Sifa Investment Limited v Mutuku (Appeal E222 of 2024) [2025] KEELRC 1231 (KLR)
The bottom line
#An employer who fails to pay salaries cannot discipline an employee for refusing to work until wages are owed are settled — that refusal is protected.
What this practically means
#Executive summary
#Key legal issues
#Unfair termination and employee dignity
Termination was unfair; the employee's refusal to work was caused by non-payment of his June salary, a fundamental breach by the employer
The show-cause notice itself acknowledged no staff had been paid June salary. The apology was contextualised as distress from unpaid rent caused by unpaid wages. Non-payment of due wages fundamentally repudiates the contract under section 44(3) of the Employment Act and violates constitutional rights to dignity, freedom from servitude and fair labour practices under Articles 28, 30 and 41. The employer bears responsibility for the breach, so the termination could not be justified.
12 months' compensation and notice pay
Both justified given the constitutional and statutory breaches
The court held the award of 12 months' compensation justified in the context of the underlying violations, and notice pay due because the employer breached the employment relationship by failing to pay wages without notice. Compensation computed at 36,000 x 12 = 432,000, and notice pay at Ksh 36,000.
Service pay with NSSF remittance
Not due where NSSF is remitted
Service pay under section 35(6) of the Employment Act arises only where there is no compliance with statutory dues. Where the employer remits NSSF, service pay is not payable unless separately provided as a benefit under a written contract, private treaty or CBA.
Costs under section 12(4) ELRC Act
Trial costs justified but must be based, and run from the date of judgment, not from filing of suit
The court found the claim well-founded so trial costs were justified, but section 12(4) of the Employment and Labour Relations Court Act requires the allocation of costs to be given a basis, which was lacking. Costs from the date of claim filing were not applicable; costs should run from the date of judgment with interest if unpaid upon assessment.
Legal principles established
#- Non-payment of due wages is a fundamental breach of the employment contract that damages the employment relationship and violates employee dignity
- An employer cannot rely on an employee's apology for refusing work where the root cause was the employer's own non-payment of wages
- Service pay is not due where the employer remits NSSF contributions, unless separately provided in the contract or a CBA
- Claims for public holidays and overtime must be particularised for assessment
Court orders
#- 1.Finding that there was unfair termination of employment
- 2.Compensation Ksh 432,000
- 3.Notice pay Ksh 36,000
- 4.Costs for the trial court proceedings
- 5.For the appeal, each party bears its own costs
- 6.Review of the judgment in Mombasa CMELRC No. 447 of 2018 in the above terms
- On appeal from
- Employment and Labour Relations Court (Mombasa, magistrates' level)
- Mombasa CMELRC No. 447 of 2018
- Jurisdiction invoked
- First appellate jurisdiction over the trial court's judgment (appellant sought review/setting aside of the judgment of 30 September 2024)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sifa Investment Limited v Mutuku (Appeal E222 of 2024) [2025] KEELRC 1231 (KLR)", Case Analysis (2025). Mombasa CMELRC No. 447 of 2018 (appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1231/eng@2025-04-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.