Nangabo v Sana Industries Limited & another (Cause E430 of 2022) [2025] KEELRC 2117 (KLR)
The bottom line
#A Kenyan court ruled that suspending an employee indefinitely without pay or a hearing counts as constructive dismissal, awarding him over Kshs 2.6 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 Claimant proved his case on a balance of probabilities, including whether his actions amounted to constructive dismissal
- 2.Whether there was discrimination and unfair labour practices during the Claimant's employment
- 3.Whether the Claimant is entitled to the reliefs sought
- 4.Which party should bear the costs of the claim
Key legal issues
#Whether the Claimant was constructively dismissed
Constructive dismissal proved; the indefinite suspension, stoppage of salary and denial of a disciplinary hearing amounted to constructive termination and condemned the Claimant unheard.
The court found the Respondents suspended the Claimant indefinitely, never lifted the suspension, never invited him to a disciplinary hearing despite promised one, and stopped his salary. These conduct indicators showed the employer intended to sever the relationship. The Claimant was thus constructively dismissed and condemned unheard, contrary to fair procedure under Sections 41 and 43 of the Employment Act.
Whether the Claimant proved discrimination
Not proved; no evidence was led showing denial of leave or unequal pay attributable to race or that comparable Korean managers were paid Kshs 800,000.
The court accepted the Respondents' submission that discrimination is a factual allegation requiring evidence. The Claimant produced no payslips, contracts or job descriptions comparing himself to the alleged Korean managers, and no complaint of discriminatory conduct in over 12 years of service. The discrimination declaration was therefore refused.
Entitlement to house allowance
Awarded at 15% of salary (Kshs 24,000 monthly) for 36 months totalling Kshs 864,000, the rest of the claim being time barred; the employer's failure to issue a written contract shifted the burden to it.
Relying on Section 10(7) of the Employment Act, the court held that the Respondents, having produced no written contract, bore the burden of disproving the alleged term. It could be assumed there was no house allowance provision, entitling the Claimant to 15% of his salary, but limited to 36 months due to limitation.
Compensation for unfair termination
Awarded 10 months' salary (Kshs 1,600,000) given the inhumane treatment after over 16 years of service.
Having found constructive dismissal proved, the court exercised its discretion under Section 49 of the Employment Act, awarding 10 of a possible 12 months' salary, citing the inhumane manner in which the Respondents treated a long-serving employee.
Leave claim
Awarded leave not taken in the last year only, at Kshs 160,000.
Although the Claimant claimed leave for the entire employment period, the court limited the award to leave not taken in the last year, consistent with the limitation principles urged by the Respondents under Section 28(4) of the Employment Act.
Legal principles established
#- Where an employer fails to produce a written contract or written particulars, the burden of proving or disproving an alleged term of employment stipulated in the contract is on the employer.
- Stoppage of an employee's salary coupled with indefinite suspension without a disciplinary hearing points to constructive termination and condemnation unheard.
- In the absence of an employment contract, it can be assumed there was no provision for payment of house allowance, entitling the employee to house allowance at 15% of salary.
Court orders
#- 1.Declaration that the Respondents' actions amounted to constructive dismissal
- 2.House allowance at 15% of salary for 36 months: Kshs 864,000, the rest of the house allowance claim being time barred
- 3.Compensation for unfair termination of 10 months' salary: Kshs 1,600,000
- 4.Payment for leave not taken in the last year: Kshs 160,000
- 5.Total award of Kshs 2,624,000 less statutory deductions
- 6.Respondents to pay costs of the suit plus interest at court rates with effect from the date of judgment
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (Employment Act, 2007; employer-employee relationship)
Relief refused
#Claim of Kshs 64,000,000 and related dues for alleged role as 2nd Respondent's General Manager
Claimant failed to adduce evidence that he served as the 2nd Respondent's General Manager
House allowance for the full period from October 2005 to October 2021
Claim limited to 36 months; the rest of the claim was time barred
Dues from October 2021 to retirement age (claims of Kshs 28,800,000 and Kshs 144,000,000)
Law does not envision compensation to retirement age; only a maximum of 12 months' salary compensation
Compensation for unlawful arrest, psychological trauma and financial hardship
Not awarded in the final orders; a tortious claim outside the employer-employee relationship per the Respondents' submissions
Unpaid statutory deductions claim
Claimant led no evidence of non-remittance; such dues properly claimed by statutory bodies
Special damages of Kshs 97,000
Not pleaded and proved with evidence such as receipts
General damages and declaration of discrimination
Claimant did not prove discrimination on a balance of probabilities
Costs
The respondent will pay costs of this suit plus interest at court rates with effect from the date of this 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.
The stoppage of the claimant’s salary by the respondents is in my view is an indication that the respondent intended to severe their relationship with the claimant which they did and which in my view points to constructive termination.
The claimant was never subjected to any disciplinary hearings and was thus condemned unheard.
the claimant is entitled to payment of house allowance at 15% of his salary = 15/100x160,000= 24,000x36 months =kshs 864,000/- the rest of the claim being time barred.
given the inhumane manner in which the respondent treated him after serving them for over 16 years, I find 10 month’s salary as adequate which I grant at 10x160,000= 1.6 million.
Total payable= kshs 2,624,000/- less statutory deductions. The respondent will pay costs of this suit plus interest at court rates with efiect from the date of this judgment.
Issues in the judgment
#The Respondents' pleadings state the suspension and arrest events occurred in 'October 2022' while elsewhere the judgment and pleadings date them October 2021, an internal inconsistency in dates.
The Respondents' pleading says the employment contract 'automatically terminated' by absconding, yet their own witness confirmed the suspension was never lifted and no disciplinary hearing was ever held, which the court treated as constructive dismissal.
The judgment does not state the court file/case number of the claim; only the Memorandum of Claim date of 22nd June 2022 is given.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nangabo v Sana Industries Limited & another (Cause E430 of 2022) [2025] KEELRC 2117 (KLR)", Case Analysis (2025). Employment and Labour Relations Claim dated 22nd June 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2117/eng@2025-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.