Sowanane & 62 others v Mediheal Group Limited & 16 others; National Health Insurance Fund & 2 others (Garnishee) (Cause E006 of 2024) [2025] KEELRC 1726 (KLR)
The bottom line
#A Kenyan court ruled that months of unpaid salaries forced 63 hospital staff to resign and awarded them arrears, notice pay and damages.
What this practically means
#Executive summary
#Key legal issues
#Whether non-payment of salaries constituted constructive dismissal
Withholding salaries for months was an unfair labour practice which forced the Claimants to resign involuntarily, amounting to constructive termination
The court applied the principles in Coca Cola East Africa v Maria Kagai Ligaga that constructive dismissal requires conduct amounting to a fundamental or significant breach going to the root of the contract showing the employer no longer intends to be bound by essential terms. Failure to pay salaries constantly for several months goes to the root of the contract, leaving the employee vulnerable and embarrassed, and would push any employee to resign.
Liability of the Respondents despite not calling evidence
The Respondents' pleadings carried no weight as they adduced no evidence and filed no submissions; the Claimants proved their claim
The Respondents filed a response dated 10th July 2024 denying the claim but presented no witness and filed no submissions. Relying on Mutua v Buxton Hospital Mombasa Ltd, the court held that failure to call evidence leaves pleadings as mere unsubstantiated statements. The Claimants proved unpaid salary arrears through appointment letters and the Respondents' own correspondence promising payment.
Whether the dispute should have gone to arbitration
The Claimants attempted alternative dispute resolution through arbitration but the Respondents did not respond, and some contracts had no arbitration clause, so recourse to the court was proper
The Claimants requested appointment of an arbitrator by letter of 27th November 2023; the Respondents did not respond. CLARB attempted to appoint an arbitrator without success since some contracts lacked arbitration clauses. The court found the Claimants were willing to resolve the dispute through ADR but met resistance from the Respondents.
Legal principles established
#- An employer must pay the entire amount of wages earned by an employee for work done, in the currency of Kenya, and salaries are deemed due at the end of each month
- Failure to pay an employee's salary constantly for several months goes to the root of the employment contract and constitutes constructive dismissal
- A respondent who does not call evidence in proof of matters pleaded leaves the pleadings as mere unsubstantiated statements of fact
Court orders
#- 1.The Respondents are jointly and severally liable to pay the Claimants salary arrears amounting to Indian Rupees 186,069,164 as converted to Kenya shillings
- 2.The Respondents to pay salary of 3 months in lieu of notice amounting to Indian Rupees 33,615,000
- 3.The Respondents to pay 6 months' salary equivalent as general damages for unfair termination due to constructive dismissal, being Indian Rupees 62,680,000
- 4.Interest on court rates at 14% per annum from the date of judgment till full payment
- 5.Costs of the suit awarded to the Claimants
- 6.Certificates of service to be issued to the Claimants 30 days from the date of judgment
- Jurisdiction invoked
- Employment and labour relations jurisdiction of the Employment and Labour Relations Court; contracts of employment provided that Kenyan law would apply in case disputes arose
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sowanane & 62 others v Mediheal Group Limited & 16 others; National Health Insurance Fund & 2 others (Garnishee) (Cause E006 of 2024) [2025] KEELRC 1726 (KLR)", Case Analysis (2025). Cause No E006 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1726/eng@2025-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.