Heaves International Ltd v Nyamai (Appeal E151 of 2023) [2025] KEELRC 2564 (KLR)
The bottom line
#Kenya's Employment Court confirmed that unpaid salaries amount to constructive dismissal, but reduced the employee's compensation and arrears award.
What this practically means
#Executive summary
#Key legal issues
#Whether the respondent's resignation amounted to constructive dismissal
The appeal on this ground fails; the trial court correctly found constructive dismissal from non-payment of salary
The court re-evaluated the evidence and found the appellant's own witness admitted non-payment of salary (Kshs. 30,000 arrears at resignation). Applying the principles in Coca Cola East and Central Africa Ltd v Maria Kagai Ligaga, non-payment of salary when due amounts to repudiation of a fundamental term going to the root of the contract, establishing repudiatory breach and causation. The trial court's finding of constructive dismissal was therefore upheld.
Whether the trial court erred in awarding 12 months' salary as compensation
The maximum award of 12 months' salary was excessive; substituted with 6 months' salary (Kshs. 90,000)
Under section 49(4) of the Employment Act the court must consider factors including length of service, employee conduct, and mitigation. The respondent served under 2 years, had a record of performance complaints, and had since secured another job, mitigating her losses. The trial court's 'casual' assessment without applying these factors rendered the maximum award excessive.
Whether the trial court erred in awarding unpaid salary of Kshs. 45,000
The award is set aside and substituted with Kshs. 30,000
An email dated 10th August 2021 from the respondent demanded unpaid outstanding salary of Kshs. 30,000, and the appellant's witness, Michael Njenga, testified during re-examination that the claimant was owed Kshs. 30,000. The evidence therefore established arrears of 30,000 and not 45,000.
Legal principles established
#- A first appellate court is not bound by the findings of fact of the court below and must reconsider and evaluate the evidence itself, making allowance for the fact that it did not see or hear the witnesses
- Payment of salary is at the core of the employment contract and non-payment of salary when due amounts to repudiation of the contract capable of founding constructive dismissal
- Upon finding unfair termination, the court must consider remedies under section 49 of the Employment Act, compensation being capped at 12 months' gross salary, guided by the factors under section 49(4)
- A first appellate court will not interfere with the exercise of discretion by an inferior court unless satisfied the decision is clearly wrong
Court orders
#- 1.The appeal is allowed with respect to the reliefs only
- 2.The Judgment and Decree of the Hon. C.M. Njagi (PM) delivered on 1st August, 2023 in MCELRC E1987/2021 is set aside and substituted
- 3.Judgment is entered for the claimant against the respondent that the claimant is held to have been unfairly dismissed from employment
- 4.Compensation for unfair termination equivalent of 6 months gross salary Kshs. 90,000
- 5.Unpaid salary Kshs. 30,000
- 6.Total sum of Kshs. 120,000 plus costs of the suit awarded with interest at court rates from date of judgment
- 7.Each party to bear own costs in the appeal
- On appeal from
- Magistrates' Court (ELRC), Nairobi
- MCELRC E1987/2021
- Jurisdiction invoked
- First appellate jurisdiction over judgment of the Magistrates' Court in an employment and labour relations matter
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Heaves International Ltd v Nyamai (Appeal E151 of 2023) [2025] KEELRC 2564 (KLR)", Case Analysis (2025). MCELRC E1987/2021 Appeal. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2564/eng@2025-09-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.