https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1318

Society v Leaburia (Employment and Labour Relations Appeal E044 of 2025) [2026] KEELRC 1318 (KLR) (15 May 2026) (Judgment) Neutral citation: [2026] KEELRC 1318 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nyeri Employment and Labour Relations Appeal E044 of 2025 SC Rutto, J May 15, 2026 Between Dumisha Sacco Society Appellant and Isaac Leaburia Respondent (Being an Appeal from the Judgment of the Hon. T.A Sitati, in Maralal MCELRC Cause No. E002 of 2023, delivered on 24th July 2025) Judgment 1.The Respondent commenced proceedings before the Magistrate’s Court at Maralal vide a Memorandum of Claim filed in MCELRC Cause No. E002 of 2023, Isaac Leaburia v Dumisha Sacco Society. In the Claim, the Respondent pleaded that he was employed by the Appellant on 30th August 2018 as an Internal Auditor at a gross monthly salary of Kshs 47,800.00. He further averred that owing to his diligence, exemplary performance, and hard work, he was subsequently promoted to the position of Acting Chief Executive Officer, with his salary being enhanced to Kshs 78,596.00 per month. 2.The Respondent further averred that the Appellant later advertised the position of Chief Executive Officer, for which he applied, was shortlisted, and subsequently interviewed. 3.According to the Respondent, he emerged successful in the interview process and, by a letter dated 23rd September 2019, his appointment as the Appellant’s Chief Executive Officer was communicated to the Sacco Societies Regulatory Authority. He further stated that on 24th September 2019, he was formally issued with a letter appointing him as the Chief Executive Officer of the Appellant. 4.The Respondent contended that despite serving as the Appellant’s Chief Executive Officer for a period exceeding 8 months, he was never furnished with a salary structure for the position and continued earning a monthly salary of Kshs 78,596.00. 5.The Respondent further averred that sometime in June 2020, the Appellant placed him on compulsory unpaid leave from 31st July 2020 to 1st September 2020 and directed him to revert to his former position. 6.The Respondent stated that upon resuming duty on 1st September 2020, he discovered that his salary had been reduced to Kshs 47,800.00. Aggrieved by the reduction, he instructed his advocates to issue a demand letter to the Appellant. According to the Respondent, the Appellant undertook to address the salary reduction and/or deliberate on the issue during the next Board meeting, on condition that he withdraws the demand letter, which he did. 7.The Respondent further averred that whenever he followed up on the matter, the Appellant offered varying explanations, including postponement of Board meetings and lack of quorum. He contended that for a period of 14 months, he suffered a salary reduction of Kshs 30,796.00, resulting in an alleged salary deficit of Kshs 431,144.00. 8.It was the Respondent’s case that he was neither consulted nor did he consent to the salary reduction. He further contended that the reduction was not provided for in his contract of employment and was unilaterally effected by the Appellant, thereby constituting a breach of his employment contract, the Employment Act, and the Constitution. 9.The Respondent further stated that on 16th April 2021, he sought intervention from the County Cooperative Office in Samburu, but no action was taken. Consequently, he averred that he was unable to continue working for the Appellant from November 2021. 10.The Respondent maintained that the Appellant’s actions amounted to constructive termination of his employment contract. Consequently, he sought the sum of Kshs 1,860,281.00 comprising compensation for unfair termination, one (1) month’s salary in lieu of notice, unpaid salary during the period of compulsory leave, salary underpayments, accrued leave pay for 3.5 years, and service pay. He further prayed for costs and interest. 11.In response to the Claim, the Appellant filed a Statement of Defence dated 16th August 2023 in which it admitted employing the Respondent initially as an Internal Auditor and later as Acting Chief Executive Officer. 12.While admitting that the Respondent had been appointed as Chief Executive Officer, the Appellant contended that the appointment was subject to an initial probationary period of 6 months, upon the expiry of which confirmation was subject to satisfactory performance. The Appellant further averred that the probationary period was extended by an additional 3 months to allow the Respondent an opportunity to improve his performance. 13.According to the Appellant, the Respondent failed to discharge his duties competently and satisfactorily, thereby leading to his non-confirmation as Chief Executive Officer. 14.The Appellant further contended that the Respondent unlawfully and irregularly increased his own salary and absented himself from work without notice, circumstances which led to his placement on compulsory leave in June 2020. 15.The Appellant further averred that the Respondent was subsequently issued with a warning letter dated 25th September 2022, to which he responded by admitting his unprofessional conduct. 16.It was the Appellant’s case that the Respondent was neither confirmed as Chief Executive Officer nor terminated from employment, but instead voluntarily resigned on 25th October 2021. 17.The Appellant further filed a Notice of Preliminary Objection dated 16th August 2023 on the ground that the Respondent’s suit was statute-barred under Section 90 (now Section 89) of the Employment Act. 18.In a Ruling delivered on 23rd January 2024, the learned trial magistrate dismissed the Appellant’s Preliminary Objection, having found that the Respondent remained in employment until 20th October 2021 and tendered his resignation on 21st October 2021. The trial Court consequently held that the suit, having been filed in July 2023, was instituted within the limitation period prescribed under Section 89 of the Employment Act. 19.The matter thereafter proceeded to full hearing, during which the Respondent testified in support of his case while the Appellant called oral evidence through its Chairman, Joseph Sawe Koech. The witnesses were subjected to cross-examination, after which the parties filed written submissions. 20.Upon considering the pleadings, evidence, and submissions on record, the learned trial Magistrate delivered judgment on 23rd July 2025. In the judgment, the trial Court found that the Respondent had not been unfairly terminated, but had instead resigned in order to pre-empt an impending disciplinary process arising from his underperformance while serving as Acting Chief Executive Officer. The Court further held that the Appellant acted fairly in reverting the Respondent to his substantive position as Internal Auditor, in which he had previously excelled, rather than dismissing him on account of his shortcomings in the acting role. 21.In the final analysis, the trial Court dismissed the Respondent’s claims for compensation for unfair termination and pay in lieu of notice. However, the Court awarded the Respondent unpaid salary for the period he was on compulsory leave, salary arrears for the 14-month period between 1st July 2019 and 1st September 2021, as well as service pay for 3.5 years together with costs of the suit and interest. The Appeal 22.Being dissatisfied with the Judgment of the trial Court, the Appellant preferred the instant Appeal, setting out the following 6 grounds in support thereof:1.The learned magistrate erred law when he held that part of the Claim is time barred under section 90 of the Employment Act while indeed the entire claim is time barred under section 90 of the Employment Act.2.The learned magistrate erred in law and fact by holding that the Respondent is entitled to unpaid salary while the Respondent admitted during the trial that he received full payment from the Appellant during his tenure as acting CEO and his probation period. Indeed, in the Respondent's letter dated 16th April 2021, the Respondent indicated that he has been earning Kshs. 81,000/=.3.The learned magistrate erred in law and fact by dismissing the prayer for declaration that the unilateral reduction of the claimant's salary by the respondent was illegal and unjustified therefore null and void while at the same time awarding a purported unpaid salary which was admitted having been fully received during the trial.4.The learned magistrate erred in law and fact by holding that the Appellant pays the Respondent a purported unpaid salary without any evidence being produced to support the allegation that the said salary was not paid. Indeed, during the trial, the Respondent admitted having been paid full CEO salary during his tenure as acting CEO and his probation period.5.The learned magistrate erred in law and fact by allowing the prayer for service pay while the Respondent admitted at the trial that the Respondent has paid statutory deductions. Indeed, the Respondent was faulted by the Appellant for failing to submit statutory deductions.6.The learned magistrate erred in law and facts fact by failing to wholly consider, analyze and evaluate the Appellant's and the Respondent's entire body of material evidence presented before the Court arriving at an erroneous conclusion. 23.To this end, the Appellant seeks the following orders from this Court:a.This appeal be allowed by reversing and setting aside the Judgment of Magistrate Court at Maralal (Hon. T.A. Sitati) delivered on 24th July 2025 at Maralal in MCELRC No. E002 of 2023).b.That the costs of the appeal be awarded to the appellant. The Submissions 24.The Appeal was canvassed by way of written submissions. Only the Appellant filed submissions, which this Court has duly considered. The Appellant submitted that the trial Court erred in law in failing to find that the entire claim was statute-barred under both limbs of Section 90 of the Employment Act. 25.The Appellant further submitted that the impugned action was undertaken in June 2020 and that the statutory limitation period of 3 years lapsed in June 2023. According to the Appellant, the suit before the trial Court was instituted on 21st July 2023, approximately one month outside the statutory period. In support of this position, reliance was placed on the decision in G4S Security Services (K) Limited v Joseph Kamau & 468 others (Civil Appeal 158 of 2015) [2018] KECA 827 (KLR) (Civ) (16 February 2018) (Judgment). 26.The Appellant further submitted that the Respondent took no action against the Appellant regarding the alleged failure to confirm him as Chief Executive Officer and instead reverted to and continued serving in his previous position as Internal Auditor until his resignation. In the Appellant’s view, the actions complained of amounted to continuing injury, for which the limitation period of 12 months lapsed upon cessation of employment on 25th October 2021, when the Respondent resigned. The Appellant contended that by the time the suit was filed on 21st July 2023, the 12-month limitation period had already expired. It was further submitted that the trial Court failed and/or neglected to determine this issue, notwithstanding the extensive submissions placed before it. To buttress its submissions, the Appellant relied on the decisions in John Kiiru Njiiri v University of Nairobi (Cause 696 of 2019) [2021] KEELRC 41 (KLR) (Employment and Labour) (11 November 2021) (Ruling) and German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA 894 (KLR) (24 July 2023) (Judgment). 27.The Appellant further submitted that the proceedings before the trial Court were incomplete and/or failed to accurately capture the Respondent’s responses during cross-examination by its (Appellant) counsel. In particular, the Appellant contended that the Respondent unequivocally admitted, during the hearing, that he had been earning a salary of Kshs 81,000.00 while serving both as Acting Chief Executive Officer and as the substantive Chief Executive Officer, as opposed to Kshs 78,596.00 as alleged in his pleadings. 28.The Appellant further submitted that whereas the Respondent specifically pleaded and prayed for a salary of Kshs 78,596.00, the trial Court nevertheless proceeded to multiply the figure by 3, despite the same neither having been pleaded nor prayed for in the Claim. According to the Appellant, the said figure was never subjected to evidentiary scrutiny as it was not part of the pleadings, and consequently, the trial Court erred in granting a relief that was both unpleaded and unproven. 29.It was further submitted by the Appellant that the alleged salary deficit of Kshs 431,144.00 for the 14-month period had, in fact, been admitted by the Respondent as having been received, both in his letter dated 16th April 2021 and during oral testimony in cross-examination. The Appellant contended that despite this admission, the trial Court failed and/or neglected to accord due consideration to this material evidence. Analysis and Determination 30.Being a first appeal, this Court is under a duty to reconsider, re-evaluate, and analyse the evidence adduced before the trial Court together with the impugned Judgment, and thereafter arrive at its own independent conclusions. This principle was reaffirmed in the case of Abok James Odera t/a A.J. Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] eKLR, where the Court held as follows: -“This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and reanalyze the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way.” 31.Upon considering the entire Record of Appeal, the submissions advanced by the Appellant, and the applicable law, the Court distils the following issues for determination: -a.Whether the trial Court erred in failing to find that the Respondent’s claim was statute-barred;b.Whether the remedies awarded by the trial Court lie in law. Whether the trial Court erred in failing to find that the entire claim was statute-barred 32.The Appellant has taken issue with the finding of the learned trial magistrate that only part of the claim was statute-barred, contending instead that the entire claim was caught up by limitation. 33.In the Ruling delivered on 23rd January 2024, the trial Court held that the suit had been instituted within the limitation period prescribed under Section 89 of the Employment Act. 34.Section 89 of the Employment Act provides for the limitation period applicable to employment-related claims, including claims founded on continuing injury, in the following terms: -“Notwithstanding the provisions of section 4(1) of the Limitation of Actions Act (Cap. 22), no civil action or proceedings based or arising out of this Act or a contract of service in general shall lie or be instituted unless it is commenced within three years next after the act, neglect or default complained of, or in the case of a continuing injury or damage, within twelve months next after the cessation thereof.” 35.In essence, a claim founded on a contract of service, such as the present one, is statute-barred upon the expiry of 3 years from the date the cause of action accrued, and in cases involving a continuing injury, upon the lapse of 12 months from the date the injury ceased. 36.A cause of action denotes a set of facts or circumstances that entitle a party to seek a remedy from the Court against another party. In addressing this issue, the Court of Appeal in Attorney General & another v Andrew Maina Githinji [2016] eKLR expressed itself as follows: -“The respondents had a clear cause of action against the employer when they received their letters of dismissal on 2nd October, 2010. They had all the facts which had been placed before them in the disciplinary proceedings and they could have filed legal proceedings if they felt aggrieved by that dismissal, but they did not...having found that the cause of action arose on 2nd February, 2010 and that the claim was filed on 16th June, 2014 it follows by simple arithmetic that the limitation period of 3 years was surpassed by a long margin. The claim was barred as at 1st February, 2013, and I so hold.” 37.In the present case, the Appellant contends that the cause of action accrued in June 2020, when the Respondent was placed on compulsory leave, and that the limitation period consequently lapsed in June 2023. On that basis, the Appellant maintains that the Respondent’s suit was instituted outside the prescribed 3-year limitation period. 38.Applying the first limb of Section 89 of the Employment Act to the circumstances of this case, it is apparent that the Respondent’s grievance relating to the alleged constructive termination accrued at the point when the employment relationship effectively came to an end. 39.In this regard, the record shows that the Respondent tendered his resignation through a letter dated 25th October 2021, with the resignation taking effect on 20th November 2021. 40.It therefore follows that the cause of action in respect of the Respondent’s claim for constructive termination accrued on the effective date of resignation. This is because, notwithstanding his redeployment to the position of Internal Auditor, the Respondent continued serving the Appellant until he voluntarily resigned from employment. 41.Consequently, the Respondent’s claim for constructive termination cannot be said to have been statute-barred when the suit was filed on 21st July 2023. To this extent, the finding of the learned trial magistrate cannot be faulted. 42.With regard to the second limb of Section 89 of the Employment Act, the Appellant contends that the Respondent’s redeployment to his previous position of Internal Auditor with effect from 1st September 2020, together with the attendant salary reduction, constituted a continuing injury, which only ceased upon his resignation from employment on 25th October 2021. 43.The record bears that before the trial Court, the Respondent complained that upon resuming duty after compulsory leave on 1st September 2020, he discovered that his salary had been reduced to Kshs 47,800.00, being the salary previously attached to his substantive position as Internal Auditor. It was on that basis that he sought the sum of Kshs 431,144.00 being alleged salary underpayments for a period of 14 months. 44.A review of Section 89 of the Employment Act reveals that claims founded on a continuing injury must be instituted within 12 months from the date the injury ceases, namely when the alleged breach or wrongful conduct comes to an end. 45.Accordingly, any action premised on a continuing injury is only sustainable if filed within 12 months from the date of cessation of the alleged injury or breach. 46.In the case of G4S Security Services (K) Limited v Joseph Kamau & 468 others [2018] eKLR, the Court of Appeal considered the import of Section 89 in relation to continuing injuries and stated as follows: -“Regarding a ‘continuing injury’, the proviso to Section 90 of the Employment Act requires that the claim be made within twelve months next after the cessation thereof. Further, upon the claimant’s dismissal, any claim based on a continuing injury ought to have been filed within one year, failing which it became time-barred.” 47.In view of the foregoing, it is necessary to determine what amounts to a continuing injury and whether the Respondent’s claim relating to the alleged salary underpayment falls within that category. 48.According to Black’s Law Dictionary (10th Edition, p. 906), a continuing injury is defined as: “An injury that is still in the process of being committed.” 49.In considering the concept of a continuing injury, the Court of Appeal in The German School Society & another v Ohany & another [2023] KECA 894 (KLR) stated as follows:“The principles underlying continuing wrongs and recurring/successive wrongs have been applied in employment disputes. A ‘continuing wrong’ refers to a single wrongful act that results in a continuing injury, while ‘recurring or successive wrongs’ are those that occur periodically, with each instance giving rise to a distinct and separate cause of action.” 50.The Learned Judges of Appeal further referenced the decision of the Supreme Court of India in Balakrishna S.P. Waghmare v Shree Dhyaneshwar Maharaj Sansthan AIR 1959 SC 798, where the concept was explained thus:“It is the very essence of a continuing wrong that it creates a continuing source of injury and renders the wrongdoer responsible and liable for the continuance of the said injury. If the wrongful act causes an injury that is complete, there is no continuing wrong, even though the resulting damage may persist. However, if the wrongful act is such that the injury itself continues, then it constitutes a continuing wrong.” 51.In addition, the Court relied on the case of M. Siddiq v Suresh Das (2020) 1 SCC, where the Indian Supreme Court held that:“A continuing wrong arises where there exists a legal, contractual, or other obligation to act or refrain from acting in a certain manner. The breach of such an obligation extends beyond a single act or omission, giving rise to a legal injury of a continuing nature.” 52.What can be drawn from the foregoing precedents is that a continuing injury refers to a wrong that is not limited to a single or isolated act, but rather one that persists and recurs over a period of time. 53.Applying the said precedents to the present case, it is evident that for as long as the Respondent remained in the Appellant’s employment, a fresh cause of action arose each month that he allegedly received a salary lower than what he considered he was entitled to. 54.In the premises, the Court is satisfied that the Respondent’s complaint relating to salary underpayment constituted a continuing injury which persisted until the cessation of his employment. 55.Given that the Respondent’s resignation took effect on 20th November 2021, his employment relationship with the Appellant came to an end on that date. Consequently, pursuant to Section 89 of the Employment Act, any claim founded on the alleged continuing injury ought to have been instituted on or before 20th November 2022. 56.However, the record bears that the Respondent filed his suit before the trial Court on 21st July 2023, well after the lapse of the limitation period prescribed for claims arising from continuing injuries. It therefore follows that the Respondent’s claim for salary underpayment for 14 months was statute-barred at the time of filing. 57.Accordingly, the Court finds that the Respondent’s claim for alleged underpaid salary for the 14-month period was unsustainable in law, having been instituted outside the limitation period set out under Section 89 of the Employment Act. Remedies? 58.Having found that the Respondent’s claim for salary underpayment for 14 months was instituted outside the prescribed limitation period, it follows that the award of Kshs 431,144.00 made by the trial Court on that account cannot stand. 59.The trial Court further awarded the Respondent the sum of Kshs 235,788.00 as unpaid salary during the period he was on compulsory leave. 60.From the record, it is evident that the Respondent was placed on compulsory leave from 31st July 2020 to 1st September 2020. In effect, the period of compulsory leave covered only one month, specifically August 2020, since the Respondent resumed duty on 1st September 2020. 61.In the circumstances, it is unclear why the trial Court proceeded to award the Respondent the equivalent of 3 months’ salary amounting to Kshs 235,788.00. 62.What’s more, the record reveals that the Respondent pleaded that upon resuming work after the compulsory leave on 1st September 2020, he discovered at the end of that month that his salary had been reduced to Kshs 47,800.00. This confirms that the alleged salary reduction only took effect after the expiry of the compulsory leave period and after the Respondent had already been redeployed to his erstwhile position as Internal Auditor. 63.Accordingly, there is no indication from the Respondent’s pleadings that during the period of compulsory leave, he was denied the salary he had been earning while serving as Chief Executive Officer. 64.In the premises, the award made by the trial Court in respect of unpaid salary during the compulsory leave period cannot be sustained. 65.The trial Court further awarded the Respondent Kshs 71,700.00 being service pay for a period of 3.5 years. 66.In its submissions, the Appellant contended that during cross-examination, the Respondent admitted that some of the remittances referred to in the letter dated 16th April 2020 related to the National Social Security Fund (NSSF) and the National Hospital Insurance Fund (NHIF) contributions, and that the Appellant regularly remitted statutory deductions to both NSSF and NHIF on behalf of all its employees, including the Respondent. 67.However, the record does not contain evidence demonstrating actual remittances to the NSSF or to any provident fund in respect of the Respondent. 68.Granted, the Appellant alleged that the Respondent had stolen some of its documents, including payroll records, thereby hampering its ability to produce the relevant documentation before the trial Court to prove that the Respondent was a registered member of the NSSF and a contributor to a provident fund. 69.Be that as it may, it remains unclear why the Appellant did not obtain and produce records directly from the NSSF or from the alleged provident fund to substantiate its assertion. This is particularly so given that under Section 74(1) of the Employment Act, the employer bears the statutory obligation of maintaining employment records. 70.In the final analysis, this Court finds no basis upon which to interfere with the learned trial magistrate’s award regarding service pay, there being no evidence demonstrating that the Respondent fell within the exclusions contemplated under Section 35(6) of the Employment Act. Orders 71.In the final analysis, the Court allows the Appeal in part and makes the following orders: -a.The award of Kshs 235,788.00 being unpaid salary for the period the Respondent was on compulsory leave is hereby set aside.b.The award of Kshs 432,144.00 being alleged underpaid salary for fourteen (14) months from 12th July 2019 to 1st September 2020 is hereby set aside.c.The award of Kshs 71,700.00 being service pay for the Respondent’s 3.5 years of service is hereby upheld.d.Interest on the amount in (c) shall accrue at court rates from the date of this Judgment until payment in full. 72.Top of Form 73.Bottom of Form 74.As the Appeal has only succeeded partially, costs in this Court and at the trial Court shall be borne by the Appellant and shall be pegged on the final award. DATED, SIGNED and DELIVERED at NYERI this 15th day of May 2026.………………………………STELLA RUTTOJUDGEIn the presence of:For the Appellant Mr. LesikitoFor the Respondent Mr. KiriakoCourt Assistant NdatiORDERIn view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court had been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.………………………………STELLA RUTTOJUDGE