https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1584

Otieno v Ouma t/a Top Notch Media (Cause E313 of 2023) [2026] KEELRC 1584 (KLR) (25 May 2026) (Judgment) Neutral citation: [2026] KEELRC 1584 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Cause E313 of 2023 ON Makau, J May 25, 2026 Between Polycap Omondi Otieno Claimant and Michael Omor Ouma T/A Top Notch Media Respondent Judgment 1.By a Statement of Claim dated 17th April 2023, the Claimant sued the Respondent for constructive dismissal and prayed for the following:a.A declaration that the resignation by the Claimant was as a result of constructive dismissal by the Respondent which was unfair.b.6 months' salary being damages for constructive dismissal from employment.c.Salary arrears totaling to Kshs. 900,000.d.1 month's salary in lieu of notice.e.Kshs. 135,000 being accumulated house allowance.f.Interest on (iii)-(v) above from February 2022 until payment in full.g.Costs of the suit.h.Any other such further relief be granted as the Honorable Court may deem fit and just to grant. 2.The Respondent was served with the pleadings but chose not to enter appearance or file a Reply to the Claim after being served with summons and pleadings. Consequently, the matter proceeded by way of formal proof. Evidence 3.The Claimant testified on 10th February 2026 as CW1 and adopted his written Statement dated 17th April 2023 and his further Statement dated 6th December 2024 as his evidence in chief. He also produced seven (7) documents as Exhibits 1 to 7 respectively. 4.In brief, the Claimant’s evidence was that on 1st February 2022, the Respondent employed him the Operations Manager in his company known as Top Notch Media. According to clause 1.2 of the employment contract, which the Claimant produced as Exhibit 1, his monthly salary was Kshs. 150,000, exclusive of house allowance, which he contended was in contravention of the law. 5.The Claimant contended that the Respondent continuously breached the terms of the contract by failing to pay his salary throughout his entire period of employment from 1st February 2022 to 31st July 2022, a period of six months, the Respondent failed to remit any salary to him whatsoever. As a result, the claimant was unable to meet his financial obligations and therefore suffered stress and mental anguish. 6.The Claimant further testified that during this period, he made several in-person inquiries to the Respondent asking when his salary would be released. He also sent emails to the Respondent, which he produced as Exhibits 2, 5, and 6. The Claimant stated that the Respondent never responded to any of his emails. The emails dated various dates show the Claimant persistently following up on his outstanding salary arrears, but the Respondent remained silent. 7.The Claimant testified that he continued to report to work and undertook his roles diligently as the Operations Manager from 1st February 2022 until July 2022 without any break or interruption in his service. He stated that he was forced to resign from employment because of the Respondent’s failure to settle the said outstanding salary arrears. He produced his resignation letter as Exhibit 4. 8.The Claimant stated that upon his resignation, he instructed Messrs M K Onsongo & Co. Advocates, to issue a demand letter dated 31st January 2023 to the Respondent, but again the Respondent ignored it. Hence this suit seeking the reliefs set out above. 9.After the hearing the Claimant filed his submissions dated 2nd March 2026 urging the court to enter judgment as prayed in his Statement Claim. Issues for Determination and analysis 10.Having considered the pleadings, evidence and the written submissions by the, the following issues fell for determination: -a.Whether the Claimant was constructively dismissed from employment by the Respondent.b.Whether the reliefs sought by the Claimant are merited. Constructive Dismissal 11.The Claimant contended that he was forced to resign from his employment because the Respondent had failed to pay his salary for the entire six months he worked, that is, from 1st February 2022 to 31st July 2022. The Claimant argued that the said conduct by the Respondent created intolerable working conditions and amounted to a fundamental breach of the employment contract, which forced him to resign. Therefore, he contended that the involuntary resignation amounted to constructive dismissal. 12.For emphasis, he relied on the decision in Western Excavating ECC Ltd v. Sharp [1978] 2WLR 344, which was cited with approval by Honourable Dr. Justice Jacob Gakeri in the case of Mukinda & another v Arrow Africa [2022] KEELRC 1131 (KLR) where Lord Denning held: -“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice.” 13.The uncontroverted pleadings and evidence by the Claimant is that the respondent employed him for a monthly salary of Kshs.150,000 but failed to pay him for six months. He submitted that the said conduct amount to a fundamental breach that went to the very foundation of the employment relationship and it undermined the substratum of the employment agreement. Consequently, he contended that it was untenable for him to continue in service. 14.I have carefully considered the evidence on record. The Claimant was lawfully engaged by the Respondent under a contract signed on 25th January 2022. The employment contract produced as Exhibit 1 clearly sets out at clause 1.2 that the Claimant was entitled to a salary of Kshs. 150,000, exclusive of allowances. There is uncontroverted evidence that the Claimant rendered services continuously for a period of six months from 1st February 2022 to 31st July 2022 and no salary was paid to him under the said contract of service. 15.There is further evidence the claimant made follow ups and demands before and after resignation, but the Respondent failed to remit any salary to the Claimant whatsoever, and he never responded to any of these inquiries. 16.Payment of wages is undoubtedly at the core obligation of any employer and the very foundation upon which the employment relationship is built. An employee works in exchange for wages, and an employer who fails to pay wages for six consecutive months has fundamentally breached the employment contract. The Respondent's sustained failure to honour this obligation demonstrated that the Respondent no longer intended to be bound by one or more of the essential terms of the contract, specifically the term requiring payment of monthly salary. 17.Such conduct created intolerable working conditions for the Claimant, and also amounted to repudiatory breach of his contract of service. The Respondent's conduct effectively undermined the substratum of the employment agreement and made it untenable for the Claimant to continue in service. Consequently, I find that the resignation amounted to constructive dismissal because it was not voluntarily done. 18.In view of the foregoing conclusion, I further find that the claimant was entitled to resign and sue for constructive termination since he was forced to do so by the Respondent's the repudiatory breach of his contract of service. I adopt the decision of the English case of Western Excavating ECC Ltd v. Sharp [1978] because legal principle enunciated therein aligns with the facts of the instant case. Reliefs sought 19.The Claimant prayed for salary arrears totaling Kshs. 900,000 for the six months he worked from February 2022 to July 2022 at the rate of Kshs. 150,000 per month as per clause 1.2 of the employment contract (Exhibit 1). The calculation is correct and therefore, I award him the sum Kshs. 900,000 as prayed. 20.The Claimant correctly, submitted that the Respondent's failure to pay his salary was contrary to Sections 17 and 18 of the Employment Act. He also correctly submitted that Section 25 of the Employment Act, creates a criminal offence for failure by an employer to pay salary when it falls due to an employee. 21.I agree with the decision in Jason Mogaka Otiso v. Shadrack Obuga Mukanda [2016] KEELRC 1242 (KLR), where Mbaru Jstated as follows -“29.Wages are a legal entitlement. Such is regulated under section 18 of the Employment Act...30.Why this provisions above are relevant to state is because of the penalty attached to it at section 25 of the Employment Act thus; 25. (1) Without prejudice to any other liability for a breach of the provisions of this Part, an employer who contravenes the provisions of this Part commits an offence and shall on conviction be liable to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding two years or to both and shall be required to repay any remuneration wrongfully withheld or wrongfully deducted from the employee.” 22.Having taken into account the unrebutted evidence on record, I am satisfied that the Claimant has proved his claim for unpaid salary arrears on a balance of probabilities. Accordingly, I award him Kshs. 900,000 being salary arrears for six months from February 2022 to July 2022. 23.The Claimant further prayed for Kshs. 135,000 being accumulated house allowance. He contended that the Respondent did not provide him with housing and there prayed for house allowance calculated at the rate of 15% of his monthly salary for six months. He invoked Section 31 of the Employment Act, which provides as follows: -“(1)An employer shall at all times, at his own expense, provide reasonable housing accommodation for each of his employees either at or near to the place of employment, or shall pay to the employee such sufficient sum, as rent, in addition to the wages or salary of the employee, as will enable the employee to obtain reasonable accommodation.(2)This section shall not apply to an employee whose contract of service—(a)contains a provision which consolidates as part of the basic wage or salary of the employee, an element intended to be used by the employee as rent or which is otherwise intended to enable the employee to provide himself with housing accommodation; or(b)is the subject matter of or is otherwise covered by a collective agreement which provides consolidation of wages as provided in paragraph (a).” 24.In support of this claim, the Claimant relied on the persuasive decision of Marambe v. For You Chinese Restaurant [2021] KEELRC 2425 (KLR) , where Lady Justice C. Baari held thus:-“45.Payment of a house allowance is a Statutory requirement and one that is couched in mandatory terms. Employers are bound by Section 31(1) of the Employment Act, 2007, to either provide an employee reasonable housing accommodation or pay the employee sufficient housing allowance as rent in addition to the basic salary.” 25.The Claimant also relied on Hirkena Athonto Elemo v. Jiangxi Zhongmei Engineering Construction Company Limited [2019] eKLR , where the court issued an award for house allowance in similar circumstances where the employer had not provided housing accommodation and the salary was not consolidated to include house allowance. 26.I have examined the employment contract produced as Exhibit 1. Clause 1.2 of the contract of employment he produced, is clear that he was entitled to a gross monthly salary of Kshs. 150,000, exclusive of mileage and airtime. Consequently, I find that the Claimant is not entitled to house allowance for the six months he worked, from February 2022 to July 2022. 27.In view of the above conclusion that the claimant was constructively dismissed, I find that he is entitled to one month's salary in lieu of notice by dint of Section 35(5) of the Employment Act. Consequently, I award the Claimant Kshs. 150,000 as one month's salary in lieu of notice. 28.The Claimant prayed for six months' salary being damages for constructive dismissal from employment because it amounts to unfair termination. I agree that the dismissal was unfair and the Claimant is entitled to compensation under section 49 of the Act. However, considering his short period of service of only six months, and the fact that he did not cause the termination through misconduct, I award him one-month salary as compensation for the unfair termination being Kshs. 150,000. Conclusion 29.I have found that the Claimant was constructively dismissed by the Respondent which amounted to unfair termination within the meaning of the Employment Act. I have further found that the Claimant is entitled to some of the reliefs sought in his Statement of Claim dated 17th April 2023. Consequently, I enter judgment for the Claimant against the Respondent as follows: -i.Salary arrears (6 months)..............Kshs. 900,000/-ii.Notice (1 month).....................Kshs. 150,000/-iii.Compensation for (1 months)............Kshs. 150,000/-Total.....................Kshs. 1,200,000/- 30.The award is subject to statutory deductions as provided by law. 31.The Claimant is awarded costs of the suit and interest at court rates from the date of this judgment. DATED, SIGNED AND DELIVERED VIRTUALLY IN OPEN COURT AT NAIROBI THIS 25TH DAY OF MAY, 2026.ONESMUS MAKAUJUDGEAppearance:Anyallai for Onsongo for ClaimantNo appearance for Respondent