Lokamiti & 4 others v Olsuswa Farm Limited (Appeal E058 of 2024) [2025] KEELRC 992 (KLR)
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
#Key legal issues
#Constructive dismissal of the 2nd to 6th Appellants
They were constructively dismissed because the Respondent withheld salaries for up to 5 months, breaching a fundamental term of the contract
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.
Entitlement to salary arrears
The prayer for arrears was granted as pleaded, since the Respondent produced no evidence of payment
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.
Whether overtime, holiday pay and underpayment claims were time-barred under section 90
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
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.
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.Appeal allowed under Grounds [a], [b], [c], [d], [e] and in part, Grounds [f] and [g] of the Memorandum of Appeal
- 2.Declaration that the 2nd to 6th Appellants were constructively dismissed by the Respondent
- 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.Respondent to pay 2nd Appellant Kshs. 145,824 damages for constructive dismissal, Kshs. 122,507 underpayment and Kshs. 60,761 arrears
- 5.Respondent to pay 3rd Appellant Kshs. 102,456 damages for constructive dismissal, Kshs. 22,482 underpayment and Kshs. 42,960 arrears
- 6.Respondent to pay 4th Appellant Kshs. 120,000 damages for constructive dismissal and Kshs. 50,000 arrears
- 7.Respondent to pay 5th Appellant Kshs. 92,268 damages for constructive dismissal, Kshs. 3,188 underpayment and Kshs. 30,759 arrears
- 8.Respondent to pay 6th Appellant Kshs. 87,600 damages for constructive dismissal and Kshs. 36,500 arrears
- 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.