Workers Can Quit After Months Without Pay and Still Win Compensation, Court Rules

The Employment and Labour Relations Court in Kisumu has ruled that employers cannot stop paying workers simply because their businesses are facing financial problems.

In the case of Pride King Services Ltd v Innocent Onyango (2026), the court found that an employee who resigned after going four months without receiving his salary had been constructively dismissed.

The ruling sends a strong message that employers must continue paying wages even when they are experiencing cash flow challenges.

The case involved a security guard who worked for Pride King Services Ltd. He resigned after the company failed to pay his salary for four consecutive months.

The employer admitted that it was facing financial difficulties.

It argued that employees had been informed about the situation and should have waited for the business to recover because the unpaid salaries would eventually be settled.

However, the court rejected that argument.

Court Says Paying Salaries is the Employer’s Responsibility

Justice Nzioki wa Makau said employees are not responsible for finding ways for their employers to pay wages.

The judge stated, “It is not the responsibility of a worker to figure out how the employer will pay his wages.”

The court ruled that by failing to pay salaries for months, the employer created the conditions that forced the employee to resign.

As a result, the court upheld the finding that the employee had been constructively dismissed.

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Salary is a Basic Contractual Right

The court said a salary is not a benefit that employers can delay until business improves.

Instead, wages are the main payment employees receive for their work and remain one of the employer’s most important legal obligations.

The judgment also noted that financial hardship cannot be transferred to employees who continue reporting to work without receiving their salaries.

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Compensation Claims Reduced for Some Benefits

Although the court upheld claims for:

• Salary arrears
• Notice pay
• Service pay
• Compensation for unlawful termination

it reduced awards for underpayments, house allowance and accrued leave.

The court explained that those claims were affected by the statutory limitation periods under Kenya’s Employment Act.

What the Ruling Means for Workers

The decision reinforces two key principles of Kenyan employment law.

First, employers cannot use cash flow problems as a reason to stop paying workers while expecting them to continue working.

Second, employees should file employment claims within the legal timelines because delays can reduce the amount of compensation they receive, even if they win their cases.

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Court Rules Employers Cannot Withhold Salaries Due to Cash Flow Problems
PHOTO/ROBA ASSOCIATES