An employee who goes without a salary cannot reasonably be expected to keep reporting to work, the Employment and Labour Relations Court has ruled, warning employers against withholding workers’ pay while still expecting them to report for duty.
The court recognised an employee’s inability to report to work because of prolonged non- payment of salary as a justified cause, rather than mere desertion of duty.
“Without a salary, the employee has no reason to report to work,” the court said.
In a ruling delivered on August 31, the court explained that prolonged non-payment of salary could place an employee in inhuman and degrading circumstances and effectively render the employment contract no longer binding on the employee.
The court further held that where an employer’s prolonged failure to pay salary made the employment contract untenable, the resulting termination could be deemed to have been initiated by the employer.
The court made the ruling in a case in which Samuel Kingiri, a driver, sued his employer, Surtech Limited, claiming unfair termination of his employment during the Covid 19 pandemic.
The court found that the company had unfairly terminated Mr Kingiri’s employment through constructive unfair dismissal when it left him without a clear decision on his employment status. Constructive dismissal of an employee arises when the employer, through its conduct, undermines the employment relationship.
It held that the non- payment of salary had placed Mr Kingiri in distress and left him unable to feed himself, resulting in a life of indignity.
“It is therefore not sufficient for Surtech Limited, as the employer, to cite the Covid pandemic. Where an operational matter or unforeseen circumstances render an employer's ability not feasible, there is legal mechanism to protect the parties. Leaving the employee at large, the firm came into conflict with the law,” the court said.
Mr Kingiri sued the company in 2022 after he was rendered jobless following the merger of Surtech Limited and Britech Limited. He told the magistrate’s court that he had been employed by Surtech in 1988 as a driver.
He said the two companies merged on July 3, 2018, and operated under the name Britech/Surtech Consulting Engineers Limited, which he claimed was not registered.
According to Mr Kingiri, the company stopped paying his salary in September 2021 and failed to communicate with him about the status of his employment despite his repeated attempts to resolve the matter.
Unfairly and unlawfully dismissed
He said the prolonged failure to pay his salary had subjected him and his family to suffering, poverty and indignity and amounted to a fundamental breach of his employment contract and constructive dismissal.
He also accused the company of failing to give him reasonable notice of termination and pay his terminal dues.
Mr Kingiri sought a declaration that he had been unfairly and unlawfully dismissed, together with compensation for unfair termination and payment of damages.
Surtech Limited admitted employing Mr Kingiri but said it had paid his salary up to November 2021, not September as he claimed. The company denied terminating his employment, saying the Covid 19 pandemic and lockdown had temporarily reduced available work.
It said many employees had agreed to stay away from work until conditions improved, and Mr Kingiri was among them.
The company maintained that he had been absent from duty since September 2021 and had received all his dues up to the time he left employment. It denied owing him any outstanding dues and urged the court to dismiss the claim.
The magistrate’s court dismissed the case, holding that Mr Kingiri had absconded duty, which constituted gross misconduct warranting termination of employment.
Mr Kingiri then appealed to the Employment and Labour Relations Court in Nairobi, seeking to have the magistrate’s findings overturned and a declaration that his employment had been unfairly terminated.
He argued that the magistrate had misunderstood his case as one involving termination by notice rather than constructive dismissal. He also said the court had failed to consider whether there was procedural fairness or substantive justification for the allegation that he had failed to report to work.
Mr Kingiri maintained that he had established constructive dismissal and was therefore entitled to compensation, damages and terminal dues. He also challenged the finding on his accrued leave, saying the 166 days belonged to him and not the company’s managing director.
The Employment and Labour Relations Court found that Surtech’s failure to pay Mr Kingiri’s salary amounted to a fundamental breach of the employment relationship and constituted constructive dismissal.
The court noted that although the company alleged that he had absconded duty, it had failed to address the circumstances or take steps to formally terminate his employment.
It said an employer had a duty to summon an employee who was allegedly absent and, where the absence persisted, report the matter to a labour officer as required by law.
“The employer cannot lawfully plead abscondment without bringing the employment relationship to a close,” the court held.
It further found that the prolonged failure to pay salary could not be justified by the Covid-19 pandemic, particularly where the employer had failed to formally determine the employee’s employment status.
“The failure to pay the appellant's due salaries is unjustified and has resulted in a fundamental breach of the employment relationship,” the court said.
The court consequently found that Surtech’s conduct amounted to wrongful and unlawful termination and set aside the Milimani magistrate’s court judgment.
It entered judgment for Mr Kingiri, declaring that his employment had been terminated through constructive unfair dismissal.
The court awarded him Sh636,290 in compensation and Sh63,629 in notice pay, ordered the company to issue him with a certificate of service, and directed it to meet the costs of both the appeal and the proceedings before the magistrate’s court.
