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ELRCPartially AllowedCause No 896 of 2014· [2018] KEELRC 186 (KLR)

Antony Ondara v Weidner East Africa Limited [2018] KEELRC 186 (KLR)

Employment and Labour Relations Court of Kenya
7 December 2018
827 words in judgment
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The bottom line

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A Kenyan employer who stops paying salaries without explanation or a payment plan forces a resignation that courts treat as unfair dismissal — and must pay compensation.

What this practically means

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Executive summary

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The claimant, employed as a technician from around April 2011 at a monthly salary of Kshs 15,200, resigned on 22nd May 2013 alleging constructive dismissal after the respondent stopped paying his salary, failed to pay promised commission and travelling expenses, and failed to remit NSSF and NHIF contributions. The respondent admitted the employment relationship but contended the claimant left abruptly without notice and counterclaimed one month's salary in lieu of notice. Its witness, a former director, admitted the claimant was owed three months' salary owing to cash-flow problems and that NSSF contributions were never remitted for that period, but denied entitlement to commission on the ground that the claimant was a technician, not a sales person. The court held that salary is an entitlement for work done, that prolonged non-payment places an employee in hardship, and that the employer was obliged to explain the financial difficulties, arrange payment of arrears, or lawfully terminate the contract. Having done none of these, the respondent's conduct amounted to constructive dismissal, hence unfair termination, defeating the counterclaim. Judgment was entered for the claimant for three months' salary arrears (Kshs 45,600) and seven months' salary (Kshs 106,400) as compensation for unfair termination, subject to statutory deductions, with costs of the suit. The claims for commission and bus fare were disallowed for want of evidence.

Key legal issues

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01

Whether non-payment of salary amounted to constructive dismissal constituting unfair termination

Holding

The respondent's failure to pay salary for three months, without explanation or arrangement, entitled the claimant to resign, which the court construed as constructive dismissal and unfair termination

Reasoning

The respondent admitted owing three months' salary due to cash-flow problems. The court held that failure to pay salary places an employee in hardship and that the employer was obliged to explain the financial difficulties, offer arrangements for payment of arrears, or at worst terminate the contract lawfully. Having furnished no such evidence, the respondent's conduct could only be construed as constructive dismissal, hence unfair termination of service. The counterclaim for notice pay failed accordingly.

p. 1
02

Whether the claims for commission and bus fare were proved

Holding

Disallowed for want of evidence

Reasoning

Although the claimant pleaded a 5% commission on sales and Kshs 500 per qualifying repair, in cross-examination he stated he had no document to show there were sales of Kshs 168,000. The respondent's witness denied entitlement to commission, stating the claimant was a technician and not a sales person, and that transport was provided for away jobs. The court found no evidence supported these heads and disallowed them.

p. 2

Legal principles established

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  • Salary is an entitlement for work done and failure to pay it for a prolonged period places the employee in hardship
  • An employer who fails to pay salary must explain the financial difficulties and arrangements for payment, or lawfully terminate the contract; failing that, the employee's resignation is constructive dismissal

Court orders

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  1. 1.Judgment against the respondent for three months' salary arrears of Kshs 45,600
  2. 2.Seven months' salary of Kshs 106,400 as compensation for unfair termination of service
  3. 3.Items (a) and (b) to be subject to statutory deductions
  4. 4.Costs of the suit to the claimant
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Antony Ondara v Weidner East Africa Limited [2018] KEELRC 186 (KLR)", Case Analysis (2018). Cause No 896 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/186/eng@2018-12-07

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.