Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedNot stated in the excerpt (Memorandum of Appeal dated 30th July 2024)· [2025] KEELRC 992 (KLR)

Lokamiti & 4 others v Olsuswa Farm Limited (Appeal E058 of 2024) [2025] KEELRC 992 (KLR)

Employment and Labour Relations Court
28 March 2025
2,411 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled that failing to pay workers' salaries for months is constructive dismissal, entitling them to damages and arrears.

What this practically means

#

Executive summary

#
This is a first-instance appellate judgment of the Employment and Labour Relations Court at Nakuru (James Rika, J) on appeal from the Chief Magistrate's Court at Naivasha. Six former employees of the Respondent - two security guards, a tractor driver, an electrician, a cook and a general worker - had claimed Kshs. 1,704,811 for unfair, unlawful and constructive dismissal and terminal benefits. The Trial Court upheld only the 1st Appellant's claim for unfair dismissal, awarding notice, 12 months' compensation, annual leave and half costs, and dismissed the 2nd to 6th Appellants' constructive dismissal claims. On appeal, the Court held the Trial Court erred in finding the 2nd to 6th Appellants resigned voluntarily: witness statements and oral evidence established they resigned because salaries went unpaid for up to five months, a breach of the most fundamental term of the contract. Relying on Coca Cola East Africa Limited v. Maria Kagai Ligaga, Deya v. Safaricom and Western Excavating ECC v. Sharp, the Court declared the 2nd to 6th Appellants constructively dismissed. The Trial Court's introduction of 'tough economic times' - never pleaded or proved, the Respondent having called no witness - was condemned as error. Salary arrears were awarded as pleaded. Overtime and holiday pay claims failed for want of evidence, but underpayment claims succeeded, the cause of action renewing with each underpaid cheque. The 1st Appellant's award was upheld with underpayment and arrears added. Each Appellant received 12 months' salary as damages for constructive dismissal plus arrears and, where proved, underpayment. Costs of the appeal were awarded to the Appellants.

Key legal issues

#
01

Constructive dismissal of the 2nd to 6th Appellants

Holding

They were constructively dismissed because the Respondent withheld salaries for up to 5 months, breaching a fundamental term of the contract

Reasoning

The Trial Court misread the evidence: although resignation letters cited personal reasons, witness statements and oral evidence clarified that the resignations were due to non-payment of salaries for up to five months. Salary is the most fundamental term of employment; its withholding amounts to repudiation. The Trial Court also wrongly introduced the Respondent's 'tough economic times' as a justification no party had pleaded or proved, the Respondent having adduced no evidence at all.

p. 4
02

Entitlement to salary arrears

Holding

The prayer for arrears was granted as pleaded, since the Respondent produced no evidence of payment

Reasoning

The Respondent called no witness and produced no payrolls, pay statements or bank transfers showing payment. Having resigned precisely because salaries went unpaid, the Appellants could not be denied the arrears; the Trial Court had itself accepted the salaries were in arrears yet declined the prayer inconsistently.

p. 5
03

Whether overtime, holiday pay and underpayment claims were time-barred under section 90

Holding

Not time-barred; underpayment in particular renews the cause of action with each underpaid payment, but overtime and holiday pay claims failed for want of evidence

Reasoning

If the main claim was not time-barred under section 90, no component of the contractual claim could be severed and subjected to a separate limitation rule. Underpayment is a continuing statutory violation and discrimination. However, the Appellants gave no specific evidence of working on holidays or excess hours, so those heads failed on proof, not limitation.

p. 5

Legal principles established

#
  • Salary is a fundamental term of the contract of employment; withholding it entitles the employee to treat the contract as constructively terminated
  • Sections 17 and 18 of the Employment Act require salaries to be paid when due, with no obligation on the employee to demand payment
  • A persistently delayed or unpaid salary constitutes a hostile work environment bordering on slavery and servitude
  • Underpayment is a statutory violation and discrimination, renewed with every underpaid cheque, so it is not separately time-barred from the main claim under section 90

Court orders

#
  1. 1.Appeal allowed under Grounds [a], [b], [c], [d], [e] and in part, Grounds [f] and [g] of the Memorandum of Appeal
  2. 2.Declaration that the 2nd to 6th Appellants were constructively dismissed by the Respondent
  3. 3.1st Appellant's Trial Court award of notice, annual leave and compensation upheld; Respondent to pay him underpayment of Kshs. 21,651 and salary arrears of Kshs. 31,117
  4. 4.Respondent to pay 2nd Appellant Kshs. 145,824 damages for constructive dismissal, Kshs. 122,507 underpayment and Kshs. 60,761 arrears
  5. 5.Respondent to pay 3rd Appellant Kshs. 102,456 damages for constructive dismissal, Kshs. 22,482 underpayment and Kshs. 42,960 arrears
  6. 6.Respondent to pay 4th Appellant Kshs. 120,000 damages for constructive dismissal and Kshs. 50,000 arrears
  7. 7.Respondent to pay 5th Appellant Kshs. 92,268 damages for constructive dismissal, Kshs. 3,188 underpayment and Kshs. 30,759 arrears
  8. 8.Respondent to pay 6th Appellant Kshs. 87,600 damages for constructive dismissal and Kshs. 36,500 arrears
  9. 9.Costs of the Appeal to be borne by the Respondent
On appeal from
Chief Magistrate's Court Naivasha
Not stated
Jurisdiction invoked
Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the Chief Magistrate's Court ( Employment Act, 2007 ); statutory basis not expressly quoted in the judgment

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Lokamiti & 4 others v Olsuswa Farm Limited (Appeal E058 of 2024) [2025] KEELRC 992 (KLR)", Case Analysis (2025). Not stated in the excerpt (Memorandum of Appeal dated 30th July 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/992/eng@2025-03-28

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