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ELRCAllowedNot stated in the judgment as provided (Statement of Claim dated 1st August 2022)· [2025] KEELRC 1654 (KLR)

Ocholla & 4 others v Construction House Company (Employment and Labour Relations Cause E665 of 2022) [2025] KEELRC 1654 (KLR)

Employment and Labour Relations Court
4 June 2025
HWHellen Wasilwa
1,799 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan court held that failing to pay employees' salaries can itself amount to unfair termination, awarding five workers millions in damages.

What this practically means

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Executive summary

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Five claimants sued the Respondent by a Statement of Claim dated 1st August 2022, seeking damages for unlawful termination of employment (or forced resignation), costs and interest. They alleged terminations without due process and resignations caused by non-payment of salaries and non-provision of resources, i.e. constructive dismissal. The Respondent had earlier filed a Notice of Preliminary Objection dated 7th November 2022, on which a ruling was delivered on 9th February 2024, and denied having any employment relationship with the claimants. Five claimants testified and adopted their witness statements and documents. In submissions the claimants framed four issues: whether the terminations were unlawful and constituted constructive dismissal; breach of contract; entitlement to the amounts claimed; and costs. The court found that the Respondent had denied the employment relationship but produced no evidence that the claimants were independent contractors; the contracts produced showed the claimants were employees who left for non-payment of salaries, which amounted to constructive termination. The court held the claim had been established for constructive termination and failure to pay salaries and other dues. It awarded each of the five claimants unpaid salary and allowances plus damages equivalent to six months' salary for unfair termination, all subject to statutory deductions: 1st claimant Kshs 936,399; 2nd Kshs 489,000; 3rd Kshs 544,000; 4th Kshs 577,000; 5th Kshs 769,000. The Respondent was ordered to pay costs of the suit plus interest at court rates from the date of judgment, delivered virtually at Nairobi on 4th June 2025 by Hellen Wasilwa, Judge.

Key legal issues

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01

Whether the claimants were employees of the Respondent and whether their exit amounted to constructive/unfair termination

Holding

The court found the claimants were employees and that their resignation or termination due to non-payment of salaries constituted constructive termination for which the Respondent is liable.

Reasoning

The Respondent denied any employment relationship but produced no evidence that the claimants were independent contractors. The contracts produced showed the claimants were employees who left employment for non-payment of salaries. Non-payment of salaries was a failure by the employer to meet its contractual obligations, qualifying as constructive termination.

p. 4
02

Whether the claimants were entitled to unpaid salary arrears and damages for unfair termination

Holding

Each claimant was awarded unpaid salary and allowances plus damages equivalent to six months' salary for unfair termination, subject to statutory deductions.

Reasoning

Having found constructive/unfair termination, the court awarded each claimant specific sums for unpaid salary and allowances as claimed, and six months' salary as damages for unfair termination, applying the quantum set out in the dispositive orders.

p. 4

Legal principles established

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  • Where an employer fails to pay salaries as expected and frustrates the employee, the resulting exit amounts to constructive termination by the employer.

Court orders

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  1. 1.1st claimant awarded unpaid salary and allowances of Kshs 600,999 plus damages of 6 months' salary for unfair termination (Kshs 335,400), total Kshs 936,399 less statutory deductions
  2. 2.2nd claimant awarded unpaid salary and allowances of Kshs 177,000 plus damages equivalent to 6 months' salary for unfair termination (Kshs 312,000), total Kshs 489,000 less statutory deductions
  3. 3.3rd claimant awarded unpaid salary and allowances of Kshs 250,000 plus damages equivalent to 6 months' salary (Kshs 294,000), total Kshs 544,000 less statutory deductions
  4. 4.4th claimant awarded unpaid salary and allowances of Kshs 241,000 plus damages of 6 months' salary for unfair termination (Kshs 336,000), total Kshs 577,000 less statutory deductions
  5. 5.5th claimant awarded unpaid salary and allowances of Kshs 517,000 plus damages equivalent to 6 months' salary for unfair termination (Kshs 252,000), total Kshs 769,000 less statutory deductions
  6. 6.Respondent to pay costs of the suit plus interest at court rates from the date of judgment
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act; statement of claim for unlawful termination of employment)

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, "Ocholla & 4 others v Construction House Company (Employment and Labour Relations Cause E665 of 2022) [2025] KEELRC 1654 (KLR)", Case Analysis (2025). Not stated in the judgment as provided (Statement of Claim dated 1st August 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1654/eng@2025-06-04

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