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ELRCPartially Allowed· [2023] KEELRC 2704 (KLR)

Muendo & 33 others v Quality Inspectors Limited (Employment and Labour Relations Cause 230 of 2018) [2023] KEELRC 2704 (KLR)

Employment and Labour Relations Court of Kenya
28 September 2023
OKOcharo Kebira
5,605 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered Quality Inspections company to pay 26 workers ten months of unpaid salaries, ruling that financial hardship is never an excuse for not paying wages.

What this practically means

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Executive summary

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Thirty-four claimants sued Quality Inspectors Limited for unpaid salary arrears of Kshs. 16,641,541.00 for the ten months between May 2017 and February 2018, contending their employment continued notwithstanding non-payment. The respondent denied the extent of the claims, asserting the claimants were hired only for a sub-contract from Zakhem International Construction Limited on the Kenya Pipeline Line 1 Replacement project, became redundant when that sub-contract was terminated around May 2017, and that it could only pay once the main contractor settled its indebtedness, which was the subject of ongoing arbitration. The court framed three issues: existence of the employment relationship, its continuity through the claimed period, and entitlement to relief. It found most claimants proved employment through NSSF slips, bank statements, letters of offer and contracts, which shifted the evidential burden to the respondent as keeper of employment records; eight claimants who produced only National IDs failed. The respondent's account of termination and redundancy was unsupported by any documentary evidence, and the court held the claimants remained employees. Payment of remuneration was held a statutory obligation not excused by financial hardship or the main contractor's default. Salary arrears were awarded at rates proved, with reductions for claimants whose documents contradicted their claims. Interest at court rates from judgment, costs against the respondent, and certificates of service within 30 days were ordered.

Key legal issues

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01

Whether the claimants proved the employment relationship

Holding

Most claimants proved employment through NSSF slips, bank statements or letters of offer; eight claimants who tendered only National IDs failed to discharge their legal burden

Reasoning

Some claimants produced letters of offer, contracts, NSSF slips and pay slips as proof of employment. Those documents shifted the evidential burden to the respondent, which as keeper of employment records produced nothing to rebut them. However, eight claimants produced only National IDs and, given the respondent's denial, could not prove employment. The court also found the respondent evasive and untruthful, noting claimants were employed before the January 2015 sub-contract it relied on.

p. 10
02

Whether the claimants remained employees from May 2017 to February 2018

Holding

The respondent failed to prove the alleged termination or redundancy, so the claimants remained employees during the period

Reasoning

The respondent alleged the claimants became redundant when the Zakhem sub-contract was terminated in May 2017, but produced none of the documents it said existed: the sub-contract, notice of termination, arbitration filings, or termination and redundancy notices. The court held it is not a court of speculation and, absent notices required under sections 35 and 40 of the Employment Act, found the claimants remained employees on a balance of probabilities.

p. 12
03

Whether the claimants were entitled to the salary arrears claimed

Holding

Payment of salary is a fundamental and statutory obligation; financial hardship is no defence; salary arrears awarded at rates proved, with reductions where documents contradicted claims

Reasoning

Relying on the Employment Act and authorities on remuneration as a fundamental term, the court held the statutory obligation to pay salaries cannot be excused by the main contractor's non-payment to the respondent. Salaries were assessed against each claimant's documents: most proved their claims, while the 12th, 16th, 21st and 30th claimants' awards were reduced to salaries shown in their own records.

p. 14

Legal principles established

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  • An employer's financial constraints do not justify failure to pay employee remuneration when it falls due
  • Failure to pay salary without justification is a repudiatory breach of the contract of service
  • Once an employee produces prima facie proof of employment, the evidential burden shifts to the employer, as keeper of employment records, to rebut it
  • Termination of employment or declaration of redundancy requires statutory notices under sections 35 and 40 of the Employment Act, which the employer must prove

Court orders

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  1. 1.Judgment entered that Quality Inspectors Limited pay the 1st, 2nd, 3rd, 4th, 5th, 7th, 8th, 9th, 10th, 12th, 13th, 14th, 16th, 17th, 18th, 19th, 20th, 21st, 24th, 25th, 27th, 28th, 30th, 31st, 32nd and 34th claimants outstanding salary arrears for May 2017 to February 2018 as tabulated
  2. 2.Interest on the awarded salary arrears at court rates from the date of judgment until payment in full
  3. 3.The respondent to bear the costs of the suit
  4. 4.The respondent to issue the claimants with a Certificate of Service within 30 days from the date of the judgment

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 30, 41(1), 41(2)(a) and (b), 28, 159(2)(d), 48
  • Employment Act, 2007Sections 2, 18, 18(2)(c), 35, 40, 51
  • Evidence ActSections 107, 109
  • Anti-Corruption and Economic Crimes Act, 2003Section 63
  • Universal Declaration of Human RightsArticle 23(3)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (6)

  • Kenya Union of Domestic Hotels Educational Institutions Hospitals and Allied Workers (KUDHEIHA Workers) v Garden Hotel Machakos
    [2018] eKLR
  • Kusow Billow Isaack v Ministry of Interior and Coordination of National Government & 3 others
    [2021] eKLR
  • Jonathan Spangler v Centre for African Family Studies
    [2017] eKLR
  • Benson Omuyonga v Laxmanhai Construction Ltd
    [2014]
  • Mutai v Kisa & another (Cause E002 of 2020)
    [2022] KEELRC 1543 (KLR) (25 May 2022)
  • Galgalo Jarso Jillo v Agricultural Finance Corporation
    [2021] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and the Constitution (articles 41, 28 and 30 invoked)

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, "Muendo & 33 others v Quality Inspectors Limited (Employment and Labour Relations Cause 230 of 2018) [2023] KEELRC 2704 (KLR)", Case Analysis (2023). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2704/eng@2023-09-28

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