https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2155

REPUBLIC OF KENYA IN THE EMPLOYMENT & LABOUR RELATIONS COURT AT KERICHO ELRC CAUSE NO. E005 OF 2025 (Before Hon. Lady Justice Anna Ngibuini Mwaure) WYCLIFFE TONUI.………………….…………...…...… CLAIMANT VERSUS NDARAWERRA TEA FACTORY LTD……..….. ……..RESPONDENT JUDGMENT Introduction 1. The Claimant filed a Statement of Claim dated 28th 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 CLAIM NO. E005 OF 2025 JUDGMENT PAGE 1 OF 23 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.3,454,270.65. ii.Damages for constructive dismissal iii. iv. Interest on 1 and 2 above 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 on 1st April 2017 as an Electrical/Mechanical Supervisor and later promoted to General Manager on 16th February 2021, earning Kshs.450,000/= monthly by 31st May 2022. 3. In June 2024, the Claimant avers that the Respondent abruptly slashed his salary by half to Kshs.225,000/= and introduced deductions without due procedure, leaving him financially strained. He resigned in July 2024 after giving one month’s notice, preparing handover notes, and clearing with the Respondent. KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 2 OF 23 4. At resignation, the Claimant avers that he had 87 pending leave days, but his final dues of Kshs.631,500/= excluded his last salary and contained a clause barring him from suing. 5. The Claimant argues that the unilateral salary reduction amounted to constructive dismissal, citing that he was forced out despite a clean record of service. 6. The Claimant emphasizes that the Respondent’s actions were unprocedural and unlawful, causing him hardship, and the weight of his claim rests on the principle that slashing salary without consultation or lawful justification violates statutory protections under the Employment Act, and the Respondent’s conduct amounted to unfair labour practices. Respondent’s response to the Statement of Claim 7. The Respondent opposed the statement of claim vide a response to the statement of claim dated 2nd April 2025. 8. The Respondent strongly disputes the Claimant’s allegations of constructive dismissal, insisting that he resigned voluntarily. KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 3 OF 23 9. The Respondent acknowledge his appointment as General Manager on 30th January 2021 but challenges his claim of diligent service. 10. The Respondent emphasizes that from mid-2023 the tea industry faced severe financial strain due to drought and competition from Tanzania, forcing all factories to adopt cost-cutting measures. A management meeting held 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. 11. The Respondent underscores that the Claimant never objected to these resolutions and later resigned on 22nd July 2024 without citing dissatisfaction, with his resignation accepted on 22nd August 2024. 12. The Respondent further aver that the Claimant was duly paid Kshs.631,500/= covering salary for days worked, 35.5 pending leave days, and service pay, and denies any unlawful deductions or unpaid dues. 13. The Respondent argues that the Claimant is attempting to reframe a voluntary resignation into KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 4 OF 23 constructive dismissal to unjustly enrich himself, while in reality the pay cut was a necessary, industry-wide measure to safeguard jobs for over 50 employees. 14. On this basis, the Respondent prays that the claim be dismissed with costs. Claimant’s evidence in court 15. CW1, the Claimant, adopted his written statement dated 25th January 2025, together with his bundle of documents dated 28th January 2025, marked as exhibits 1 to 10 as his evidence in chief. 16. CW1 testified that he was employed on 2nd April 2017 and served until 22nd August 2024 as the General Manager. He stated that his salary was reduced from Kshs.450,000/= to Kshs.225,000/= and that further deductions from his allowances were effected without proper justification, leaving him with a net pay of approximately Kshs.22,000/=. He explained that upon approaching the Managing Director regarding the pay cut, he was assured that his full salary would be restored. However, in June 2024 he received only Kshs.220,000/=, prompting him to tender his resignation on 22nd July 2024, giving one month’s notice. He added that he duly handed over his duties, KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 5 OF 23 but the Human Resource Department recalculated his terminal dues at a lower figure and failed to pay his August salary up to 22nd August 2024. 17. CW1 further testified that deductions were made in respect of a vehicle allowance, yet he had not been allocated a vehicle, and that he continued to receive only Kshs.22,000/= despite having other financial obligations. He described the workplace as toxic, stating that he was subjected to verbal harassment and being shouted at, which contributed to his decision to resign. 18. In cross-examination, CW1 stated that his payslips from January to March 2024 reflected a gross pay of Kshs. 225,000/=. He confirmed that he did not have a permanent car but used pool vehicles, being in charge of all company cars. He was informed that Kshs.104,000/= was allocated for car use. His payslip also reflected a car loan of Kshs.103,036/=, which he clarified was his personal loan and not a company facility. He testified that he was entitled to Kshs.103,036/= plus Kshs.22,000/=. He acknowledged that he was contributing to NSSF and that his contract did not provide for service pay. He KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 6 OF 23 confirmed that he was required to attend all management meetings, including the meeting of 13th June 2024, where he was present. He maintained that, contrary to the respondent’s position, the tea industry was not adversely affected at the time. 19. CW1 further testified that he attended and signed the minutes of the meeting where resolutions on pay cuts were adopted, and his salary was subsequently reduced in June 2024. He stated that no promise was made to reimburse the deducted salary. He disclosed that he currently works for Chevron as a Factory Manager. In his resignation letter, he indicated that he was leaving to face new challenges. As General Manager, he was aware that the company communicated officially, and the salary computation attached to his documents was issued by the Human Resources Department. However, upon exit, the company gave him different figures. He added that during his employment he took leave, and the company had informed him he had 35 leave days, though he believed they were 87 days. KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 7 OF 23 20. In re-examination, CW1 stated that the car benefit deductions had not been communicated to him beforehand but were effected in June 2024 and reflected in his final dues. He reiterated that he did not consent to the salary deduction, noting that although a letter was issued, he did not sign it. He maintained that he was not paid for any leave days. Respondent’s evidence in court 21.RW1, Bhavesh Patel, the Respondent’s CEO, adopted her witness statement dated 29th October 2025 together with the bundle of documents dated even date marked as exhibits 1 to 17 as his evidence in chief. 22.RW1 testified that the company does not have a service pat policy for its management staff. He stated that CW1 produced a payslip with a line written which reads Kshs.104,000/= written for future use and was a car he was using but was being changed by the CEO before. The CEO was stationed in Nairobi, so the vehicle was changed on CW1 as the end use of the car. He stated that CW1 changed from July 2024. 23. In cross-examination, RW1 stated that CW1, as General Manager, was required to work at least six KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 8 OF 23 days a week and additional days as necessary. He testified that CW1 did not log any leave days and no leave application forms were found for him. He added that an audit conducted by Mr. Gitonga revealed no pending leave days as at 2023, although some forms indicated leave entries, but CW1’s name did not appear in those records. RW1 further explained that certain financial measures had been agreed upon but were not implemented, resulting in no improvement in the company’s financial position. 24. 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 Mr. Gitonga. 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 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, KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 9 OF 23 although CW1 had been issued with a company vehicle. 25. The Parties were ordered to file written submissions. Claimant’s written submissions 26. The Claimant submitted that the Respondent unlawfully and unilaterally reduced his salary from Kshs.450,000/= to Kshs. 225,000/= without consultation or written consent, in violation of section 10(5) of the Employment Act, which requires consultation and written notification before varying contract terms. He argues that the salary reduction was a fundamental breach of contract, cited the cases of 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), where courts held that unilateral variation of wages without consent is unlawful. Counsel for the Claimant likens the Claimant case to Kamau v Copycat Ltd [2025] KEELRC 2330, where deductions for business KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 10 OF 23 sustainability were found unlawful, and invokes Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394 (KLR) to argue that the Respondent’s actions amounted to constructive dismissal, as they forced him to resign under intolerable conditions. 27. The Claimant further relied on Henry Ochido v NGO Co-ordination Board [2015] KEELRC 150 (KLR), Nathan Ogada Atiagaga v David Engineering Limited [2015] KEELRC 75 (KLR), and Maxwell Miyawa & others v Judicial Service Commission [2017] KEELRC 593 (KLR), which defined constructive dismissal as resignation compelled by fundamental breaches of contract. 28.The Claimant emphasizes that the unilateral salary cut, introduction of deductions, and withdrawal of benefits destroyed the trust and confidence in the employment relationship, breaching the implied duty of fair labour practices. The Claimant insists that he is entitled to his dues, including 87 pending leave days, gratuity as previously paid to senior managers, and full terminal benefits. The Claimant also challenges KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 11 OF 23 the Respondent’s attempt to bar him from suing by requiring him to sign a waiver. 29. Finally, the Claimant submitted that costs should follow the event under section 27 of the Civil Procedure Act, citing Kenya Power & Lighting Company Limited v Esther Wanjiru Wokabi [2014] KEHC 3174 (KLR), and prays for payment of Kshs.3,454,270.65/=, damages for constructive dismissal, interest, costs, and any other relief the court deems fit. Respondent’s written submissions 30. The Respondent submits that the Claimant was not constructively dismissed but voluntarily resigned on 22nd August 2024, despite alleging that the resignation was triggered by a 50% salary deduction. The Respondent emphasizes that the pay cut was a collective resolution adopted at a management meeting on 13th June 2024, which the Claimant attended and even signed the minutes, thus satisfying section 10(5) of the Employment Act requiring consultation but not employee consent. The Respondent relied on Emmanuel Wambua Muthusi & 6 others v Khoja Shia Ithna Ashari KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 12 OF 23 Education Board t/a Jaffery Academy [2020] KEELRC 574 (KLR), where Rika J held that salary variation under economic strain is lawful after consultation, and distinguished cases such as China Civil Engineering Construction Corporation (Kenya) Ltd v Lewa [2023] KEELRC 1926, Kamau v Copycat Ltd [2025] KEELRC 2330, and Miyawa & 7 Others v Judicial Service Commission [2017] KEELRC 1735, noting those involved redundancy or unilateral variation unlike here. Applying the test in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] KECA 394 (KLR), they argue the claimant’s resignation letter did not cite any breach, failing both the “unreasonable” and “contractual” tests for constructive dismissal. 31. On reliefs, the Claimant invoke section 74 of the Employment Act and Pride Kings Security Service v Araka [2026] KEELRC 296, stressing leave claims must be strictly proved, and 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 JUDGMENT PAGE 13 OF 23 KRC CLAIM NO. E005 OF 2025 Nyanguncha Omanga v Bob Morgan Services Limited [2013] KEELRC 810 (KLR), since NSSF contributions were made. Gratuity is rejected as held under Pathfinder International Kenya Ltd v Stephen Ndegwa Mwangi [2019] KECA 759, as the contract lacked such provision. The underpayment claim is barred by estoppel, citing 748 Air Services Limited v Theuri Munyi [2017] KECA 419 (KLR), because the claimant accepted the reduced salary without protest. Relying on section 107 of the Evidence Act, the Respondent concludes the Claimant has not discharged the burden of proving constructive dismissal, urging dismissal of the claim with costs. Analysis and determination 32. 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. c. Who should bear the costs. KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 14 OF 23 33. 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.” 34. 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 CLAIM NO. E005 OF 2025 JUDGMENT PAGE 15 OF 23 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 CLAIM NO. E005 OF 2025 JUDGMENT PAGE 16 OF 23 i. Facts giving rise to repudiatory breach or constructive dismissal are varied. 35. 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.” 36. 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 CLAIM NO. E005 OF 2025 JUDGMENT PAGE 17 OF 23 37. The Claimant, employed by the Respondent since April 2017 and later promoted to General Manager, earned Kshs. 450,000/= until June 2024 when his salary was reduced to Kshs.225,000/= and deductions introduced, prompting his resignation in July 2024 after giving notice and handing over. He claims 87 pending leave days and unpaid dues, arguing the unilateral pay cut amounted to constructive dismissal. The Respondent counters that the tea industry was in crisis, and a management meeting on 13th June 2024 attended and signed by the Claimant resolved to implement a 50% pay cut for all management staff. The Respondent maintains the Claimant resigned voluntarily on 22nd July 2024, was paid Kshs. 631,500/= for salary, 35.5 leave days, and service pay, and is now attempting to reframe a voluntary resignation as constructive dismissal, while the pay cut was a necessary industry-wide measure to safeguard jobs. The Claimant resigned on 22nd July 2024 and filed this claim on 28th January 2025. 38. The court is very conscious that an employer cannot reduce the salary and/or benefits of an employee KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 18 OF 23 without the consent of the employee. To reduce the salary of an employee unilaterally amounts to unfair labour practice. The Respondent had a meeting with the Claimant and other Senior Management on 13th June 2024 and informed them of the decision to reduce the salaries of the Senior Management because of the crunch in the tea industry. The Claimant did not raise any objection at the meeting or thereafter. At least there is no record in court of such objection. 39. The case of WANGOMBE -VS- MAWINGO NETWORKS LTD CASE 048 OF 2022 (2024) KEELRC 126 the court upheld as lawful termination of employment because the employer explained its financial difficulties made a clear request and employee expressly consented after full disclosure. This decision supports the principle that Financial hardship can justify a salary reduction only where employee agrees after full disclosure. 40. In the present case, the Claimant as already explained attended the meeting where the Respondents informed them of their decision to KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 19 OF 23 reduce their salaries. The Claimants did not raise objection. He then tendered his resignation dated 22nd July 2024 and honestly did not allude to a toxic working environment or unfair labour practice that did cause him to resign involuntarily justifying constructive dismissal as per the tenets that support constructive dismissal as unlawful termination. 41.The court having considered the pleadings, submissions, cited authorities as well as applicable law holds that the Claimant was not constructively dismissed. His testimony and resignation letter show that he accepted the salary deduction and expressed appreciation for his time with the Respondent. He said he wished to go to pursue other challenges and opportunities in his career. He also signed the Minutes of 13th June 2024 where the issue of salaries reduction was passed. Such conduct is inconsistent with resignation under duress. In Milton M. Isanya v Aga Khan Hospital Kisumu [2017] KEELRC 571 (KLR), the court held that resignation prompted by fear of summary dismissal, without evidence of a hostile environment, does not meet the threshold for constructive dismissal. Applying that principle, the KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 20 OF 23 Claimant’s resignation was voluntary and cannot be construed as constructive dismissal. The prayer for wrongful and unfair dismissal fails and the same is dismissed. No relief will be awarded for constructive dismissal therefore. 42. The court however observed the terminal dues the Claimant was paid at the end of his service. The same was as follows: DATAILS ITEM S/ NO 3 4 5 6 7 Pending Leave Days Salaries -August 2024 Service Salary Revision Underpayment by 50% Vehicle Benefit NO. OF DAYS/YEA RS TOTAL PAYMENT 35.5 532,500.00 22 330,000.00 Days Days Years 7 1,575,000.00 Months 450,000.00 24month s Total salary Owed (Gross) Total Salary NET Payable 2 94,00 0.00 2,256,000.00 631,500.00 631,500.00 The court does pick issues only with the deduction of vehicle benefits being Kshs.2,256,000/= for Twenty- Four (24) Months. The Claimant’s contract of employment does not support such a benefit and even his paylip of January 2024 showed 0 for vehicle allowance. KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 21 OF 23 Even in court, the Respondent MR. BHAVESH PATEL in his evidence could not explain clearly about this motor vehicle benefit. In any event, such item is not in the Claimant’s contract of 30th January 2021 whereby he was appointed General Manager. The court will order the Respondent to pay the Claimant Kshs.2,256, 000/= plus interest at 14% per annum from date of this judgment till full payment. 43. Each party will pay their costs of this case. 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 KRC CLAIM NO. E005 OF 2025 JUDGMENT PAGE 22 OF 23 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 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 CLAIM NO. E005 OF 2025 JUDGMENT PAGE 23 OF 23