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ELRCPartially AllowedAppeal E004 of 2026· [2026] KEELRC 2488 (KLR)

Swan Carriers Ltd v Otieno

Employment and Labour Relations Court
18 September 2026
JKJW Keli
6,390 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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A Kenyan court cut a worker's award from Kshs 388,125 to about Kshs 48,300, ruling wages are only owed for work actually done.

What this practically means

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Executive summary

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The Employment and Labour Relations Court at Machakos (JW Keli, J) determined an appeal by Swan Carriers Limited against the judgment of Hon. M. A. Nanzushi (SPM) in Mavoko MCELRC Cause No. E509 of 2023, which had partially allowed Philip Ouma Otieno's claim for withheld salary and awarded Kshs. 388,125 comprising one month's pay in lieu of notice, three months' compensation for unfair termination, and unpaid salaries, plus costs and interest. The appeal was canvassed by written submissions on six agreed issues. On jurisdiction, the court held that combining a tort claim with an employment claim was a procedural technicality that could not fault the trial court under section 20 of the ELRC Act. On limitation, the court held the claim was not time-barred under section 89 of the Employment Act because the employer, having asserted abscondment, failed to terminate the employment, leaving the cause of action open-ended; it is the employer's duty to bring the relationship to an end. On proof, the court found the respondent did not prove on a balance of probabilities that he returned to work after his 2018 arrest; the letter to the labour officer reporting abscondment was unrebutted documentary evidence which uncorroborated assertions could not dislodge. Following Akama v Kisii University, the award of Kshs. 169,400 as salary arrears for 14 months was set aside as contrary to section 17(1) of the Employment Act. However, the court upheld the finding of constructive dismissal, holding it flowed logically from undisputed facts even though not specifically pleaded, and upheld the notice and compensation awards under sections 49 and 50, varying them to reflect gross rather than net salary. The appeal was allowed partially; the judgment below was set aside and substituted with notice pay of Kshs. 12,075 and compensation of Kshs. 36,225, with costs and interest. Each party was ordered to bear its own costs of the appeal, and a 30-day stay was granted.

Key legal issues

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01

Jurisdiction after striking out of the tortious claim

Holding

Combining a tort claim with an employment claim is a procedural technicality which the court should not determine under section 20 of the ELRC Act; the trial court properly determined the employment claim on its merit

Reasoning

The court found the respondent had intertwined malicious prosecution with an employment claim, but section 20 of the Employment and Labour Relations Court Act directs courts not to determine cases on procedural technicalities. The grounds of appeal on this issue amounted to procedural technicalities, so no basis existed to fault the trial court.

p. 4
02

Limitation under Section 89 of the Employment Act

Holding

The claim was not time-barred because the employer failed to terminate the employment after asserting abscondment, leaving the cause of action open-ended

Reasoning

The arrest in July 2018 was not disputed, but the employer never terminated the employment despite asserting abscondment. It is the employer's duty to bring the relationship to an end; failing to do so under section 41 left the cause of action open, so the claim for salary arising from the date of arrest could not be said to be time-barred.

p. 6
03

Burden of proof on return to work and salary arrears

Holding

The respondent did not prove on a balance of probabilities that he returned to work after arrest; the documentary evidence of abscondment was unrebutted and the salary award was set aside

Reasoning

The trial court gave no weight to the letter to the labour officer reporting abscondment. The appellate court held documentary evidence cannot be dislodged by uncorroborated facts. The respondent did not know the guard's name, the date he was turned away, and produced no corroborating evidence, so the salary award of Kshs. 169,400 could not stand.

04

Unpleaded constructive dismissal and remedies

Holding

The trial court did not err in finding constructive dismissal and awarding remedies despite no specific prayer, as the facts disclosed unfair termination; remedies under section 49 follow automatically

Reasoning

Employment, lack of termination and stoppage of salary were all undisputed, supporting a finding of constructive dismissal. On finding unfair termination, the court's automatic duty is to consider remedies under section 49 pursuant to section 50. Notice pay was due under section 35 and 3 months' compensation was reasonable given long service.

p. 11
05

Gross vs net salary in compensation awards

Holding

Under section 49 of the Employment Act the applicable salary is gross salary; the awards of notice pay and compensation were varied to reflect gross salary

Reasoning

The payslip (P-exhibit 4) showed gross salary of Kshs. 12,075 while the respondent had pleaded net salary. Since section 49 applies gross monthly wage or salary, the court interfered with the awards of notice pay and compensation to reflect gross salary, per Mbogo v Shah on interference with discretionary decisions.

p. 12

Legal principles established

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  • It is the employer's duty to bring an employment relationship to an end; failure to terminate after asserting abscondment leaves the cause of action open-ended and defeats a limitation defence
  • An employer who does not render services is not entitled to wages; wages are payable only for work done under a contract of service
  • The weight of documentary evidence cannot be dislodged by uncorroborated facts
  • Even where an employee absconds, the employer must bring the employment to an end fairly and lawfully in compliance with section 41 of the Employment Act
  • A finding of constructive dismissal not specifically pleaded is not a new cause of action where it flows logically from the facts before the court

Court orders

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  1. 1.The appeal is allowed partially
  2. 2.The award of unpaid salary is set aside
  3. 3.The Judgment and Decree of the Hon. M. A. Nanzushi (SPM) delivered on 10th December 2025 in Mavoko MCELRC Cause No. E509 of 2023 is set aside and substituted with judgment for the claimant against the 1st defendant: notice pay of 1 month's salary Kshs. 12,075/-; 3 months' compensation for unlawful termination Kshs. 36,225/-; costs and interest
  4. 4.Each party to bear their own costs of the appeal
  5. 5.A stay of 30 days is granted

Authorities

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Legislation

  • Employment ActSection 89
  • Employment ActSection 17(1)
  • Employment ActSection 17(2)
  • Employment ActSection 35
  • Employment ActSection 41
  • Employment ActSection 47(5)
  • Employment ActSection 49
  • Employment ActSection 50
  • Evidence ActSection 107(1)
  • Evidence ActSection 109
  • Employment and Labour Relations Court ActSection 20

Cases cited (7)

  • Selle v Associated Motor Boat Co.
    [1968] EA 123

    First appellate court duty to reconsider and evaluate evidence and draw its own conclusions

  • Makanga v Gearbox Limited & 4 others
    (Employment and Labour Relations Cause E756 of 2023) [2026] KEELRC 755 (KLR)

    Constructive dismissal principles; employee blocked from workstation deemed entitled at work unless formally suspended (cited by respondent)

  • Coca Cola East & Central Africa Limited v Maria Kagai Ligaga
    [2015] KECA 394 (KLR)

    Employee constructively dismissed if he resigns because of employer's breach of contract (cited within Makanga quote)

  • Independent Electoral and Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others
    [2014] eKLR

    Parties are bound by their pleadings; court cannot determine unpleaded matters (cited by appellant)

  • Akama v Kisii University & 2 others
    [2025] KEELRC 109 (KLR)

    No wages payable where no services rendered; claim for salary till reinstatement declined

  • Ken freight (E.A) Limited v Benson K. Nguti
    SC Pet. No. 37 of 2018 [2019] eKLR

    Once termination found wrongful or unfair, the only question is the appropriate remedy under Section 49

  • Mbogo V Shah
    [1968] EA Page 93

    Appellate court will not interfere with exercise of discretion by an inferior court unless decision is clearly wrong

On appeal from
Chief Magistrates Court (Mavoko)
Mavoko MCELRC Cause No. E509 of 2023
Jurisdiction invoked
First appellate jurisdiction under the Employment and Labour Relations Court Act over appeals from the subordinate court in employment matters

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, "Swan Carriers Ltd v Otieno", Case Analysis (2026). Appeal E004 of 2026. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2488/eng@2026-09-18

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