Ocholla & 4 others v Construction House Company (Employment and Labour Relations Cause E665 of 2022) [2025] KEELRC 1654 (KLR)
The bottom line
#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
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the termination of the claimants' employment amounts to wrongful and unlawful termination and therefore constructive dismissal
- 2.Whether the Respondent is in breach of its contractual obligations with regard to the claimants' contracts of employment
- 3.Whether the claimants are entitled to the prayers sought and the amounts claimed
- 4.Who should bear the costs of the suit
Key legal issues
#Whether the claimants were employees of the Respondent and whether their exit amounted to constructive/unfair termination
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.
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.
Whether the claimants were entitled to unpaid salary arrears and damages for unfair termination
Each claimant was awarded unpaid salary and allowances plus damages equivalent to six months' salary for unfair termination, subject to statutory deductions.
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.
Legal principles established
#- 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
#- 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
- 2.2nd 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
- 3.3rd 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
- 4.4th 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
- 5.5th 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.Respondent to pay costs of the suit plus interest at court rates from the date of judgment
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and labour relations jurisdiction (Employment Act; statement of claim for unlawful termination of employment)
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I do find that the claimants have established their case against the respondents for constructive termination and failure to pay salaries owing and other dues.
This indeed amounts to a constructive termination whereby the respondents fail to meet their part of the contract by not paying salaries as expected. This indeed qualifies as a constructive termination.
The respondents will pay cots of this suit pus interest at court rates with efiect from the date of this judgment.
Issues in the judgment
#The judgment is internally inconsistent on the identity and period of the 1st claimant: paragraph 11 states 'Jefi Nyamori Ochieng as the Technical Project Co-ordinator between October 2019 to June 2021; Brian Ouma Ocholla as the Head of Technical Department between September 2019 to September 2020', while paragraph 14 states 'the 1st Claimant worked with the Respondent for the period of one year as the Head of the Technical department until his unlawful termination in September 2020', and paragraph 25 states 'the 1st Claimant was unlawfully terminated, while the 5th Claimant does not know his position of employment'.
The judgment contains typographical errors in the costs order and elsewhere, e.g. 'cots of this suit pus interest' and 'sufier'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#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.