The Employment and Labour Relations Court (ELRC) has ruled that non-payment of salary is a breach of the employment contract and an employee is justified in terminating the employment.
Justice Monica Mbaru also ruled that refusing to pay terminal dues, particularly salaries earned, is an employment offence as it denies an employee a fair chance to enjoy the fruits of his or her labour.
The judge further ruled that under Sections 17 and 18 of the Employment Act, salary due should not be withheld unless for a justified cause that must be brought to the employee’s attention.
Justice Mbaru made the decision in a case where Ali Chimwani sued Solfin Solutions Ltd, accusing it of delaying his salaries or making partial payments while the rest of the employees were paid in full.
The judge ordered the company to pay Mr Chimwani who was an accountant in the firm a total of Sh455,000 being 19 accrued leave days and unpaid salaries.
Justice Mbaru said that the law requires the payment of salary for work done and that non-payment of salary without good cause breaches the Constitution and the Employment Act and amounts to unfair labour practices.
She also added that where an employee fails to do his duties properly or does them poorly, the employer can invoke the legal protections under the Employment Act.
“Notice must be issued to the employee to allow him to attend and address the issue, leaving the employee at large and then making allegations that he failed to do his duties, such is being farfetched,” ruled Justice Mbaru.
According to the claimant, he was employed as a chief accountant and that in early 2022, the respondent started delaying salaries or making partial payments while the rest of the employees were paid in full before he was forced to tender his resignation.
He told the court that he was restricted from accessing bank records and other transactions yet he was expected to prepare and maintain financial reports.
The court heard that the claimant felt humiliated and treated in an inhumane manner hence he was forced to resign and that it was not a voluntary resignation as Solfin Solutions had alleged.
Almost winding up
Solfin Solutions told the court that it was issued with an agency notice by the Kenya Revenue Authority that led to delays in salary payments, thus the situation resulted in a cash crunch, almost resulting in a winding up.
It accused Mr Chimwani of failing to perform his duties including maintain financial records and processing audited accounts each year and failed to complete the 2022 books of accounts resulting in penalties forcing it to outsource the function.
The company alleged that Mr Chimwani failed to complete his duties and violated the human resources policies and principles of accountant confidentiality by entering personal and private contracts with its business partners.
It also accused Mr Chimwani of failing to maintain company records and divulged secrets to unauthorised persons and that the claim should be dismissed with costs.
