary; severance accrues only on redundancy; gratuity requires a contractual, collective agreement or policy basis; the employer's letter offering accrued leave days addressed remaining claims

p. 3

Costs

The appellant is awarded the costs of the appeal

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.

The concept of constructive dismissal only arises where the employer's conduct is such that it constitutes a repudiatory breach of the employment contract.
p. 2Definition of constructive dismissal
This is not a ripe case of constructive dismissal.
p. 3Finding on constructive dismissal
The appeal is meritorious, and the trial court judgment is hereby set aside. On this basis, the appellant is awarded the costs of the appeal.
p. 4Final orders - disposition

Issues in the judgment

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minor

Dates of return to work are inconsistently stated in the judgment

minor

The judgment does not state the appeal case number or the names of the parties

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, "Milly Fruit Processors Limited v Matete (Appeal E006 of 2025) [2025] KEELRC 1237 (KLR)", Case Analysis (2025). Mombasa MCELRC Appeal (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1237/eng@2025-04-30

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