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ELRCPartially AllowedCause No 496 of 2012· [2018] KEELRC 1226 (KLR)

Maryanne M. Kariuki & 9 others v Jonah Kitheka & another [2018] KEELRC 1226 (KLR)

Employment and Labour Relations Court
17 August 2018
MOMAUREEN ONYANGO
1,791 words in judgment
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The bottom line

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Kenya's Employment Court confirmed that failing to pay salaries amounts to constructive dismissal, but employees who walk out lose compensation and severance.

What this practically means

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Executive summary

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Ten claimants, former employees of the 2nd respondent, a non-governmental organisation running community feeding programs in Nairobi's informal settlements, sued the 2nd respondent and its Chief Executive Officer (the 1st respondent) claiming constructive dismissal through non-payment of salaries from 1st October 2011 to 29th February 2012. They sought 12 months' wages as compensation under Section 15(c) of the Labour Institutions Act, one month's pay in lieu of notice, prorata leave, severance pay, unpaid salaries, salaries to date, costs and any other relief. The respondents denied dismissal, asserting the claimants absconded and deserted their jobs from 2nd December 2011 after learning that donors had suspended funding, causing the project to collapse. The court framed two issues: whether the claimants deserted or were constructively dismissed, and their entitlement to remedies. Relying on the contract test in Western Excavating v Sharp and adopting the reasoning of Marete J in Joseph Aleper v Lodwar Water and Sanitation Company, the court held that non-payment of salaries for October and November 2011 was a significant breach going to the root of the contract and amounted to constructive dismissal, the claimants not being blameworthy for the financial crisis. Compensation of 12 months' wages was declined as the claimants' walk-out was a self-help resolution; severance pay and post-termination salaries were also refused. The court awarded salaries for October and November 2011, one month's pay in lieu of notice, prorata leave and costs, directing the claimants to tabulate amounts for confirmation and final judgment on a mention date.

Key legal issues

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01

Whether the claimants were constructively dismissed or deserted duty

Holding

The claimants were constructively dismissed by the respondents' failure to pay salaries for October and November 2011, which was a significant breach going to the root of the contract

Reasoning

The contracts provided for monthly payment of salaries in arrears. The respondents admitted that salaries for October and November 2011 were not paid. The claimants sent an email on 1st December 2011 stating it was impossible to run the program without pay and thereafter stopped reporting. Following the contract test in Western Excavating v Sharp and the adopted reasoning of Marete J in the Lodwar Water case, non-payment of salary is a significant breach going to the root of the contract, and the claimants could not be faulted for refusing to work unpaid.

p. 2
02

Whether the claimants were entitled to the remedies sought

Holding

Entitled to salaries for October and November 2011, one month's salary in lieu of notice and prorata leave, but not compensation, severance pay or post-termination salaries

Reasoning

The court found that the claimants' walk-out following non-payment was a self-help resolution, so compensation under Section 49(1)(c) was unavailable. Severance pay applies only to redundancy, which did not occur. Salaries after 1st December 2011 were refused because the claimants stopped working from that date. Notice pay and prorata leave followed from the finding of constructive dismissal.

p. 3

Legal principles established

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  • Non-payment of salary is a significant breach going to the root of the contract and amounts to constructive dismissal where the employee treats the contract as discharged
  • The employer bears the responsibility to pay salaries as and when they fall due, regardless of the employer's financial difficulties

Court orders

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  1. 1.Payment of salaries for October and November 2011
  2. 2.One month's salary in lieu of notice
  3. 3.Prorata leave
  4. 4.Costs of the suit to the claimants
  5. 5.Claimants to tabulate amounts due to each of them and forward tabulations to the respondents within 15 days from date of judgment; respondents to confirm the figures within 15 days of service
  6. 6.Case to be mentioned on a date to confirm amounts payable to each claimant and for final judgment

Authorities

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Legislation

  • Labour Institutions ActSection 15(c) (as cited by claimants in pleadings)
  • Employment ActSection 45; Section 49(1)(c)
  • Redundancy Payments Act 1965 (England)not specified
  • Trade Unions and Labour Relations Act, 1974 (England)not specified
  • Constitution of KenyaArticle 41

Cases cited (5)

  • JOSEPH ALEPER & ANOTHER -V- LODWAR WATER AND SANITATION COMPANY LIMITED
  • WESTERN EXCAVATING (ECC) LTD V SHARP
    [1978] ICR 221
  • Anthony Mkala Chitavi V Malindi Water & Sewerage Company Ltd
    Cause No. 64 of 2012
  • Emmanuel Mutisya Solomon V Agility Logistics
    Cause No. 1418 of 2011
  • Benuel Mariera V Awand Enterprises Limited
    Mombasa Cause No 191 of 2013
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Institutions Act (not expressly cited as a jurisdictional provision in the judgment)

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, "Maryanne M. Kariuki & 9 others v Jonah Kitheka & another [2018] KEELRC 1226 (KLR)", Case Analysis (2018). Cause No 496 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1226/eng@2018-08-17

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