[2024] KEELRC 13526 (KLR)

Njoroge v Melchizedek Hospital Limited (Cause E105 of 2023) [2024] KEELRC 13526 (KLR) (27 November 2024) (Judgment)

Neutral citation: [2024] KEELRC 13526 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E105 of 2023

DKN Marete, J

November 27, 2024

Between

Calorine Njoroge

Claimant

and

Melchizedek Hospital Limited

Respondent

Judgment

1. This matter was originated vide a Statement of Claimant dated 9th February, 2023. It does not disclose any issue in dispute on its face.

2. The Respondent in a Statement of Response dated 25th October, 2023 denies the claim and prays that it be dismissed with costs.

3. The Claimant’s case is that she joined the Respondent on 1st January, 2020 on a one year contract of the same date. Her monthly salary was slated at Kshs.60,000. 00. The expiry date of the contract was 31st December, 2020.

4. It is the Claimant’s further case that despite her hard work she was belatedly paid as follows;i.January 2020 salary was paid on 4th March 2020;ii.February 2020 salary was paid on 16th April 2020iii.March 2020 salary was paid on 18th May 2020iv.April 2020 salary was paid on 6th July 2020v.May 2020 salary was paid on 4th August 2020vi.June 2020 salary was paid on 14th September 2020vii.July 2020 salary was paid on 26th October 2020 andviii.August 2020 salary was paid 26th October 2020.

5. Again, her September – December salaries were paid as follows;i.September 2020 salary was paid on 23rd February 2021 andii.October 2020 salary was partly paid on 8th March 2021.

6. She has not being paid her November salary to date.

7. The Claimant’s other case is that due to the difficulties at the work place and late or no payment of salaries, she make up her mind to resign in early October, 2021 but the Respondent pleaded with her to stay and work on locum basis for October as she looked forward to pay her outstanding careers. Subsequently, she was given a cheque of Kshs. 51,499. 00 and on 10th November instant, she was paid three months’ salary arrears for the months of July to September, 2021. In the meantime, the Respondent had automatically converted her terms to permanent and pensionable sometimes in October, 2021. This was by a representation of another fixed term contract for the period 1st January, 2021 to 31st December, 2022.

8. The Claimant submits an ugly and unpleasant stint of service where pay was impossible and was occasionally issued with bouncing cheques. This is as follows;On 31st March 2022, the Claimant was ignorantly made to sign a new contract for the period 11th April 2022 to 10th April 2023 with a net monthly salary of Kshs. 85,000. Signing of this contract was illegal and the Claimant signed it not only out of ignorance but also out of desperation considering the prevailing circumstances. Despite this new illegal contract, the Claimant ended up experiencing the same problem of delayed payment as outlined below:i)April 2022 salary was partly paid on 24th May 2022 and the balance on 3rd June 2022;ii)May 2022 salary was partly paid on 22nd July 2022 and the balance on 16th August 2022; andiii)June 2022 salary was fully paid on 2nd September 2022.

9. Further, and in addition to the foregoing tribulations that the Claimant unfortunately faced in the hands of the Respondent, the Respondent, among many others, ALSO did the following:i)unilaterally deciding to reduce the Claimant’s salary from a net of Kshs. Kshs. 65,000/= to a net of Kshs 55,000/= as from August 2020. The Respondent did not consult the Claimant at all; andii)refusing to give the Claimant her Kenya Revenue Authority P9 Forms to enable her file her KRA returns. Instead, the Respondent asked the Claimant Filed on: 2023-02-13 12:09:05+03 - BY: Ondati Mogaka & Associates Advocates - Reference: E2CUC2BH - KSH. 850. 00 5 to file Nil Returns which was not possible as she was employed. The Claimant reserves the right to report the Respondent to the Kenya Revenue Authority for appropriate legal measures to be taken.She claims thus;i)Constructive/Unlawful Termination Payment of a net of Kshs. 1,020,000/= being 12 months’ net salary on account of constructive/unfair termination. TOTAL - KSHS. 1,020,000/=ii)Outstanding salary for the months of:a.August 2020 – Kshs. 55,000/=;b.December 2020 - Kshs. 55,000/=;c.January 2021 - Kshs. 55,000/=d.February 2021 - Kshs. 55,000/=e.July 2022 - Kshs. 85,000/=f.August 2022 - Kshs. 85,000/=g.September 2022 - Kshs. 85,000/= Filed on: 2023-02-13 12:09:05+03 - BY: Ondati Mogaka & Associates Advocates - Reference: E2CUC2BH - KSH. 850. 00 7h.14 days in the month of October 2022 (14/30 x Kshs. 85,000) – Kshs. 39,666. 67/= TOTAL - KSHS. 514,666. 67iii)Salary Reductions From Kshs. 65,000/= per month to Kshs. 55,000 representing a monthly salary reduction of Kshs. 10,000/=. This reduction was effected in August 2020 till the date of resignation. This is a total period of 26. 5 months. Kshs. 10,000/= x 26. 5 = Kshs. 265,000/= TOTAL - KSHS. 265,000iv)Salary for the period the Claimant was unlawfully stopped from working The claimant was unlawfully stopped working from January 2022 and recalled back in the month of April 2022. This represents a period of 3 months. Kshs. 85,000 x 3 months = Kshs. 255,000/= TOTAL - KSHS. 255,000/=v)Breach of the Claimant’s fundamental human rights On this limb, the Claimant prays for general damages of Kshs. 2,000,000/=TOTAL - KSHS. 2,000,000She prays as followsa)A declaration that the Claimant’s employment automatically converted into a permanent and pensionable one upon the expiry of the initial employment contract on 31st December 2020. b)A declaration that the Respondent constructively terminated the Claimant’s employment.c)A declaration that the Respondent breached the Claimant’s right to life, property and fair labour practices as outlined in the Constitution of Kenya 2010 and various international instruments to which Kenya has either ratified or is a party to.d)A declaration that the Respondent’s unilateral decision to reduce the Claimant’s salary was unlawful.e)A declaration that the Respondent’s failure to pay the Claimant her monthly salaries and locum dues as and when they fell due was illegal and unlawful.f)A declaration that the Respondent’s actions of issuing the Claimant with cheques well knowing that there were no sufficient funds in its Bank accounts to settle the same is illegal and unlawful.g)A declaration that the Respondent’s failure to issue the Claimant with her Kenya Revenue Authority P9 Forms is illegal and unlawful.h)A declaration that the Respondent’s unilateral decision to stop the Claimant’s employment from the beginning of January 2022 to the end of March 2022 was unlawful.i)Payment of a net of Kshs. 1,020,000/= being 12 months’ net salary on account of constructive/unfair termination.j)Payment of Kshs. 265,000 on account of the unilateral reduction of salaries from August 2020 till the date of the Claimant’s resignation.k)Payment of Kshs. 514,666. 67/= on account of outstanding and unpaid salaries.l)Payment of Kshs. 255,000/= on account of salaries during the period when the Claimant was unlawfully stopped from working. Filed on: 2023-02-13 12:09:05+03 - BY: Ondati Mogaka & Associates Advocates - Reference: E2CUC2BH - KSH. 850. 00 9m)General damages of Kshs. 2,000,000/= on account of breach of the Claimant’s fundamental human rights, mental anguish and suffering.n)A mandatory order do issue directing the Respondent, within 14 days of the judgment, to issue the Claimant with her Kenya Revenue Authority P9 Forms for the entire period that the Claimant worked for the Respondent. o) A mandatory order do issue directing the Respondent, within 14 days of the judgment, to issue the Claimant with her Certificate of Service.p)Interest on (i), (j), (k), (l) and (m) above at court rates from the date of filing suit until payment in full.q)Costs of this Claim.r)Any other relief that the Honourable Court may deem fit to grant.

10. The Respondent’s case is a denial of the claim.

11. She, however, admits that in regard to late pay, the Respondent was undergoing financial distress but paid all the claimant’s salaries. The Claimant is therefore put in straight proof thereof.

12. The Respondent further admits that the company was struggling following the Covid -19 Pandemic and had to ask his employees to take salary cuts from the month of July. The Claimant was not stopped from working, or at all.

13. The Respondent’s other case comes out thus; The Claimant was never forced to sign the employment contract but did this on her own volition.

The Respondent was in financial difficulties and therefore salary for the following months to June were partly paid but this were eventually paid in full.

The company convened a meeting of all its employees, the Claimant included and informed them that salaries would be paid in due course and from July, all employees would have to take a salary cut.

The Respondent avers that the company was undergoing financial stress and made this known to all employees whereas the Claimant opted to resign on her will.

This resignation was not due to frustration as her salary was being paid.

The Respondent did not deny issue of a certificate of service to the Claimant. This can be collected any time now.

The Respondent denies that it refused to make good the Claimant demand.

The Respondent denies being served with a demand letter by the Claimant and avers that if this was done, it would have made good the claim by the Claimant.

14. The issues for determination therefore are; 1. Whether there was a constructive termination of the employment of the Claimant by the Respondent.

2. Whether the termination of the employment of Claimant by the Respondent, if at all, was wrongful unfair, unlawful.

3. Whether the Claimant is entitled to the relief sought.

4. Who bears the costs of this suit.

15. The 1st issued for determination is whether there was a constructive termination of the employment of the Claimant by the Respondent. The Claimant in his written submission dated 18th March, 2024 reiterate a case of constant harassment through nonpayment of salaries, breach of contract and non-issue and or renew of contract by the Respondent.

16. It is her further claim and submission that the Respondent as never paid her salaries for November and December, 2020. The Respondent’s evidence on this is false and fraudulence and an internal input of excel spread sheet.

17. The Claimant’s further submission is that document 1 of the Respondent list and Bundle of Document shows that there was no consultation and that the Respondent’s employees were merely informed on the fact that they are going to get a 25% pay cut. This amounted to a unilateral alteration of terms of Claimant’s employment contract. The Claimant seeks to rely on authority of Miyawa & 7 others v Judicial Service Commission (Petition 29 of 2016) [2017] KEELRC 1735 (KLR) (24 February 2017) where the court held thus;“A long chain of authorities on the common law suggest that for a variation of an employment contract to be lawful, there should be mutual agreement between the employer and the employee (or their representatives where there is organised labour). 34. The authorities also envisage that an employee’s consent to the variation may be express or implied and can be inferred from conduct such as by remaining at work after revised terms have been imposed (see Harlow v Artemis Ltd (2008) IRLR 629; Wandsworth B.C. v D’Silva (1998) IRLR 193 and Airlie v City of Edinburgh (1996) IRLR 516).

35. The authorities further show that a unilateral variation of an employment contract without consent of the employee would amount to breach of contract or repudiation (Rigby v Ferodo Ltd (1987) IRLR 516, Security and Facilities Division v Hayes (2001) IRLR 81 and where the employee accepts the repudiation that would amount to constructive dismissal. 8

36. And as to the options available to the employee, the Employment Appeal Tribunal (UK) held in Hogg v Dover College (1990) ICR 39 that where an employer fundamentally varies a contract and the employee continues to serve, the employee may be taken to be serving a fresh contract and it is open to such an employee to bring an action for breach of contract in respect to the earlier contract while serving the new contract (see also Alcan Extrusions v Yates & others (1996) IRLR 327. Statutory law

37. The principal legal architectural framework for employment contracts in Kenya is the Employment Act, 2007. This Act has fundamentally shifted the parameters within which the employment relationship is based.

38. It has codified some of the common law principles and outlined new protective rights particularly to employees.

39. Although predating the Constitution, 2010, the declared purpose of the Act was to assert and define the fundamental rights and basic conditions of service of employees and therefore in a certain respect, it sets out the contours of the right to fair labour practices envisaged under Article 41 of the Constitution.

40. Part III of the Employment Act, 2007 has tried to provide for the essentials (essentiala) of an employment contract and of particular interest in the instant case are section 10(2) which provideA written contract of service shall state—(a)the name, age, permanent address and sex of the employee;(b)the name of the employer;(c)the job description of the employment;(d)the date of commencement of the employment;(e)the form and duration of the contract;

41. And section 10(5) which is to the effect that Where any matter stipulated in subsection (1) changes, the employer shall, in consultation with the employee, revise the contract to reflect the change and notify the employee of the change in writing.

42. The Employment Act, 2007 appears to contemplate consultations between an employer and employee where the essential of an employment contract are being altered.

43. The essentiala of a contract in this respect would include duration of contract, job description, identity of the employer, place and hours of work and remuneration among others.”

18. The Claimant further submits her resignation on 14th October, 2022 was out of frustration because continued employment with the Respondent bring harsh and unfavourable conditions of work that have been outlined in these proceedings.

19. The Respondent submits a case of no termination of the employment of the Claimant by herself. On this, she seeks to rely on authority of Coca Cola East and Central Africa versus Maria Kagai Ligaga,(2015) and submit that the Claimant has satisfied the above principles in her claim against the Respondent. This comes out thus;The COURT OF APPEAL in Coca Cola East and Central Africa Limited versus Maria Kagai Ligaga, (2015) eKLR, set out the legal principles for determining constructive termination and the principles are as follows:“a. What are the fundamental or essential terms of the contract of employment?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 employee terminating the contract i.e., 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 conducted himself to be estopped from asserting the 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.”i.Facts giving rise to repudiatory breach or constructive dismissal are varied.”

20. The Respondent in the penultimate denies causing the Claimant’s resignation and submits that the burden of proof of constructive termination of employment lies on the Claimant. He who alleges must proof. The Claimant is therefore called upon to proof the various allegations she has made in support of her claim.

21. The Respondent’s case overwhelms that of the Claimant. The Claimant enters and submits a case of constructive dismissal by the Respondent in that her resignation from employment was prompted by the Respondent unbearable and hostile conditions at the work place. The Claimant however does not get out of her way to succinctly demonstrate this on a preponderance of evidence. She merely alleges misdeeds and unfavourable working conditions by the Respondent. This is not enough. It must be demonstrated by tangible evidence by the party contending the same. The Claimant has failed in this and must therefore fail in her claim. I therefore find a case of no constructive termination of the employment on the Claimant by the Respondent. This answers the 1st issue for determination.

22. On a finding of no constructive termination of employment in the circumstances, all other issues for considerations fall by the way side. They are not necessary for any analysis and determination.

23. I am therefore inclined to dismiss the claim with orders that each party bears their costs of the same.

DELIVERED, DATED AND SIGNED THIS 27TH DAY OF NOVEMBER 2024. D. K. NJAGI MARETEJUDGEAppearances:1. Mr. Ondati instructed by Ondati Mogaka & Associates Advocates for the Claimant.2. Mr. Ochieng instructed by Muthoga Gaturu & Company Advocates for the Respondent.