https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1710

Pride King Services Ltd v Onyango (Appeal E007 of 2026) [2026] KEELRC 1710 (KLR) (23 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1710 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Kisumu Appeal E007 of 2026 Nzioki wa Makau, J June 23, 2026 Between Pride King Services Ltd Appellant and Innocent Onyango Respondent (Being an Appeal against the judgment and decree of Hon. L. D. Ogombe SRM in the Kisumu MC. ELRC No. E005 of 2024 delivered on the 23rd December 2026) Judgment 1.The dispute giving rise to this appeal originated before the Magistrate’s Court at Kisumu, where Innocent Onyango (the Respondent) instituted a claim against Pride Kings Ltd (the Appellant) through a Memorandum of Claim dated 15th January 2024 seeking the following reliefs:i.Terminal and contractual dues amounting to Kshs. 633,411.78 broken down as: Kshs. 16,959/- one months’ salary in lieu of notice, Kshs. 67,836/- unpaid salary for July-October 2023, Kshs. 135,035/- in underpayments between 2019 and 2023, Kshs. 121,834/- in unpaid house allowance between 2019 and 2023, Kshs. 49,114.13 in unpaid leave days between 2020 and 2023, Kshs. 39,135.60 in 4 years’ service pay and Kshs. 203,508/- in 12 months’ compensation for unlawful termination of employment;ii.A declaration that the termination of his employment was unfair, unjust and wrongful;iii.Issuance of a certificate of service;iv.Costs and interest at court rates; andv.Any other relief the court deemed fit to grant. 2.The Respondent’s case was that he was employed by the Appellant in or about August 2019 as a security guard at a monthly salary of Kshs. 12,500/-. He contended that he diligently served the Appellant until 30th October 2023 when he was compelled to resign due to the Appellant’s failure to pay his salary for four consecutive months, namely July to October 2023. According to the Respondent, the prolonged non-payment of wages rendered it impossible for him to provide for his wife and three children, thereby leaving him with no option but to resign. He further asserted that the salary stoppage was effected without prior notice or any communication as to when payment would be made. In addition, he alleged that throughout his employment he worked twelve-hour night shifts from 6.00p.m. to 6.00a.m. without overtime compensation, was consistently underpaid, and that deductions made towards NSSF were never remitted. On the basis of those circumstances, he maintained that he had been constructively dismissed in violation of sections 17, 35, 43, 45 and 46 of the Employment Act. 3.The Appellant opposed the claim through a Response to the Memorandum of Claim dated 6th June 2024. While admitting that the Respondent had been employed at a monthly salary of Kshs. 12,500/-, it denied the remainder of the averments and put the Respondent to strict proof thereof. The Appellant stated that it had experienced financial difficulties which affected its ability to pay salaries for a period of three months. It further averred that employees, including the Respondent, had been notified of the situation and that the outstanding salaries were subsequently paid. Despite this, it averred that the Respondent elected to resign instead of waiting for the situation to stabilize. 4.Upon considering the evidence presented by the parties, the Trial Magistrate, in a judgment delivered on 9th December 2025, found that the Respondent had been constructively dismissed. Consequently, the Trial Court awarded him a total sum of Kshs. 497,332.78 comprising: 4 months’ salary arrears of Kshs. 67,836/-; Kshs. 16,959/- in one months’ salary in lieu of notice; Kshs. 135,035/- in underpayments between 2019 and 2023; housing allowance of Kshs. 121,284.05; accrued leave between 2020 and 2023 of Kshs. 49,114.13; four years’ service pay of Kshs. 39,135/-; and four months’ compensation of Kshs. 67,959/- for unlawful termination of employment. The Court also awarded costs of the suit, interest from the date of judgment until payment in full, and directed the Appellant to issue the Respondent with a certificate of service. 5.The Appellant was dissatisfied, and it lodged this appeal via a Memorandum of Appeal dated 19th January 2026 contending that:a.The Learned analysed magistrate completely misunderstood the evidence before him, wrongly analysed the evidence and therefore came to wrong conclusions of fact and law.b.The Learned Magistrate erred in fact and in law by awarding the sum of Kshs. 67,836/- as salary arrears without taking in to consideration that the same was not proved.c.The Learned Magistrate erred in fact and in law by awarding the sum of Kshs. 16,959/- as one months’ salary in lieu of notice without taking into consideration that the same was not proved.d.The Learned Magistrate erred in law and fact by awarding the sum of Kshs. 135,000/- as payment for underpayment without taking in to consideration that the same was not proved.e.The Learned Magistrate erred in fact and in law by awarding the sum of Kshs. 121,000/- as house allowance without taking into consideration that the same was not proved.f.The Learned Magistrate erred in fact and in law by awarding the sum of Kshs. 49,000/- as accrued leave without taking into consideration that the same was not proved.g.The Learned Magistrate erred in fact and in law by awarding the sum of Kshs. 39,000/- as service pay without taking into consideration that the same was not proved.h.The Learned Magistrate totally misunderstood and wrongly evaluated the evidence before her and therefore arrived at a wrong conclusion. 6.On the strength of these grounds, it urges this Court to allow the appeal, re-appraise the evidence and arrive at an independent conclusion and award it costs of the appeal. 7.The appeal was canvassed by way of written submissions. Appellant’s Submissions 8.In support of the appeal the Appellant identifies two issues for determination namely:1.Whether the Respondent was unlawfully terminated; and2.Whether the Respondent was entitled to the award of damages. 9.On the first issue the Appellant submits that the Respondent voluntarily resigned hence no unlawful termination of employment occurred. It asserts that although resignation may amount to constructive dismissal where an employer's conduct fundamentally breaches the employment contract and creates an intolerable working environment, the employee must demonstrate that the resignation was justified and directly attributable to the employer’s conduct. The Appellant submits that the Respondent failed to discharge this burden as his resignation letter did not disclose the reason for resignation. In support of its position, the Appellant relies on section 47(5) of the Employment Act and asserts that the burden rested on the Respondent to prove not only that his employment came to an end but also that the termination was unfair or wrongful. It maintains that only after the employee establishes a prima facie case of unfair termination does the burden shift to the employer to justify the reasons for termination. In view of the foregoing, it submits that the Respondent was not entitled to a declaration of unlawful termination. 10.On the second issue, the Appellant submits that compensation for unfair termination was unwarranted since the Respondent voluntarily resigned. For the same reason, it contends that the award of one month’s salary in lieu of notice was legally unsustainable. 11.Regarding the award for underpayment, the Appellant submits that it constituted a continuing injury arising from the contract of employment and was therefore limited by section 90 of the Employment Act to a period of three years preceding the filing of the suit. It asserts that since the Respondent admitted to earning Kshs. 12,000/- monthly, the Trial Magistrate applied an incorrect multiplier in computing the award. For this reason, it urges the court to set aside any award outside the statutory limitation period. 12.As for leave, the Appellant reiterates that any claim preceding the statutory limitation period is time barred under section 90 of the Employment Act. Additionally, it submits that it produced leave records demonstrating that the Respondent had proceeded on leave, but the Trial Court failed to consider that evidence. The Appellant therefore urges the Court to set aside the award under this head. 13.With respect to house allowance, the Appellant submits that it was similarly subject to the three-year limitation period prescribed by section 90 of the Employment Act. It asserts that the Trial Court erred in awarding house allowance for periods falling outside the statutory limitation period and that such awards ought to be set aside. Consequently, it urges the Court to allow the appeal with costs. Respondent’s Submissions 14.The Respondent, on his part, identifies two issues for determination:i.Whether his employment was unlawfully and unfairly terminated through constructive dismissal; andii.Whether he was entitled to the remedies awarded by the Trial Court. 15.On the first issue, the Respondent supports the Trial Court’s finding that he was constructively dismissed. He submits that the Appellant’s failure to pay his salary for four consecutive months amounted to a fundamental breach of the employment contract, thereby compelling him to resign within a reasonable period. He asserts that sections 17 and 18 of the Employment Act impose a mandatory obligation upon employers to pay wages within the prescribed timelines and that the non-payment of salary was clearly reflected in his resignation letter and oral testimony. In support of his position, he relies on Coca-Cola East & Central Africa Limited v Maria Kagai Ligaga [2015] eKLR, in which the court identified the following criteria in evaluating constructive dismissal:a.Identifying the fundamental or essential terms of the contract of employment.b.Determining whether there is a repudiatory breach of those fundamental terms through the conduct of the employer.c.Establishing that the employer’s conduct constitutes a significant breach going to the root of the contract, signalling an intention to no longer be bound by its essential terms.d.Applying an objective test to evaluate the employer’s conduct.e.Proving a clear causal link between the employer’s repudiatory conduct and the employee's decision to terminate the contract.f.Acknowledging that the employee may leave with or without notice, provided the employer’s conduct is the effective catalyst for termination.g.Ensuring the employee has not waived, acquiesced, or condoned the breach, but has instead moved to terminate the relationship within a reasonable time.h.Placing the primary burden of proving the constructive dismissal on the employee. 16.On the damages awarded, the Respondent submits that the award of salary arrears was justified. He asserts that the Appellant failed to produce employment records as required by sections 10(7) and 74 of the Employment Act, whereas he produced bank statements demonstrating that his last salary payment related to June and was credited in July. 17.On one months’ pay in lieu of notice, the Respondent submits that once constructive dismissal is established, the law treats the separation as a dismissal by the employer. He therefore asserts that he was entitled to notice pay under section 35(1)(c) of the Employment Act, as rightfully awarded by the Trial Magistrate. 18.With regard to underpayments, the Respondent submits that the Appellant failed to produce records capable of rebutting his claim. He maintains that he was entitled to the statutory minimum wage prescribed under the applicable Wage Orders and points to his bank statements, which showed that his salary ranged between Kshs. 8,350/- and Kshs. 12,500/- during the period in question 19.Regarding house allowance the Respondent submits that it was rightly awarded as the Appellant failed to prove that it either provided accommodation or that his salary was consolidated contrary to section 31 of the Employment Act. Similarly, in relation to accrued leave, the Respondent contends that his evidence that he neither proceeded on annual leave nor received payment in lieu thereof remained unchallenged. He submits that, in the absence of leave records as required under section 74 of the Employment Act, the trial court correctly found in his favour. He further relies on section 28(1) of the Employment Act, which guarantees employees a minimum of twenty-one annual leave days after every twelve consecutive months of service. 20.On service pay the Respondent submits that he is entitled to the same given the Appellant’s failure to demonstrate contributions to NSSF. He relies on section 35(5) and (6) of the Employment Act that entitles employees to service pay unless proof is provided of membership to NSSF or a pension scheme. Lastly, the Respondent submits that the award of four months’ salary as compensation for unfair termination was a proper exercise of the trial court’s discretion under section 49(1)(c) of the Employment Act. He therefore urges the court not to disturb this finding unless it is minded to enhance the award to 12 months’ salary to punish the Appellant’s exceptional bad faith. Accordingly, the Respondent urges the Court to dismiss the appeal, uphold the Trial Court’s judgment and award him costs of the appeal. Disposition 21.The issues for determination as distilled by this Court are:i.Whether the termination of the Respondent was unlawful and unfair; andii.What remedies can be granted. 22.The Respondent was employed by the Appellant who admits there was economic downturn that affected its operations. The Appellant had averred in the defence that it had experienced financial difficulties which affected its ability to pay salaries for a period of three months. It further averred that employees, including the Respondent, had been notified of the situation and that the outstanding salaries were subsequently paid. The Appellant averred that the Respondent elected to resign instead of waiting for the situation to stabilize. This is an admission that the Appellant created a situation that led to the unfair and unlawful termination of employment. It is not the responsibility of a worker to figure out how the employer will pay his wages. I cannot discern any error in the finding by the Learned Magistrate when she held that the termination was both unfair and unlawful. 23.The issues that give the Court pause are those that revolve around the issue of limitation of actions for the awards made. In any award made, the true north is the Employment Act. The provision relating to limitation of claims is per section 89 (formerly section 90) of the Employment Act. Continuing injuries such as overtime and leave have a limitation of 12 months next after the cessation thereof. In the claim before the Learned Magistrate, there was an award of a sum in excess of the provisions of the law. 24.The Court granted the Respondent 4 months’ salary arrears of Kshs. 67,836/- which this Court upholds. There was also the award of Kshs. 16,959/- being one months’ salary in lieu of notice. That is upheld as the Respondent did not have the benefit of a proper termination of his contract of employment. As regards the sum of Kshs. 135,035/- for underpayments between 2019 and 2023, the only period that would properly be covered is the one-year period meaning only underpayment for one year is upheld. This sum will accordingly be reduced to Kshs. 45,011.66 only. The housing allowance was granted in the sum of Kshs. 121,284.05 and that is reduced to 40,611.66 being the amount for one year. The accrued leave is reduced to Kshs. 16,371.33. The award of four years’ service pay of Kshs. 39,135/- is upheld. The award of four months’ compensation of Kshs. 67,959/- for unlawful termination of employment is discretionary. I have not discerned any departure from the principles for grant of such relief and therefore cannot interfere with the exercise of the discretion of the Court in granting the sum. The Court also awarded costs of the suit which was discretionary and because the Respondent was unlawfully dismissed and had to seek relief in Court, to boot with success, the costs granted are upheld. There was an award of interest from the date of judgment until payment in full which is proper in the circumstances. The Appellant was directed to issue the Respondent with a certificate of service which is the proper thing to do. No employer should ever decline to issue a certificate of service. The appeal therefore is allowed only to the extent of the change in quantum and therefore there will be no order as to costs on appeal.It is so ordered. DATED AND DELIVERED AT KISUMU THIS 23RD DAY OF JUNE 2026NZIOKI WA MAKAU, MCIARB.JUDGE