Chief executives are sometimes pushed out long before their contracts formally expire. Boards may strip them of responsibilities, cut off access to company systems or place them on leave while a successor takes over, creating an awkward period in which an executive remains employed but is effectively out of the job. Can they sue?
That is what unfolded at the Kenya Tea Development Agency (KTDA), where CEO Wilson Muthaura Mathiu was locked out of the workplace months before his contract was due to end.
Mr Mathiu was still under contract in January 2026 when his work email was deactivated. He was also removed from official work and board WhatsApp groups, and another executive took over his duties, effectively rendering him an employee without a workplace.
His driver and other benefits attached to the CEO position, including the daily newspapers, were also withdrawn. This was before his contract expired on April 20, 2026, triggering a labour dispute with KTDA and ending with a mixed judgment.
The Employment and Labour Relations Court said the agency could send him on terminal leave because he had 29.5 accrued leave days. But it found KTDA breached his contract by cutting off workplace access and benefits before employment ended.
On January 16, KTDA board directed Mr Mathiu to proceed on terminal leave pending retirement and replaced him with Francis Miano as acting Group CEO. At the time the notice was issued, the petitioner had three months remaining on his employment contract.
KTDA announced Mr Miano’s appointment on January 17, saying he would provide continuity and noting his more than 30 years of professional experience and long service within the agency.
Mr Mathiu had held senior management positions, including Group General Manager-HRA, before becoming acting CEO on June 22, 2021. He was confirmed as CEO under a three-year contract dated October 7, 2021, later renewed to April 20, 2026, with a monthly salary of Sh1.9 million.
He was on approved leave when the January 16 terminal leave letter referenced termination of employment was issued. He said the leave was ending on January 21.
In his court papers, Mr Mathiu said he learned about the termination through social media platforms and had not been personally served with the letter.
He said the move went beyond using accumulated leave. His email and access to SAP, Chaiweb and Informax were deactivated.
The former CEO said that while on leave, he was removed from all official work, board, management and employment-related WhatsApp groups. He said he was denied his office, while the acting CEO occupied it.
The monthly salary was not paid.
“These acts prevented the petitioner from performing his duties, resulting in unfair labour practices and violations of rights under the Employment Act (the Act). The imposed leave and lockout were not justified,” he told the court.
Constructive dismissal
He sued, claiming constructive dismissal and sought more than Sh40 million in compensation. His claim included three months’ notice pay, 29.5 accrued leave days, 16 board sitting allowances, vehicle deductions and 12 months’ compensation.
The forced terminal leave was thus an act of compelling the petitioner to leave employment without justification, the court heard.
KTDA disputed that account. Group Director for Human Capital, Performance and Culture Charles Kireru said the board had acted under its human resource policy after reviewing the former CEO’s accumulated leave.
He said terminal leave was an accepted workplace practice and that Mr Mathiu continued receiving his full salary and related benefits.
KTDA also disputed that Mr Mathiu was denied access, saying security records showed no attempt to visit the office and be turned away. The agency said he retained the company vehicle and its fuel card while on leave.
Further, it said the driver was assigned to the CEO’s office, not Mr Mathiu personally. It said newspapers were attached to the office, not him. “No salary reduction, suspension, or penalty was imposed, as alleged,” the defendant said.
In its judgment dated September 30, 2026, the court accepted part of KTDA’s position. Justice Monica Mbaru said taking accrued annual leave before a fixed-term contract ended was lawful. It noted that he had applied for 20 days from December 22, 2025 to January 21, 2026, and KTDA approved it.
By January 16, he had 29.5 days remaining. The judge said failure to allocate those days could have resulted in encashment. ‘The option to take such earned leave was the most reasonable measure in view of the term contract,’ she said.
Drawing the line
But the court drew a line between being on leave and losing practical rights attached to employment. Although Mr Mathiu was away, his contract continued until April 20.
‘The only difference in this case was the respondent’s conduct of blocking the petitioner from his workplace systems and platforms while employment subsisted. Such action was unnecessary,” the judge said, finding that KTDA breached Mr Mathiu’s right to fair labour practices.
She added: ‘Locking out the petitioner from the workplace by replacing him in his role, recalling his driver, and deactivating the systems to deny him access was unjustified.’
The judge concluded that “it thus became an unfair labour practice to subject the petitioner to a hostile transition period, even where the process should have been smooth”.
The court did not find constructive dismissal because Mr Mathiu was on lawful terminal leave and had not resigned. The judge distinguished his circumstances from cases where employees resigned after employers created intolerable working conditions.
Sh1.9 million award
The court held that terminal leave did not end his contractual rights before that date. It awarded him one month’s salary of Sh1.9 million as general damages for the contractual breach. It also awarded Sh14,740 for the newspapers.
His claims for three months’ notice pay, accrued leave, 16 board sitting allowances, vehicle deductions and 12 months’ compensation were not granted. The court held that the employment had ultimately ended through expiry of the fixed-term contract.
The episode unfolded as KTDA prepared for a leadership change. The agency advertised the Group CEO position on January 19, 2026, three days after Mr Mathiu was placed on terminal leave.
KTDA is farmer-owned, with its shareholding historically structured around 54 tea factory companies and individual smallholder farmers. KTDA says its operations serve more than 600,000 smallholder farmers.