Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCAllowedNot stated in the judgment as provided (Statement of Claim dated 1st August 2022)

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
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

#

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

#
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.

Questions the Court framed

#

The issues the Court set itself to decide, in its own words.

  1. 1.Whether the termination of the claimants' employment amounts to wrongful and unlawful termination and therefore constructive dismissal
  2. 2.Whether the Respondent is in breach of its contractual obligations with regard to the claimants' contracts of employment
  3. 3.Whether the claimants are entitled to the prayers sought and the amounts claimed
  4. 4.Who should bear the costs of the suit

Key legal issues

#
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

#
  • 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. 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

The bench

#

One judgment of the whole court — no separate or dissenting opinions.

majority

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.
p. 4Liability for constructive termination
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.
p. 4Non-payment of salaries as constructive dismissal
The respondents will pay cots of this suit pus interest at court rates with efiect from the date of this judgment.
p. 5Final orders - costs and interest

Issues in the judgment

#
minor

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'.

minor

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.