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JudgmentVeronicah Wangechi Mwangi VS Belasi Developers Limited3 min read

Veronicah Wangechi Mwangi VS Belasi Developers Limited

Employment and Labour Relations Court at Nairobi Employment and Labour Relations Court (ELRC) · · J. N. Abuodha

Summary

The court addressed a claim for unpaid salary, responsibility allowance, and statutory housing allowance by an employee who resigned due to persistent non-payment by the employer. The claimant alleged the employer failed to pay salaries for May and June 2021, and statutory deductions, leading to constructive dismissal. The court awarded Kshs. 1,005,000 as terminal dues, capping compensation for loss of employment at three months' salary due to the one-year contract with performance review clauses. The award is subject to statutory deductions and interest from the judgment date.

  1. By a memorandum of claim filed on 10th February, 2022, the claimant averred in the main that;-
  2. Sometimes on 3rd May 2021 or thereabouts, the Respondents employed the Claimant in the position of a Chief Executive Officer at a gross salary of Kshs 150,000/00 payable by the end of every month.
  3. Separately, the Respondent agreed to pay the Claimant a Responsibility Allowance of Kshs 25,000/00 the end of every month.
  4. It was an implied term of the Employment Contract that the Respondent would timeously make payment of the Claimant’s monthly salary by the last day of the month.
  5. It was also a statutory term under Section 31 of the Employment Act that the Respondent would provide Housing to the Claimant or provide sufficient amount as rent.
  6. The Claimant served the Respondents with diligence and dedication at the time she was in employment but in default of its obligations, the Respondent persistently failed, refused and/or neglected to be issuing the Claimant with timely payment of her monthly salary.
  7. The Claimant avers that the only payment she received was the sum of Kshs.5000/00 in the month of May 2021 which was meant to be a portion of the Responsibility Allowances.

1

  1. As at the time of the Claimant’s departure, the Respondent was yet to pay to her the salaries for the months of May and June 2021 and also failed to make payment of the Statutory Deductions including for PAYE, NSSF and NHIF or even provide a house allowance.
  2. As a result of the Respondent’s default in making payments at all, the Claimant was subjected to untold suffering, mental anguish and financial difficulties that rendered her destitute with the inability to support herself or her family.
  3. As a result of the frustrations arising out of the non-payment of salaries, the Claimant considered the Respondent’s actions as constructive dismissal and consequently resigned formally on 3rd July 2021.
  4. The Claimant submits that as a result of the constructive dismissal, she suffered abrupt loss of income and trauma for which she suffered damages for which she seeks Terminal dues amounting to Kshs. 2,385,000/00=made up as follows:-
  5. Salary for May and June 2021 Kshs 300,000/00
  6. 1 Month’s salary in Lieu of Notice Kshs 150,000/00
  7. Unpaid Responsibly allowance Kshs 45,000/00
  8. House Allowance Kshs. 60,000/00
  9. Compensation for loss of employment

equivalent to 12 months’ salary ..Kshs. 1,800,000/00

Total Kshs. 2,385.000/00

Kshs. 1,005,000.00

  1. The respondent though served, never entered appearance to the claim nor filed a response. The court therefore on 9th October, 2023 ordered that the matter proceeds as undefended cause. On 8th November, 2023, the matter therefore proceeded ex-parte and the claimant gave her evidence. She relied on her witness statement dated 7th February, 2022 and documents filed with the claim. She relied as well on the further list of documents in support of her case before the court. The witness statement repeated the averments in the statement of claim as summarized above hence there would be no need reproducing the same once again.
  2. The matter as noted proceed undefended and of noting is that the claimant was employed by the respondent at monthly salary of Kshs.150,000/= per month. The contract of employment was one of the documents attached with the claim. The court further noted that the claimant averred that the respondent was irregular in payment of salary to the claimant. Salary is a right to an employee who has rendered service. To fail and or ignore payment of salary is unlawful and a breach of the employment contract. Where non-payment persists as alleged here, an employee has the right to terminate such contract and seek compensation for unfair termination of service.
  3. The claimant at paragraph 14 of her statement of claim, sought to be paid salary for May and June, 2021, one month salary in lieu of notice, unpaid responsibility allowance, house allowance and compensation for loss of employment equivalent to 12 months’ salary.
  4. The court will award her as prayed except that the compensation for unfair termination will be capped at three months in view of the fact that the contract was for one year subject to performance review after every three months. There is a possibility that the contract may have been terminated on account of performance or not renewed upon expiry.
  5. In conclusion, the court awards the claimant the sum of Kshs.1,005,000/=. This award shall be subject to statutory deductions but shall attract interest at court rates from the date of this judgment until payment in full.
  6. It is so ordered.

Dated this …………………………of April, 2024

Delivered this ……………………….. day of April, 2024

Abuodha Nelson Jorum

Judge

    Veronicah Wangechi Mwangi VS Belasi Developers Limited Veronicah Wangechi Mwangi VS Belasi Developers Limited