Gatuku v Geminia Insurance Co. Limited [2023] KEELRC 2689 (KLR)

Gatuku v Geminia Insurance Co. Limited (Employment and Labour Relations Cause 79 of 2019) [2023] KEELRC 2689 (KLR) (27 October 2023) (Judgment)

Neutral citation: [2023] KEELRC 2689 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Employment and Labour Relations Cause 79 of 2019

AN Mwaure, J

October 27, 2023

Between

James Gatuku

Claimant

and

Geminia Insurance Co. Limited

Respondent

Judgment

Introduction 1. The Claimant filed a Memorandum of Claim dated 7th February 2019.

Claimant’s Case 2. The Claimant avers that vide a letter of appointment dated 30th September 1992 he was employed as a supervisor with effect from 1st November 1992 and has risen over the ranks for a period of 26 years to the level of operations manager life department with a monthly salary of Kshs 158,000.

3. The Claimant avers that on 26th April 2018, the General Manager Life, Peter Gichuru requested him to approve payment of a transaction using RTGS contrary to company practice that required the operations manager to approve payment only after confirming receipt of necessary documents inclusive of bank statements.

4. The Claimant avers that he raised the aforesaid question with the general manager and even asked him to wait till 2pm for actual confirmation that the money had been credited into the respondent’s accounts before approving such payments but he failed to listen.

5. The Claimant avers that following the aforesaid incident, vide a letter dated 7th May 2018, Peter Gichuru demanded him to show cause, the main accusation being he declined to issue instructions for the release of money in the financial payment system.

6. The Claimant avers that he responded to the notice to show cause vide a letter dated 8th May 2018 and requested for an opportunity to be heard personally so as to address the issues and further clarified it was company practice to await credit into payment account as opposed to relying on RTGS forms from debtors.

7. The Claimant avers the Managing Director, Ben Ndegwa vide a letter dated 9th May 2018, directed the Claimant to proceed on a two-month compulsory leave pending investigations without giving him an opportunity to be heard.

8. The Claimant avers that vide a letter dated 22nd May 2018 the Managing Director informed him of a hearing before the Human Resource Committee to accord him an opportunity to be heard and defend himself. He says this meeting was converted to a disciplinary committee meeting . He says this was merely a formality to rubber stamp an already predetermined decision against him.

9. The Claimant avers that he voiced his concerns concerning the meeting vide a letter dated 24th May 2018 and the Human Resource Committee instructed that he withdraws the letter or it would be used in the determination of his case.

10. The Claimant avers that he was not provided with signed minutes and further the hearing was conducted before commencement or completion of investigations and that to date he is yet to be informed of the outcome of the investigations.

11. The Claimant avers that vide a letter dated 6th July 2018 he was informed the committee’s decision to uphold the allegations against him which had not been communicated to him and was further informed he had been redeployed to the Respondent’s Kisii Branch in the capacity of Business Development Manager effective 17th July 2018.

12. The Claimant avers that the redeployment was not subject to any training or preparation and was not supplied a conclusive job description. Further the company did not have this post in any of its branches in the country as illustrated in the Respondent’s HR manual, the Claimant avers it was a set up to fail and an attempt to force him to resign.

13. The Claimant avers that he declined the transfer and requested for a reversal and the Respondent ceased communication. And upon completion of compulsory leave, he reported back to work on 17th July 2018 to find the locks to his office changed and was informed that he was no longer allowed on the company premises.

14. The Claimant avers that he spoke to the Managing Director on 18th July 2018 in the presence of the Finance Manager from which he learnt the intention to sack him was ongoing since 2015 and the redeployment was set up to fail and a scheme to compel him to resign.

15. The Claimant avers that vide a letter dated 18th July 2018, he demonstrated to the Respondent that its conduct amounted to constructive dismissal and was meant to force him to resign. He tendered his forced resignation and proceeded on leave on 18th July 2018 and was paid for the month of July and August 2018 when on leave.

16. The Claimant avers that he did not receive any response to the aforesaid letter, and in the absence of any communication from the Respondent and his leave coming to end, he attempted to reconcile with the company vide a letter dated 15th September 2018.

17. The Claimant avers that on 18th September 2018 he received a letter from the Respondent dated 13th September 2018 which informed him that the forced resignation had been accepted and he would receive his salary up to 18th July 2018 as well as payment of accrued unused leave less the salary remitted from 19th July 2018 to 31st August 2018.

18. The Claimant avers that the company has never paid his final dues.

Respondent’s Case 19. In opposition, the Respondent filed a reply to claim dated 4th March 2019.

20. The Respondent avers that the Claimant’s conduct as set out in the letter dated 7th May 2018 could bring harm or loss to the Respondent’s business and the Claimant was accorded a fair hearing to address the matters in question.

21. The Respondent avers that the Claimant was required to work anywhere in Kenya and denies the allegations therein that the claimant was forced to resign.

22. The Respondent avers that the Claimant resigned vide his letter dated 18th July 2018 which was treated as three months’ notice hence continued to pay his salary.

23. The Respondent avers that the Claimant refused to work in Kisii as directed in the letter dated 6th July 2018 and instead resigned in writing.

Evidence 24. By consent, the parties adopted their witness statements and pleadings as their evidence in chief and the suit was canvassed by way of written submissions.

Claimant’s Submissions 25. It was submitted for the Claimant that his letter dated 18th July 2018 is clear from its wording that his resignation was not voluntary as it was influenced by the Respondent hence amounted to constructive dismissal and relied on the Court of Appeal case Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] eKLR which provides principles of constructive dismissal.

26. The Claimant submitted that the General Manager’s conduct of pressuring the Claimant to approve payment contrary to the Respondent’s policy; sending him on 2 months compulsory leave for investigations; recalling him from leave without conducting investigations; calling him for a meeting which was converted to a disciplinary hearing in breach of section 41 of the Employment Act; locking him out of his offices and giving instructions to the guards not to let him in and the CEO confirmation in the presence of the finance manager and head of life section of the intention to sack him from 2015 amounted to his immediate superior or supervisor’s repudiatory breach of the Claimant’s contract of employment.

27. The Claimant submitted that the Respondent on 14/7/2015 prepared a universal Human Resource Manual that defined all universal conditions for all Geminia Insurance Company employees which provides at page 24 for payment of severance pay at separation from service and expiration of notice.

28. The Claimant submitted that having established the Claimant was constructively dismissed and the termination was unfair the court has power to award any or all remedies provided under section 49 of the Employment Act and the respondent’s HR Manual.

Respondent’s Submissions 29. The Respondent submitted that other than the notice to show cause, it would appear the substantive dispute arose when the Claimant received the letter dated 6th July 2018 which redeployed the Claimant to the Kisii office as Business Development Manager and all terms of his contract remained the same. The Claimant declined to go on transfer citing numerous reasons which were spurious and his conduct was insubordinate to his superiors.

30. The Respondent submitted that the Claimant’s protest letter dated 24th May 2018 to the Chairman Human Resource Committee alleging bias was written beforehand and handed over to the Chairman in the presence of the disciplinary panel when the Claimant concluded responding to the allegations of misconduct and he never took time to reflect on the proceedings of the board before writing the letter.

31. The Respondent submitted the Claimant was insubordinate to authority. The transfer to Kisii was on the same terms and conditions of his employment and the Claimant was not dismissed, constructively dismissed or removed from employment by the Respondent but he voluntarily resigned from employment which by his previous conduct he had set out to frustrate.

32. The Respondent submitted that the Claimant has muddled up and convoluted the prayers sought as he asks the court to find he was declared redundant while also claiming of being constructively dismissed.

Analysis and Determination 33. The main issue for determination is whether the Claimant was constructively dismissed.

34. The Court of Appeal at Nairobi in Coca Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] eKLR held:What is the key element and test to determine if constructive dismissal has taken place? The factual circumstances giving rise to constructive dismissal are varied. The key element in the definition of constructive dismissal is that the employee must have been entitled or have the right to leave without notice because of the employer’s conduct. Entitled to leave has two interpretations which gives rise to the test to be applied. The first interpretation is that the employee could leave when the employer’s behavior 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 constituted a repudiatory breach of the contract of employment - this is the contractual test. The contractual test is narrower than the reasonable test. The dicta in Western Excavating (ECC) Ltd. -v- Sharp [1978] ICR 222 adopts the contractual approach test and we are persuaded that the test is narrow, precise and appropriate to prevent manipulation or overstretching the concept of constructive dismissal. For this reason, we affirm and adopt the contractual test approach. This means that whenever an employee alleges constructive dismissal, a court must evaluate if the conduct of the employer was such as to constitute a repudiatory breach of the contract of employment. Whether a particular breach of contract is repudiatory is one of mixed fact and law. (See Pedersen -v- Camden London Borough Council [1981] ICR 674). The criterion for evaluating the employers conduct is objective; the employer’s conduct does not have to be intentional or in bad faith before it can be repudiatory (See Office -v- Roberts (1980) IRLR 347). The employee must be able to show that he left in response to the employer’s conduct (i.e. causal link must be shown, i.e. the test is causation). In the case of Jones -v- F. Sirl & son (Furnishers) Ltd. [1997] IRLR 493, it was held that there can still be constructive dismissal if the employee waits to leave until he has found another job to go to. The employee must leave because of the breach but the breach need not be the sole cause so long as it is the effective cause. (See Walker -v- Josiah Wedgwood & Sons. Ltd. [1978] IRLR 105). The criterion to determine if constructive dismissal has taken place is repudiatory breach of contract through conduct of the employer. The burden of proof lies with the employee. The employer’s conduct must be such as when viewed objectively, it amounts to a repudiatory and fundamental breach of the contractual obligations. (See Wooder -v- Wimpey [1980] 1 WLR 277; see also Malik and Mahmud -v- Bank of Credit and Commerce International [1998] AC 20). If the employee makes it clear that he or she is working under protest, he/she is not to be taken to have waived the right to terminate the contract under constructive dismissal. We adopt the dicta in the above cited persuasive judicial decisions as establishing relevant principles in constructive dismissal.

35. The legal principles relevant to determining constructive dismissal include the following: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.”

36. In consideration of the pleadings and the documents produced before this court, the Claimant has not established that the employer committed a repudiatory breach of his contract and that the employer’s conduct was so unreasonable as to cause him to resign.

37. The claimant had a good number of issues with the respondent and even underwent disciplinary hearing. Finally, on 6th July 2018 he was redeployed to Geminia Kisii branch as a Business development manager.

38. The Claimant submitted the redeployment by the Respondent was a set up to fail. However, paragraph 2 of his employment contract clearly provides:“Please note that during your employment at Geminia, you may be posted at any other office in Geminia anywhere in Kenya at the discretion of the company”.

39. The court would find the claimant acted rashly before he considered the consequences of resigning from his employment.

40. Further, in the redeployment letter dated 6th July 2018 the Respondent informed the Claimant he will be granted five (5) working days off to enable him prepare for relocation and settle in and will be paid a transfer allowance as per the company policy and all other terms of his employment will remain the same. This does not seem to be unfair to the claimant and is within the employer’s policy.

41. The claimant on 18th July 2018 tendered his resignation letter. He did inform the company that it was not his wish to resign but nevertheless he did tender his resignation.

42. The court has considered the claimant’s submissions where he states that the conduct of the respondent’s supervisor Mr. J Ndegwa and Mr Peter Gichuru justified the conduct of constructive dismissal. The court disagrees with the claimant’s submissions. The claimant was not dismissed despite having gone through disciplinary hearing but instead he was deployed to another region and his terms of employment were not revised to his disadvantage. The case of Kenneth Onialo vs Majlis Resort Lamu Ltd cause No 42 of 2018. The court observed that the claimant resigned without notice to the respondent in terms of section 35 of the employment act. The court rightly observed that it was a case of resignation and not unfair termination.

43. Similarly, in this case the claimant resigned on his own volition and even if there were issues between him and the respondent he should not have taken a rush decision to tender a resignation without attempting to discuss the logistics of transferring him to Kisii.

44. In his resignation letter of 18th July 2018 claimant did not give notice as required in his letter of appointment where he was required to give 2 months’ notice or payment of salary equivalent to three months salary by any of he parties. He was ideally the one who was meant to give three months’ notice or pay three months’ salary in lieu of notice.

45. The respondent in his letter accepting the claimant’s resignation stated they had paid claimant’s salary for a period from 9th July 2018 to August 2018 even though his resignation was on 18th July 2018. The respondent even paid claimant salary for July and August 2018. The correct position was that the claimant was the one who was supposed to give notice when resigning or pay 3 months’ salary in lieu of notice. There is no notice referred in his referred resignation letter.

46. Flowing from the above and from the pleadings and submissions hereto the court is convinced the respondent was not culpable of repudiatory breach of the fundamental terms of employment contract leading to constructive dismissal of the claimant.

47. The court holds that the claimant was not unfairly dismissed due to constructive dismissal. The claimant’s suit is therefore dismissed and the prayers thereto are unmerited and are not granted.

48. The court orders each party to meet the costs of the suit considering the claimant also served the respondent for a long period.Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 27TH DAY OF OCTOBER, 2023. ANNA NGIBUINI MWAUREJUDGEORDERIn 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 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 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 MWAUREJUDGE