Kiogora v Ndarawetta Tea Factory Ltd (Cause E006 of 2025) [2026] KEELC 4747 (KLR) (23 July 2026) (Judgment)

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT KERICHO ELRC CAUSE NO. E006 OF 2025 (Before Hon. Lady Justice Anna Ngibuini Mwaure) NICHOLAS GITONGA KIOGORA.……………...…...… CLAIMANT VERSUS NDARAWETTA TEA FACTORY LTD……..….. ……..RESPONDENT JUDGMENT Introduction 1. The Claimant filed a Statement of Claim dated 30th January 2025 seeking the following orders that: 1.The court do find the acts by the Respondent to slash the Claimant’s salary by half and the introduction of other alien deduction un- procedural, and unlawful and amounted to constructive dismissal and that the Claimant be restituted to his original position with full salary. 2.The court do find that the Respondent’s action of continued withholding and failing, refusal and or neglecting to pay the Claimant his rightful dues despite the demand letter as unlawful and untenable. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 1 OF 19 3.As a result, the court do order the Respondent do pay the Claimant his unpaid dues as hereunder: i. Full dues as computed by the Respondent’s HR amounting to Kshs.2,881,877/=. ii. iii. Damages for constructive dismissal Interest on 1 and 2 above iv. Costs of this suit v. Any other relief that this Honourable court may deem just and fit to grant. Claimant’s case 2. The Claimant avers that he was employed by the Respondent as Finance Manager from July 2018 on permanent and pensionable terms, later earning Kshs.350,000/= per month by May 2022. 3. The Claimant avers that in June 2024 the Respondent abruptly slashed his salary by half to Kshs.175,000/= and introduced further deductions without due procedure, leaving him financially strained. 4. Despite letters dated 23rd July 2024 and 6th August 2024 requesting reinstatement and payment of benefits, the Respondent allegedly ignored his pleas, prompting his resignation on 12th August 2024. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 2 OF 19 5. At resignation, he claims 94 pending leave days and contends that his final dues of Kshs.219,659/=, excluding his last salary, were unlawfully reduced, with a clause barring him from suing. He argues the salary cut and deductions amounted to constructive dismissal despite his clean record of service. Respondent’s response to the Statement of Claim 6. The Respondent opposed the statement of claim vide a response to the statement of claim dated 2nd April 2025. 7. The Respondent strongly denies the Claimant’s allegations of constructive dismissal and insists that he voluntarily resigned. 8. The Respondent emphasizes that from mid-2023 the tea industry was in severe financial crisis due to drought and competition from Tanzania, forcing all factories to adopt drastic cost-cutting measures. A management meeting on 13th June 2024, attended by the Claimant, unanimously resolved to implement a 50% pay cut for all management staff, cancel incentives, stop overtime and non-essential expenses, and suspend local sales. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 3 OF 19 9. The Respondent underscores that the Claimant did not object to these resolutions and later resigned without citing dissatisfaction, making his resignation voluntary. 10. The Respondent further stress that upon resignation, the Claimant was duly paid Kshs.215,983.87/=, covering salary for days worked, pending leave days, and service pay, and therefore his claims of unpaid dues or unlawful deductions are baseless. 11. The Respondent argues that the Claimant is attempting to reframe a voluntary resignation into constructive dismissal, while in reality the pay cut was a necessary, industry-wide measure to safeguard jobs for over 50 employees. The Respondent urges the court to dismiss the claim with costs. Claimant’s evidence in court 12.CW1, the Claimant, adopted his written statement dated 30th January 2025, together with his bundle of documents dated even date, marked as exhibits 1 to 10 as his evidence in chief. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 4 OF 19 13.CW1 testified that he was employed on 20th July 2018 and resigned on 12th August 2024, with his last working day being 1st September 2024. He stated that during a management meeting on 30th June 2024, he was abruptly informed that his salary would be halved, and although presented with a consent letter, he refused to sign it. He received half his salary in June 2024, lost benefits such as the company vehicle, and despite written requests to the Managing Director, his salary was not reinstated, prompting his resignation. 14. In cross-examination, CW1 admitted signing the meeting minutes but insisted the meeting did not deliberate salary deductions. His resignation letter did not mention the pay cut, and he acknowledged receiving some dues while his advocates pursued the balance. He confirmed NSSF contributions were remitted, there was no contractual provision for service pay or gratuity, and he lacked evidence of gratuity payments to other managers. He stated he took 43 leave days out of 137.25 accrued, with leave days carried forward annually. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 5 OF 19 15.In re-examination, CW1 clarified that signing the minutes did not amount to consent for salary reduction and reiterated his refusal to sign the Respondent’s consent letter of 21st June 2024. He confirmed handing over to the Managing Director and noted that his final dues were calculated by the former HR, though he did not produce supporting records Respondent’s evidence in court 16. RW1, Bhavesh Patel, the Respondent’s CEO, adopted his witness statement dated 29th October 2025 together with the bundle of documents dated even date marked as exhibits 1 to 13 as his evidence in chief. 17.He further testified that a meeting was held on 13th June 2024 to discuss strategic issues, though no agenda was circulated to staff. The chairman, RW1 himself, and the Managing Director were present. He stated that CW1 did not raise any objection to the proposals, and the minutes were prepared by CW1. RW1 maintained that CW1 had no pending leave days, but for purposes of settlement, the company paid him 35.5 days. He emphasized that there was no KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 6 OF 19 documentary evidence supporting CW1’s claim of additional leave days. He also stated that service pay was reflected, and regarding vehicle benefits, there was no supporting documentation, although CW1 had been issued with a company vehicle. 18. Parties canvassed the claim by way of written submissions. Claimant’s written submissions 19. The Claimant submitted that the Respondent unlawfully reduced his salary from Kshs.350,000/= to Kshs.175,000/= without consultation or written consent, in violation of section 10(5) of the Employment Act, which requires employers to consult employees and notify them in writing before varying contractual terms. The Claimant relied on China Civil Engineering Construction Corporation (Kenya) Limited v Lewa [2023] KEELRC 1926 (KLR), Godfrey Odipo Tom v Tabasamu Sacco Limited [2022] KEELRC 768 (KLR), and Bakery Confectionery Food Manufacturing and Allied Workers Union (K) v Kenafric Industries Limited [2021] KEELRC 158 (KLR), which affirm that KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 7 OF 19 unilateral changes to employment contracts are unlawful. The Claimant further relied on Kamau v Copycat Ltd [2025] KEELRC 2330, where salary deductions without employee’s consent were held invalid. 20.On constructive dismissal, the Claimant placed reference on Henry Ochido v NGO Co-ordination Board [2015] KEELRC 150 (KLR), Nathan Ogada Atiagaga v David Engineering Limited [2015] KEELRC 75 (KLR), Miyawa & 7 Others v Judicial Service Commission [2017] KEELRC 1735 (KLR), Korir v Mediheal Group of Hospitals [2025] KEELRC 2738 (KLR), and Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394 (KLR), all of which establish that intolerable working conditions or fundamental breaches of contract such as unlawful salary reduction amount to constructive dismissal. 21. The Claimant also claims entitlement to outstanding leave days and gratuity, citing company practice of paying gratuity to senior management, and rejects attempts by the Respondent to bar him from legal recourse. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 8 OF 19 22. Finally, the Claimant invoked section 27 of the Civil Procedure Act and Kenya Power & Lighting Company Limited v Esther Wanjiru Wokabi [2014] KEHC 3174 (KLR) to argue that costs should follow the event, and therefore the Respondent should bear the costs of the suit. Respondent’s written submissions 23.The Respondent submitted that the Claimant was not constructively dismissed but voluntarily resigned, having actively participated in management meetings where the 50% salary reduction was agreed upon due to industry-wide financial challenges in the tea sector. The Respondent relied on section 10(5) of the Employment Act, arguing that consultation, not consent, is required, citing Emmanuel Wambua Muthusi & 6 Others v Khoja Shia Ithna Ashari Education Board t/a Jaffery Academy [2020] KEELRC 574 (KLR) in support of that proposition. They distinguish the Claimant’s reliance on China Civil Engineering Construction Corporation v Lewa (supra) and Kamau v Copycat Ltd(supra), noting those cases involved redundancy and lack of consultation. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 9 OF 19 24. On constructive dismissal, the Claimant invoked Coca Cola East & Central Africa Ltd v Maria Kagai Ligaga(supra), emphasizing that resignation must be directly linked to a fundamental breach, which the Claimant’s neutral resignation letter did not show. The Respondent further argued that Miyawa & 7 others v Judicial Service Commission(supra) is inapplicable because that case involved unilateral variation without consultation, whereas here the Claimant attended and signed minutes of the meeting adopting the pay cut. Similarly, the Respondent cited Korir v Mediheal Group of Hospitals (supra), where the court held that constructive dismissal requires resignation expressly citing breach, which the Claimant failed to do. 25.On dues, the Respondent challenges the authenticity of the Claimant’s tabulation, relying instead on official HR records. The Respondent deny service pay under section 35(6) of the Employment Act, citing Martin Ireri Ndwiga v Olerai Management Company [2017] KEELRC 424 (KLR) and Kennedy Nyanguncha Omanga v Bob Morgan Services Limited [2013] KEELRC 810 (KLR). The KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 10 OF 19 Respondent reject gratuity claims, citing Pathfinder International Kenya Ltd v Stephen Ndegwa Mwangi [2019] KECA 759, which held that gratuity must be expressly provided in the contract or CBA. The Respondent also rely on Pride Kings Security Service v Araka [2026] KEELRC 296 (KLR) to argue leave claims must be strictly proved, and 748 Air Services Limited v Theuri Munyi [2017] KECA 419 (KLR) to bar recovery of deducted salary due to estoppel. 26.The Respondent urges the court to dismiss the claim and award costs in their favour. Analysis and determination 27. The court has considered the pleadings herein and the submissions by both parties; the issues for determination are as follows: a.Whether the Claimant was constructively dismissed by the Respondent; b.If (a) above is in the affirmative, whether the Claimant is entitled to the reliefs sought. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 11 OF 19 c. Who should bear the costs. 28.In Coca Cola East & Central Africa Limited V Maria Kagai Ligaga [2015] eKLR, the Court of Appeal stated as follows: “The key element in the definition of constructive dismissal is that the employee must have been entitled to or have the right to leave without notice because of the employer’s conduct. Entitled to leave has two interpretations which give rise to the test to be applied. The first interpretation is that the employee could leave when the employer’s behaviour towards him was so unreasonable that he could not be expected to stay- this is the unreasonable test. The second interpretation is that the employer’s conduct is so grave that it constitutes a repudiatory breach of the contract of employment- this is the contractual test.” 29. The Court of Appeal further gave a breakdown of guiding principles when dealing with constructive dismissal as follows: a.What are the fundamental or essential terms of the contract of employment? KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 12 OF 19 b.Is there a repudiatory breach of the fundamental terms of the contract through conduct of the employer? c. The conduct of the employer must be a fundamental or significant breach going to the root of the contract of employment or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract. d.An objective test is to be applied in evaluating the employer’s conduct. e.There must be a causal link between the employer’s conduct and the reason for the employee terminating the contract; that is causation must be proved. f. An employee may leave with or without notice so long as the employer’s conduct is the effective reason for termination. g.The employee must not have accepted, waived, acquiesced or conduct himself to be estopped from asserting repudiatory breach; the employee must-within a reasonable time, terminate the employment relationship pursuant to the breach. h.The burden to prove repudiatory breach or constructive dismissal is on the employee. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 13 OF 19 i. Facts giving rise to repudiatory breach or constructive dismissal are varied. 30.In Godfrey Allan Tolo v Tobias O. Otieno & another [2022] KEELRC 359 (KLR) the court held as follows: “For constructive dismissal to be inferred, the employee must have resigned within reasonable time from his employment, with or without notice, as a result of the employer’s hostile treatment or hostile working conditions at his workplace. The employer must also not have expressed the desire to terminate the employee.” 31. Section 47(5) of the Employment Act provides as follows: “For any complaint of unfair termination of employment or wrongful dismissal the burden of proving that an unfair termination of employment or wrongful dismissal has occurred shall rest on the employee, while the burden of justifying the grounds for the termination of employment or wrongful dismissal shall rest on the employer.” KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 14 OF 19 32. The Claimant, a Finance Manager earning Kshs.350,000/=, alleges that in June 2024 his salary was abruptly cut by half and further deductions imposed without due process, leaving him financially strained. Despite written requests for reinstatement, he claims the Respondent ignored him, forcing his resignation on 12th August 2024. He asserts entitlement to 94 pending leave days and disputes his final dues of Kshs. 219,659/=, arguing the pay cut amounted to constructive dismissal. The Respondent counters that the tea industry crisis in 2023–2024 necessitated cost-cutting measures, and during a management meeting on 13th June 2024 attended by the Claimant, all managers unanimously resolved to implement a 50% pay cut and suspend non-essential benefits. They argue the Claimant did not object, later resigned voluntarily without citing dissatisfaction, and was duly paid his final dues covering salary, leave, and service pay. The Respondent maintains the Claimant is attempting to reframe a voluntary resignation into constructive dismissal. 33.The Claimant was earning Kshs.350,000/= but was reduced by 50% as a result of a meeting they attended on 13th June 2024. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 15 OF 19 The Claimant with the General manger one Wycliff Tonui attended the meeting (See case of Wycliff Tonui -vs- Ndarawetta Tea Factory ELRC 005/2025) and were informed by the management that due to the Financial problems in the Tea factory their salaries would be reduced by 50%. The two signed the Minutes of the said Meeting which the Respondent took it they consented to the salary reduction. 34. The Claimant in this case, unlike Mr. Wycliffe Tonui wrote two letters to the Respondents and asked his salary to be reinstated. These were letters dated 23rd July 2024 and 6th August 2024. He says he did not get a response and he tried to seek a physical meeting with the Respondents but that did not happen. 35. He then resigned by his letter dated 12th August 2024. Even though he did not give the specific reason for his resignation but nevertheless it was clear his resignation was not voluntary. He wrote as follows: “This was not an easy decision for me to make ......” KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 16 OF 19 Then his Advocate wrote a letter to the Respondent dated 14th November 2024 demanding for settlement of Claimant’s demands for unlawful termination. The Claimant clearly did not concede to his salary cut. He expressed it clearly and so the Respondent was left in no doubt that the Claimant’s resignation was due to the unfair labour practice for slashing his salary without his consent express or implied. Unilateral changes to employment contracts are unlawful as held in the case of Bakery Confectionary Food Manufacturing and Allied Workers (K) -VS- Kenafric Industries Ltd (2021) KEELRC 158 KLR and Kamau -VS- Copy Cat Ltd (2025) KEELRC 2330. The court in this case unlike the one of Wycliffe Tonui, the Claimant was expressive he did not accept the salary reduction. 36. The court finds the Claimant did not resign voluntarily and his resignation was due to the prevailing circumstances of the employer slashing his salary. The court finds a case of constructive dismissal is proved and so holds that the Claimant was wrongfully and unfitly dismissed. Judgment is entered in his favour. KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 17 OF 19 37. In that regard, the court proceeds to award him the following compensation for unlawful termination which will be six(6) months equivalent of his salary amounting to Kshs.2,100,000/= and interest at 14% per annum from today’s date till full payment. 38. Costs will also be awarded to the Claimant. Orders accordingly. Dated, Signed and Delivered virtually at Nakuru this 23rd Day of July, 2026. ANNA NGIBUINI MWAURE JUDGE ORDER In 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 KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 18 OF 19 course, this Court has 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. A signed copy will be availed to each party upon payment of Court fees. ANNA NGIBUINI MWAURE JUDGE KRC ELRC CAUSE NO. E006 OF 2025 JUDGMENT PAGE 19 OF 19