Peter Kaburu Karanja v Kirinyaga Construction (K) Limited [2020] KEELRC 787 (KLR)
The bottom line
#A Kenyan court ruled that failing to pay a worker's salary for nine months forced his resignation, entitling him to over Kshs.2.1 million.
What this practically means
#Executive summary
#Key legal issues
#Limitation of time under section 90 of the Employment Act
The claim was filed within the three-year limitation period since the cause of action arose when the resignation took effect at the end of April 2016
Section 90 requires claims to be commenced within three years of the act complained of. In constructive dismissal, the cause of action arises when the resignation becomes effective, i.e. end of April 2016 after the one-month notice. The claim filed on 8th February 2019 was therefore within time.
Whether non-payment of salary amounted to constructive dismissal
Failure to pay salary for a cumulative nine months was a fundamental breach amounting to constructive dismissal
Applying the Coca Cola v Ligaga principles, the Court found a repudiatory breach going to the root of the contract: nine months' unpaid salary, including three consecutive months before resignation, as evidenced by bank statements and the resignation letter itself. The Respondent adduced no evidence, leaving the claim uncontroverted.
Entitlement to reliefs
Salary arrears, underpayments and six months' compensation awarded; service pay declined for lack of proof of basis
The Claimant proved nine months' salary arrears, less Kshs.300,000.00 paid post-resignation, and underpayments of Kshs.5,620.00. Compensation was fixed at six months under section 49(4) of the Employment Act considering the 19 months of service, lack of service pay or pension, and the financial embarrassment suffered. Service pay was declined for want of NSSF statements.
Legal principles established
#- Failure by an employer to pay salary for a cumulative period of nine months constitutes a fundamental/repudiatory breach amounting to constructive dismissal
- Where a respondent does not file a response, the allegations pleaded in the claim remain uncontroverted
- In a constructive dismissal claim, the cause of action arises when the resignation becomes effective, which is the date from which limitation under section 90 runs
Court orders
#- 1.Declaration that the Claimant's resignation amounted to constructive dismissal
- 2.Unpaid salary for 9 months of Kshs.1,440,000.00
- 3.Salary underpayments of Kshs.5,600.00
- 4.6 months' salary as compensation for constructive dismissal of Kshs.960,000.00
- 5.Total of Kshs.2,405,620.00 less Kshs.300,000.00 paid, leaving Kshs.2,105,620.00 due
- 6.Respondent to issue a certificate of service in line with Section 51(2) of the Employment Act
- 7.Respondent to issue itemised pay statements for the work paid
- 8.Costs to the Claimant
- 9.Interest at court rates from date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (not expressly cited in judgment); claim under the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Peter Kaburu Karanja v Kirinyaga Construction (K) Limited [2020] KEELRC 787 (KLR)", Case Analysis (2020). Cause No 81 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/787/eng@2020-06-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.