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ELRCPartially AllowedEmployment and Labour Relations Claim dated 22nd June 2022· [2025] KEELRC 2117 (KLR)

Nangabo v Sana Industries Limited & another (Cause E430 of 2022) [2025] KEELRC 2117 (KLR)

Employment and Labour Relations Court
16 July 2025
6,604 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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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

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Executive summary

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The Claimant, employed by the 1st Respondent as a Graphics Designer in 2005, claimed constructive dismissal, discrimination and unfair labour practices after a 13/14 October 2021 incident in which he was issued a warning letter, accused of stealing printing plates, arrested, released on police bail without charge, suspended indefinitely, and never recalled or invited to a disciplinary hearing. He sought declarations, 12 months' salary, dues as alleged General Manager of the 2nd Respondent, house allowance, dues to retirement age, compensation for unlawful arrest and trauma, unpaid leave, statutory deductions, special and general damages, costs and interest. The Respondents contended he absconded after a warning letter, thereby terminating his contract by conduct, denied discrimination, and argued no evidence supported the claims. The court found the stoppage of the Claimant's salary, the indefinite never-lifted suspension and the failure to hold any disciplinary hearing amounted to constructive dismissal, condemning him unheard. Discrimination was not proved for want of evidence. House allowance was awarded at 15% of salary for 36 months (Kshs 864,000, the rest time barred) because the Respondents produced no written contract, shifting the evidentiary burden to them under Section 10(7) of the Employment Act. Compensation of 10 months' salary (Kshs 1,600,000) was awarded for the inhumane treatment after 16 years of service, plus Kshs 160,000 for leave not taken in the last year, totalling Kshs 2,624,000 less statutory deductions, with costs and interest from the date of judgment.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Constructive dismissal proved; the indefinite suspension, stoppage of salary and denial of a disciplinary hearing amounted to constructive termination and condemned the Claimant unheard.

Reasoning

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.

p. 12
02

Whether the Claimant proved discrimination

Holding

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.

Reasoning

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.

p. 8
03

Entitlement to house allowance

Holding

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.

Reasoning

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.

p. 13
04

Compensation for unfair termination

Holding

Awarded 10 months' salary (Kshs 1,600,000) given the inhumane treatment after over 16 years of service.

Reasoning

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.

p. 13
05

Leave claim

Holding

Awarded leave not taken in the last year only, at Kshs 160,000.

Reasoning

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.

p. 13

Legal principles established

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  • 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

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  1. 1.Declaration that the Respondents' actions amounted to constructive dismissal
  2. 2.House allowance at 15% of salary for 36 months: Kshs 864,000, the rest of the house allowance claim being time barred
  3. 3.Compensation for unfair termination of 10 months' salary: Kshs 1,600,000
  4. 4.Payment for leave not taken in the last year: Kshs 160,000
  5. 5.Total award of Kshs 2,624,000 less statutory deductions
  6. 6.Respondents to pay costs of the suit plus interest at court rates with effect from the date of judgment
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment and labour relations disputes (Employment Act, 2007; employer-employee relationship)

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, "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.