The Labour Relations Court has ruled against Stima Investment Cooperative Society for constructively dismissing its former head of legal by assigning her demeaning duties, such as keeping office keys, and excluding her from key meetings.
The court found that the Sacco’s actions created an intolerable work environment, forcing Viola Monica Atieno Odhiambo's resignation, which amounted to constructive dismissal under the law.
Ms Odhiambo resigned in 2023 and subsequently sued, arguing that her departure from work was involuntary. She cited multiple grievances, including being removed from the Sacco’s board meetings—where she had previously taken minutes—without explanation.
Additionally, she said she was assigned the role of office keyholder despite being a lactating mother, making it impractical for her to arrive early at work or leave late.
Further allegations included arbitrary surcharges for a lost laptop, persistent harassment, unfair accusations of insubordination, and biased performance assessments.
The Sacco also permitted her assistant to attend Heads of Departments meetings despite her presence as the Legal Department head.
Ms Odhiambo had joined Stima Investment Co-operative Society Limited in March 2018 as Legal Officer under a three-year contract, which included inpatient medical coverage of Sh5 million and outpatient coverage of Sh200,000.
However, the Sacco unilaterally reduced her inpatient cover to Sh1 million without consultation, violating the Employment Act’s requirement for mutual agreement on contractual changes.
Photo credit: File
This downgrade had severe financial repercussions. In December 2020, Ms Odhiambo was hospitalised with a bill of Sh1.5 million.
The insurer covered only Sh1 million, leaving her liable for Sh506,372 after the Sacco recovered the balance from her. She later incurred another Sh140,000 in medical expenses. The court declared the downgrade unlawful and ordered reimbursement totaling Sh646,372.
"The employer cannot alter the employee’s employment contract without consulting the employee,” the court said.
The court’s most critical findings centered on her second contract, effective March 2021 after maternity leave. The Sacco’s CEO had authorised her legal assistant to attend Heads of Departments meetings in her stead, undermining her authority.
The court deemed this a “direct assault” on her role and a breach of contract.
Her assignment as keyholder was also contested. Ms Odhiambo testified that despite protesting the impracticality due to her breastfeeding needs, the CEO insisted she maintain the duty.
The court ruled that these additional responsibilities were not stipulated in her contract and dismissed the Sacco’s claim that she merely had to maintain a key register.
Photo credit: Shutterstock
In its judgment, the court emphasised that constructive dismissal requires conduct so severe it signals the employer’s intent to no longer honor the contract.
It rejected the Sacco’s argument that Ms Odhiambo delayed her resignation unreasonably, noting that employees may seek alternatives before leaving.
For remedies, the court awarded her five months’ salary (Sh670,000 based on her Sh134,000 monthly pay), refunded Sh134,000 deducted as notice pay, and ordered reimbursement of Sh16,500 surcharged for the laptop and Sh36,150 for accrued leave.
However, it declined a tax refund, directing instead that the amount be remitted to the Kenya Revenue Authority.
