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ELRCDismissedMemorandum of Claim dated 21st November 2022 (ELRC, Nairobi)· [2025] KEELRC 1604 (KLR)

Mwangi v Newbold Garage Limited (Cause E857 of 2022) [2025] KEELRC 1604 (KLR)

Employment and Labour Relations Court
27 May 2025
HWHellen Wasilwa
3,493 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 dismissed a constructive dismissal claim because the worker couldn't prove whether she resigned or was fired, and share disputes belong elsewhere.

What this practically means

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Executive summary

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The claimant, who described herself as a director-shareholder and employee of the respondent company, sued for declarations of constructive termination on 10th August 2022, twelve months' salary, salary in lieu of notice, car hire expenses, release of motor vehicle KBF 764E, damages for its detention, and a declaration of entitlement to dividends. The respondent denied that she was a director or shareholder, asserted that the sole shareholder was John Newbold, admitted only an employment relationship with a monthly salary of Kshs. 21,000, and contended that an audit had revealed customer payments of over Kshs. 2,000,000 channelled through the claimant's personal account. It maintained that her employment was never terminated and that she absconded, and that the vehicles were withheld pending proof of ownership. Both parties filed submissions. The court framed two issues: whether the claimant was terminated and whether such termination was fair, and whether she was entitled to the remedies sought. It found an admitted employment relationship but noted the respondent's breach of Sections 9(1), (2) and (3) of the Employment Act by failing to issue a written contract, attracting Section 10(7). However, the claimant did not demonstrate the repudiatory conduct that drove her from employment, and the resignation email alluded to by the respondent was never produced. The court could not ascertain whether she resigned or was dismissed and held unfair termination unproven. It also ruled it lacked jurisdiction over shareholding, directorship and dividends. The claim was dismissed with no costs.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

The court could not establish whether the claimant resigned or was dismissed; constructive dismissal and unfair termination were not proved.

Reasoning

The claimant pleaded constructive termination but did not explain the specific act or omission of the respondent that drove her from employment. The respondent alluded to a resignation email dated 11/8/2022 but neither party produced it. In the absence of that evidence, the mode of exit was indeterminable and unfair termination could not be established.

p. 8
02

Jurisdiction over shareholding, directorship and dividends

Holding

The ELRC lacks jurisdiction to determine issues of company shareholding, directorship and dividends.

Reasoning

The court accepted it had jurisdiction over the employment relationship, which the respondent admitted, but held that the claims touching on directorship, shareholding and dividends arise out of company law and must be pursued in a different forum.

p. 7
03

Employer's statutory duty to issue a written contract

Holding

The respondent breached Sections 9(1), (2) & (3) of the Employment Act by never issuing the claimant an employment letter.

Reasoning

The respondent admitted the employment relationship through its letter of 22nd August 2022 and RW1's testimony on salary and commission. Having conceded employment, it was obliged to issue a written contract stating particulars of employment, which it never did, attracting the burden-shifting consequence of Section 10(7).

p. 7
04

Entitlement to remedies for unfair termination

Holding

Remedies for unfair termination are unavailable where the fact of dismissal is not proved.

Reasoning

Having found that it could not determine whether the claimant resigned or was dismissed, the court held it was equally unable to determine the remedies available for wrongful dismissal and declined all the reliefs sought, dismissing the suit.

p. 8

Legal principles established

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  • Where an employer fails to produce a written contract or particulars of employment, the burden of proving or disproving an alleged term of employment lies on the employer
  • Contracts of service of three months or more must be in writing

Court orders

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  1. 1.Dismissal of the claim
  2. 2.No costs awarded

Authorities

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Legislation

  • Employment ActSection 35
  • Employment ActSections 41, 43 and 45
  • Employment ActSections 9(1), (2) & (3)
  • Employment Act 2007Section 10(7)
  • Employment and Labour Relations ActSection 12

Cases cited (4)

  • Coca Cola East Africa & Central Africa v Maria Kagai Ligaga
    [2015] eKLR
  • Milton M Isanya versus Aga Khan Hospital Kisumu
    (2017) eKLR
  • Walker -v- Josiah Wedgwood & Sons Ltd.
    [1978] IRLR 105
  • Republic vs Rosemary Wairimu Munene, Ex-Parte Applicant Vs Ihururu Dairy Farmers Co-operative Society Ltd Judicial Review application no 6 of 2014
Jurisdiction invoked
Section 12 of the Employment and Labour Relations Act

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, "Mwangi v Newbold Garage Limited (Cause E857 of 2022) [2025] KEELRC 1604 (KLR)", Case Analysis (2025). Memorandum of Claim dated 21st November 2022 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1604/eng@2025-05-27

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