Isaiah Okoth v Africa Biosystems Limited

(c) that the Claimant was to be paid a fixed monthly package of US Dollars (USD) 20,833/=, and was entitled to a variable pay depending on the company’s performance. (d) that despite working diligently, the Claimant ran into problems with (the Respondent’s) Directors on baseless grounds, and was on 6th February, 2023 (15 months into his contract) served with a show cause letter from the Respondent’s Director (Mr. Alexis Claude) on allegations of:(i) unilateral authorization of increase in DRAFT pension deductions. (ii) unilateral authorization of increase in paid vacation days. (iii) failure to place the Chief Finance Office (CFO) on a performance improvement plan. (iv) approval of salary advance for a new employee in contravention of the organization’s policies that prohibit loans to staff members. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 2 of 32

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(v) failure to update the budget of the company in good time. (e) that the Respondent responded to the show cause letter on 9th February, 2023; in detail. (f) that without paying any attention to the detailed response to Respondent the show cause maliciously letter, the instigated a disciplinary hearing against the Claimant vide a letter dated 17th February, 2023. (g) that the Claimant was greatly affected by the malicious witch-hunt and was emotionally DRAFT drained as the work environment was no longer conducive to him; and was unable to continue carrying on his duties due to break down of communication between him and the Respondent’s directors, the malicious allegations levelled against him, and that the Respondent ignored his explanation on the accusations. (h) that the Claimant unwillingly tendered his resignation vide his letter dated 21st February, 2023. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 3 of 32

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(i) that the Respondent’s actions amounted unlawful constructive termination of to the Claimant’s employment as all the allegations made against him were false, baseless and unsubstantiated. (j) that in response to the Claimant’s resignation letter, the Respondent issued a letter of a clearance to the Claimant, dated 1st March, 2023, and bound itself to pay the Claimant:(i) Basic salary for 23 days worked in February 2023…………… USD 17,112.82. DRAFT (ii) Six (6) months pay in lieu of notice ……… USD 124,998. (iii) 35 accrued [and] unutilized leave days …… USD 26,041. (iv) Pension contribution from January 2022 to February 2023 (for both employer and employee) …………… USD 41,590.56. (v) Car refund for vehicle purchase top-up paid in March Kshs.1,147,896.98. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 4 of 32 2021 ………

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(k) that the Respondent promised to pay all the amounts on 1st March, 2023 into the Claimant’s salary account, save for the pension which it promised to pay on 10th March, 2023 to Britam Wealth Fund as instructed by the Claimant. (l) that vide its emails dated 23rd February, 2023 and 12th June, 2023, the Respondent’s Human Resource Manager provided the Claimant with his final dues and pension calculations, and confirmed having deducted the Claimant’s pension contributions from his final dues. DRAFT (m) that to-date, the Respondent has failed and/or neglected to pay the Claimant’s pension dues despite deducting contribution on the same from the Claimant’s terminal dues, and despite demand. (n) that the Respondent outrightly Claimant’s claim for pension admitted dues vide the its Advocates’ letter dated 26th April, 2023, vide which they pleaded for payment of the said dues (by the Respondent) by two equal instalments, JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 5 of 32

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which request the Claimant accepted vide his Advocates’ letter dated 5th May, 2023. (o) that the Claimant did not voluntarily resign, but was constructively Respondent by dismissed way of by the harassment, inequitable treatment, embarrassment and emotional distress. (p) that the Respondent’s acts amounted to a repudiatory breach of the Claimant’s contract; and that the procedure adopted by the Respondent in handling the allegations against the Claimant DRAFT deviated from the standard provided in law and the Respondent’s Manual. 2. The Claimant sought the following reliefs:(a) Twelve (12) months salary being compensation for constructive termination ………………… USD ……………………… USD 249,996. (b) Pension contribution 41,590.56. (c) Underpayment of leave 1,488.10. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 6 of 32 days …………… USD

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(d) Payment of remainder of the contract term (USD 20,833 x 43 months and 7 days) …………………… USD 900,680. 3. (e) General damages. (f) Costs of the suit. (g) Interest on all claimed sums at Court rates. Documents filed alongside the Statement of Claim included an affidavit in verification of the claim, the Claimant’s witness statement dated 5th September, 2023 and an evenly dated list of documents. The listed documents included DRAFT copies of the Claimant’s contract, the Respondent’s Human Resource Policies and Procedures Manual, the show cause letter dated 6th February, 2023 and the Claimant’s response thereto dated 9th February, 2023, letters dated 17th & 21st February, 2023 respectively, letter dated 1 st March, 2023 and emails dated 23rd February, 2023 and 12th June, 2023 respectively, among other documents. 4. The Respondent defended the suit vide a Memorandum of Response dated 8th November, 2023, vide which it also raised a Counter-claim against the Claimant. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 7 of 32

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5. In response to the Claimant’s claim, the Respondent admitted having employed the Claimant vide a contract dated 14th June, 2021 and commencing on 1st October, 2021; and pleaded, inter-alia:(a) that the Claimant did not perform his work diligently and was derelict in performing his duties, resulting in great financial losses. (b) that the allegations made against the Claimant were valid and that the Respondent had an administrative prerogative to invoke its DRAFT disciplinary processes. (c) that the Claimant did not report any frustrations by the Respondent’s directors or any grievance during the period of his employment. (d) that because of the seriousness of the allegations raised against the Claimant and the insufficiency of the written answers that he provided, the Claimant was invited to attend a disciplinary hearing in order to respond to the allegations. That there was nothing malicious on the part of JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 8 of 32

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the Respondent in inviting the Claimant to provide his perspective on the allegations. (e) that the Claimant’s voluntary resignation was in bad faith, and was [meant] to defeat the procedural disciplinary proceedings initiated by the Respondent. (f) that commencement of an internal disciplinary mechanism cannot amount to constructive dismissal. (g) that the Claimant had not made any deduction from his salary towards his pension, and that the DRAFT Respondent was not obligated to match the Claimant’s alleged contribution. That deductions were only made on the final salary payslip. (h) that the Claimant had not provided particulars of any alleged harassment, inequitable treatment, embarrassment or emotional distress alleged to have been suffered by him and his family; and that the Claimant resigned voluntarily on being invited to attend the disciplinary hearing. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 9 of 32 Respondent’s internal

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(i) that the only sum due to the Claimant was USD 20,795.28, held in a fixed deposit account and available for payment to the Claimant should the Court so decide. 6. By way of a Counter-claim, the Respondent sought the following reliefs against the Claimant:(a) A declaration that the Claimant had breached and contravened the express terms of his contract of employment dated 14th June, 2021. (b) A permanent order of injunction restraining the DRAFT Claimant from working for, or being engaged by Xenopia Health Care Solutions Limited or any competitor of the Respondent pursuant to a restriction contained in the employment contract dated 14th June, 2021. (c) A permanent order of injunction restraining the Claimant from communicating or disclosing to third parties, without the Respondent’s written consent, any confidential business, financial, technical, intellectual property e.t.c belonging to JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 10 of 32

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the Respondent, its shareholders, its parent companies subsidiaries, affiliates e.t.c 7. (d) General damages. (e) Costs of the suits. The Respondent pleaded in the Counter-Claim, inter-alia:(a) that the Claimant’s contract of employment 14 th June, 2021, vide which he was employed as the Respondent’s Chief Executive Officer (“CEO”) and Managing Director, had both express and implied terms, and that Claimant was not to act in a DRAFT manner that would jeopardize the Respondent’s relationships, customers, partners and stakeholders (paragraphs 29 30 and other of the Counter-claim). (b) that the Claimant resigned on 21 st February, 2023 with immediate effect, and that his subsequent activities showed that he intended to act in breach of Clause 7 of his contract (paragraphs 32 and 33 of the Counter-claim). JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 11 of 32

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8. Documents filed alongside the Respondent’s Response to Claim and Counter-claim included an affidavit in verification of the Counter-claim, a witness statement of Martha Osier and a list of documents dated 8 th November, 2023. listed documents Authority, the included the Respondent’s Respondent’s Housekeeping Chart The of Procedures, Martha Osier’s/the Respondent’s email dated 9th February, 2023, the Claimant’s resignation letter dated 21 st February, 2023, the Respondent’s Advocates’ letter dated 14 th July, 2023, email correspondence sent on 14 th February, 2023, and Xenopia Health Care Solution’s CR-12, among other DRAFT documents. 9. Trial opened before me on 20th November, 2024. The Claimant his adopted his filed witness statement as testimony and produced in evidence the documents referred to in paragraph 3 of this Judgment, save for the letters dated 26th April, 2023 and 5th May, 2023, which the Court struck off and expunged from its record at the instance of the Respondent. 10. The Claimant further testified, inter-alia:- JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 12 of 32

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(a) that he resigned from the Respondent company because he received a show cause letter and upon responding to the same, he received a letter from the Respondent disciplinary inviting him hearing/meeting, to attend with a new items/allegations which had not been stated in the show cause letter. (b) that some of the items that the Claimant had responded to had been removed from the list of accusations. (c) that upon resigning, the Claimant was instructed DRAFT to hand over and to exit the building after signing a handover document, this despite having given a six (6) months’ notice in line with his contract. (d) that the Respondent committed to pay USD 41,590.56 being the Claimant’s pension contribution. 11. Cross-examined, the Claimant testified:(a) that he submitted his resignation on 17th February, 2023, shortly after receiving the JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 13 of 32

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invitation letter to attend a disciplinary hearing. (b) that he felt frustrated at his work place. (c) that it is an employer’s prerogative to commence disciplinary proceedings against an employee pursuant to the law and policy. (d) that the Claimant felt that the Company had no basis to commence disciplinary proceedings against him; and that the process amounted to harassment, embarrassment and emotional distress. DRAFT (e) that under the Respondent’s HR Manual, the Company (Respondent) was supposed to issue a show cause letter informing an employee of any charges/offences. That the Claimant was issued with a show cause letter on 6th February, 2023 and responded to the same on 9th February, 2023. (f) that where response adequately answered to charges, the charges were supposed to be dropped; but where it did not, a disciplinary hearing was supposed to be convened. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 14 of 32

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(g) that in its letter (invitation) dated 17th February, 2023, the Respondent indicated that it had considered the Claimant’s response to the show cause letter, and had found it unsatisfactory. That one of the charges was, however, dropped, and a new one added. (h) that the new charge was that the Respondent alluded to the existence of a loan policy, when there was none. (i) that the Claimant was invited to attend a disciplinary hearing on 23rd February, 2023, DRAFT and was informed that the purpose of the hearing was to give him (the Claimant) an opportunity to make oral submissions on the charges made against him, and was free to be accompanied by [another] employee of his choice. (j) that the Claimant, however, resigned on 21st February, 2023. (k) that the resignation was not meant to scuttle the disciplinary hearing. That the employer could JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 15 of 32

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have rejected the resignation if they really wanted to hear the Claimant. (l) that under the Respondent’s HR Manual, the employer could, upon conducting a disciplinary hearing, issue a warning, suspension or dismissal; but the Claimant resigned before the hearing. (m) that the Respondent’s Finance Department was obligated to deduct pension contributions and that details of the Claimant’s pension contribution were shared with him at the end of employment. DRAFT 12. Re-examined, the Claimant testified that it was the employer’s prerogative to decide on whether or not the Claimant’s response to the show cause letter was satisfactory. 13. The Respondent sought to withdraw its Counter-claim on 29th September, 2025, and the same was marked as withdrawn with costs (at the lower scale), to be agreed or taxed, and to be paid after the event (on the Claimant’s suit herein). JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 16 of 32

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14. The Respondent called one witness, Martha Omoit Osier (RW-1), who adopted her filed witness statement and produced in evidence the documents referred to in paragraph 8 of this Judgment. 15. Cross-examined, RW-1 testified:(a) that the Claimant resigned on his own accord; and gave a six (6) months’ notice. That his contract had an option for the Respondent to pay him in lieu of notice, and that he was paid in lieu. (b) that the Respondent agreed to pay the Claimant DRAFT pension contribution as at 1 st March, 2023, which was Kshs.2,300,455.01. 16. Re-examined, RW-1 testified that the Claimant resigned to avoid disciplinary proceedings, though he stated in his resignation letter that he unbearable working conditions. was resigning due to That the Respondent deemed the Claimant’s resignation to have been voluntary and did not, therefore, reject the same. That the pension contribution that the Respondent agreed to pay the Claimant was inclusive of both the Claimant’s and the Respondent’s JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 17 of 32

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pension contributions. That the Respondent agreed to pay as of 1st March, 2023. 17. Having considered the pleadings filed by both parties and evidence adduced thereon, issues that fall for determination, in my view, are:(a) Whether the Claimant was constructively dismissed by the Respondent. (b) Whether the reliefs sought by the Claimant are deserved. 18. On the first issue, the Black’s Law Dictionary (10 th Edition) DRAFT defines constructive dismissal as follows:“An employer’s creation of working conditions that leave a particular employee or a group of employees little or no choice but to resign, as by fundamentally changing the working conditions or terms of employment; an employer’s course of action that, being detrimental to an employee, leaves the employee no option but to quit.” JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 18 of 32

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19. The Court of Appeal stated as follows in the case of Coca Cola East & Central Africa Ltd – vs – Maria Kagai Ligaga [2015] eKLR:“Constructive dismissal occurs where an employee terminates the contract under which he is employed, (with or without notice) in circumstances in which he is entitled to terminate it without notice, by reason of the employer’s conduct. The employer’s behaviour in either case must be shown to be heinous, so intolerable that it made it considerably difficult DRAFT for the employee to continue working. employee initiates the termination The believing himself to have been fired. The employee needs to show that the employer, without reasonable or proper cause, conducted himself in a manner likely to destroy or seriously employment relationship. regarded constructive as damage the Resignation is dismissal if the employer’s conduct is a significant breach of the contract of employment and the conduct shows that the employer is no longer interested in JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 19 of 32

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being bound by the terms of the contract. The employee’s resignation is therefore treated as an actual dismissal by the employer, and the employee may claim compensation for unfair termination.” 20. In the present case, the Claimant is shown to have been employed by the Respondent as its Chief Executive Officer (CEO) and Managing Director from 1st October, 2021 upto the date of his resignation on 21 st February, 2023, under a contract dated 14th June, 2021. According to the pleadings DRAFT filed by both parties and the evidence on record, the Claimant performed his duties under his contract, without any complain from himself or from the Respondent, until 6th February, 2023 when the Respondent served the Claimant with a show cause letter (dated 6th February, 2023) setting out charges/allegations against the Claimant relating to performance of his contractual duties. The said letter stated in part:“In the circumstances, the Organization hereby requires you to show cause why disciplinary action should not be taken against you. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 20 of 32 Your

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response should reach Mr. Alexis Caude on or before 9th February, 2023.” 21. The Claimant responded to the show cause letter fide his letter dated 9th February, 2023 (addressed to Alexis Caude) as instructed in the said letter. On 17 th February, 2023, however, the Respondent issued the Claimant with an invitation to attend a disciplinary hearing on 23 rd February, 2023. The letter stated in part:“We refer to the Company’s letter dated 6th February, 2023 and your response dated 9 th DRAFT February, 2023 but submitted on 13th February, 2023 following an extension granted to you . . . The company has considered your response and found it to be unsatisfactory for the following reasons . . .” 22. The Claimant was further informed vide the said letter of invitation to attend a disciplinary hearing:(a) that the purpose of the hearing would be to give him an opportunity to make oral representations JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 21 of 32

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on the allegations levelled against him for the Respondent’s (Company’s) consideration; and that the Company’s Advocate would be invited to take minutes of the meeting. (b) that the Claimant had a right to be accompanied to the disciplinary hearing by a work colleague, who would be entitled to make representation. (c) that the company would consider all the representations made by the Claimant and on his behalf. (d) that the company would advise the Claimant of DRAFT the outcome of the hearing in writing shortly after the hearing. 23. Before the afore-notified date of the disciplinary hearing, however, the Claimant resigned vide his letter of resignation dated 21st February, 2023. The Claimant stated in the said letter, inter-alia:“. . . After careful thought and soul searching, I have come to the decision to submit a six (6) months’ notice of resignation as the Group Chief Executive (“GCEO”) of Africa Bio Systems Limited JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 22 of 32

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(“the Company”) which I hereby do with a heavy heart. This notice is effective 21st February, 2023. My last day of working for the company shall be 20th July, 2023. I have come to this decision following the recent developments in the company which have been calculated at hounding me out of office. As you are aware, you levelled very malicious and false allegations against me vide you “Show Cause Letter” 6th of February, 2023. I DRAFT meticulously answered each allegation satisfactorily as follows . . .” 24. The foregoing scenario does not, in my view, demonstrate the creation by the employer (the Respondent) of working conditions that left the Claimant little or no choice but to resign. The Respondent is not shown to have fundamentally or in any way changed the Claimant’s working conditions or terms of employment, leaving him with no option but to quit employment. Issuance of a show cause letter by an employer to an employee requiring the employee to show JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 23 of 32

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cause why disciplinary action should not be taken against him or her for alleged misconduct or poor performance cannot be equated with creation of working conditions that leave an employee with little or no choice but to resign. In labour law, a show cause letter plays the role of a charge sheet. The charged employee must be given reasonable time to respond to the charges levelled against him or her, and to be heard on the same before any disciplinary action can be taken against him/her. 25. As I stated in the case of Okwoyo – vs – Bank of Africa DRAFT (Cause E072 of 2021) [2023] KEELRC [2023] KEELRC 108 (KLR) (20th April, 2023) (Judgment):“18. A charge memorandum sheet of in labour charges laws is a (acts and omissions) alleged to have been committed by the employee, and consists of allegations and facts which the person issuing it wishes to establish against the employee. A formal charge sheet (formal accusation of alleged misconduct, negligent acts or omissions) in labour laws seeks to fulfil one of the basic JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 24 of 32

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principles of natural justice that a fair and reasonable opportunity of being heard must be given to a person alleged to have misconducted himself or committed a breach of the law or set regulations. This principle cannot be achieved unless the person is specifically told of the accusations levelled against him. The person must know about his alleged guilt for him to state his views in response thereto. DRAFT 19. A fair hearing pre-supposes a precise and definite catalogue of charges so that the person charged may understand and effectively meet it . . .” 26. Issuance of a show cause letter (formal catalogue of charges) by an employer to an employee and requiring him to respond to alleged misconduct is a fulfilment of a basic principle of natural justice. In the present case, the Claimant was served with formal charges levelled against him by his employer in form of a show cause letter dated 6th JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 25 of 32

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February, 2023, to which he formally responded vide his letter of response dated 9th February, 2023. 27. According to the evidence on record, the employer (the Respondent) found the Claimant’s response to the charges against him unsatisfactory, and vide a letter dated 17th February, 2023 invited him for a disciplinary hearing on 23rd February, representations. 2023, where he would make oral He was informed of his right to be accompanied by a fellow employee of his choice (a witness), who would also make representations. This was in conformity with the mandatory procedure set out in Section DRAFT 41 of the Employment Act. 28. The Claimant resigned before the set hearing date, vide a letter of resignation dated 21st February, 2023, referring to the initiated disciplinary process as harassment, an embarrassment and emotional distress of him by the Respondent. 29. I am unable to find the ingredients of a constructive dismissal in the present case. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 26 of 32 The Claimant did not

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demonstrate the existence of working conditions that left him with no option but to resign. He did not demonstrate that the employer had conducted itself in a manner likely to destroy or to seriously damage the employment relationship; or that the employer was no longer interested in being bound by the terms of the contract. 30. The disciplinary process was commenced on 6th February, 2023; and the Claimant participated in it by submitting to the employer a detailed letter dated 9th February, 2023 in response to the charges levelled against him. He however DRAFT resigned before the date set for disciplinary hearing. Why did he resign? Why did he not wait for the disciplinary hearing and defend himself against the charges levelled against him, and possibly seek legal redress thereafter if there was unfairness in the disciplinary process or if an unfair decision was arrived at by the employer on the basis of invalid reasons? 31. Waiting for commencement of disciplinary proceedings and partly participating in them before resigning removes JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 27 of 32

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the legal sting from any accrued right to resign and to plead constructive dismissal. 32. I find and hold that the Claimant was not constructively dismissed by the Respondent, but resigned voluntarily vide his resignation letter dated 21st February, 2023, vide which he gave a six months’ notice as per his contract. 33. The Claimant’s employment contract provided:“6.1. The company may agreement by providing terminate six (6) this months written notice to the Employee or payment DRAFT in lieu thereof. 6.2. The Employee may terminate this agreement by providing six months written notice to the company (without incurring any penalty of whatever nature)”. 34. The Claimant acted within his contract by terminating the contract by way of resignation; and the Respondent acted within the same contract by accepting the resignation and JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 28 of 32

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paying the Claimant in lieu of the contractual notice rather than letting him serve the notice period. 35. On the 2nd issue, and in view of the Respondent’s admission of the Claimant’s claim for USD 41,590.56 both in its pleadings and in evidence, I award the Claimant the said sum, being pension contribution payable to him upon termination of employment. 36. The claim for USD 249,996 being compensation for constructive termination (dismissal) is declined, as the Claimant did not demonstrate that he was constructively DRAFT dismissed. 37. The claim for USD 1,488.10 being underpayment on leave days was not proved, and is declined. The claim, being of the nature of special damages, ought to have been specifically pleaded and strictly proved. The Claimant did not demonstrate how the alleged underpayment arose. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 29 of 32

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38. The claim for USD 900,680 being payment for the remainder of the contract term is declined, as it is not one of the reliefs provided for in Section 49(1) of the Employment Act. 39. The claim for general damages is declined. The Respondent was not shown to have breached the Claimant’s contract of employment. 40. In sum, and having considered written submissions filed on behalf of both parties, Judgment is hereby entered for the Claimant against the Respondent for USD 41,590.56. DRAFT 41. The awarded sum, being pension contributions, shall not be subjected to statutory deductions pursuant to Section 49(2) of the Employment Act. 42. The Claimant is awarded interest on the awarded sum at Court rates, to be calculated from the date of filing suit until payment in full. 43. The Claimant is awarded costs of the suit, to be taxed on the higher scale. JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 30 of 32

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44. The Claimant was on 29th September, 2025 awarded costs of the withdrawn counter-claim, which the Court ordered be agreed or be taxed at the lower scale. That shall remain the position. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER 2026 AGNES KITIKU NZEI JUDGE DRAFT ORDER This Judgment has been delivered via Microsoft Teams Online Platform. A signed copy will be availed to each party upon payment of the applicable Court fees. AGNES KITIKU NZEI JUDGE Appearance: Miss Kagia for the Claimant JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 31 of 32

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Miss Gathimba for the Respondent DRAFT JUDGMENT Nairobi ELRC Cause No. E739 of 2023Page 32 of 32

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