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ELRCPartially AllowedCause No 231 of 2021· [2023] KEELRC 2496 (KLR)

Kiliru v Proctor & Allan (EA) Limited (Cause 231 of 2021) [2023] KEELRC 2496 (KLR)

Employment and Labour Relations Court
3 October 2023
2,545 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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An employer who stops paying an employee's salary for months commits constructive dismissal and must pay arrears, leave dues and compensation.

What this practically means

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Executive summary

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The Claimant, employed as a Plant Manager from 13th March 2017 on a consolidated monthly salary later increased to Kshs. 504,252/-, sued the Respondent for unlawful and unfair termination, constructive dismissal, unpaid salary for 14 months (August 2019 to October 2020), medical reimbursement, itemised payslips, accrued leave, travel allowance, notice pay, 12 months' compensation and pension. He resigned on 14th October 2020, alleging the continued non-payment of salary forced him out. The Respondent denied the salary increase, attributed the non-payment to COVID-19 measures, and alleged the Claimant absconded and unilaterally terminated his employment without the requisite three months' notice, offering only an ex-gratia payment. The court held that the Respondent's admitted failure to pay salary for 14 months constituted a repudiatory breach of the employment contract amounting to constructive dismissal. Leave dues were awarded because the Respondent, which kept leave records, failed to rebut the claim with records showing leave was taken. Pension claims were declined as a matter for another forum. Costs were denied to the Claimant because he did not issue a demand letter before filing suit. Judgment was entered for the Claimant for 14 months' salary of Kshs. 7,132,328/-, leave dues of Kshs. 407,561.60, compensation for termination set at 3 months' salary of Kshs. 1,528,356/-, interest at court rates from the date of judgment, and a certificate of service under section 51 of the Employment Act. The judgment was delivered at Nairobi on 3rd October 2023 by Nzioki wa Makau, Judge.

Key legal issues

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01

Whether the Claimant was constructively dismissed

Holding

Yes - the Respondent's admitted failure to pay salary for 14 months was a repudiatory breach constituting constructive dismissal

Reasoning

The court found the non-payment of salary for 14 months demonstrated a repudiatory breach creating grounds for constructive dismissal. The Respondent admitted non-payment, which was the gravamen of the claim. The causal link between the resignation and the breach was established on the evidence, including the P9 forms.

p. 4
02

Whether the Claimant was entitled to leave dues

Holding

Yes - the Respondent failed to rebut the claim with leave records

Reasoning

The Respondent kept records of leave forms but did not produce any evidence showing the Claimant took his leave. In the absence of rebuttal, the claim for 24 days' leave dues succeeded.

p. 5
03

Whether the Claimant was entitled to pension claims

Holding

No - pension is a matter for another forum

Reasoning

The court declined jurisdiction over the pension claim, holding it belongs to a different forum and would not be determined in this suit.

p. 5
04

Entitlement to costs

Holding

Claimant denied costs for failure to issue a demand letter

Reasoning

Although the Claimant succeeded substantively, the court disentitled him to costs because he never issued a demand letter to the Respondent before instituting the suit.

p. 5

Legal principles established

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  • Failure to pay an employee's salary constitutes a repudiatory breach entitling the employee to claim constructive dismissal
  • An employer alleging that an employee took leave must rebut the leave claim with records; failure to do so entitles the employee to leave dues

Court orders

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  1. 1.14 month's salary – Kshs. 7,132,328/-
  2. 2.Leave dues for 24 days – Kshs. 407,561.60
  3. 3.Compensation for the termination set at 3 months – 1,528,356/-
  4. 4.Interest at court rates on the sums above from the date of judgment till payment in full
  5. 5.Certificate of service in terms of section 51 of the Employment Act

Authorities

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Legislation

  • Employment Actsection 45
  • Employment Actsection 28(4)
  • Employment Actsection 51

Cases cited (5)

  • Coca Cola East & Central Africa Limited v Maria Kagai Ligaga
    [2015] eKLR
  • Milton M. Isanya v Aga Khan Hospital Kisumu
    [2017] eKLR
  • Peter Kaburu Karanja v Kirinyaga Construction (K) Limited
    [2020] eKLR
  • Mutai v Kisa & another
    (Cause E002 of 2020) [2022] KEELRC1543 (KLR) (25 May 2022)
  • Angela Gwiyo Kuria v Schenker Limited
    [2020] eKLR
Jurisdiction invoked
First-instance jurisdiction of the Employment and Labour Relations Court (not expressly invoked in the extract)

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, "Kiliru v Proctor & Allan (EA) Limited (Cause 231 of 2021) [2023] KEELRC 2496 (KLR)", Case Analysis (2023). Cause No 231 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2496/eng@2023-10-03

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