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Court of AppealDismissedCivil Appeal No. 249 of 2017· [2018] KECA 755 (KLR)

Wells Fargo Limited v Julius Ihomba Gatete

Court of Appeal
2 March 2018
2,474 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that security industry employees, even office staff, can claim gratuity under protective security regulations despite NSSF membership.

What this practically means

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Executive summary

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The respondent, Julius Ihomba Gatete, served Wells Fargo Limited for sixteen years, retiring voluntarily on 14th January 2010. In the Employment and Labour Relations Court he claimed accrued leave, unpaid salary and 16 years' service gratuity. Nduma, J., by judgment dated 6th September 2013, held that the Regulation of Wages (Protective Security Services) Order, 1998 applied to him and, invoking section 26(2) of the Employment Act, awarded him gratuity of Kshs. 560,000.00 with interest and costs. Wells Fargo appealed, contending that the respondent was a senior member of management outside the Order's minimum-wage categories, and that his NSSF membership barred gratuity under section 35(6)(d) of the Employment Act, relying on Chengo Kitsao Chengo v. Umoja Rubber Products Ltd. The Court of Appeal, hearing the appeal as a first appeal on fact and law under section 17 of the ELRC Act, found no basis to disturb the trial judge's findings. The appellant, having averred that the respondent was in management, bore the burden of proof under section 109 of the Evidence Act but produced no promotion letter, and the respondent's pay slips consistently described him as guards office staff in the guarding department for all sixteen years. A purposive reading of regulation 2 of the Order brought the respondent within it as a person indirectly involved in guarding. On NSSF, the Court held that regulation 17 of the Order provided more favourable terms which, by section 26(2) of the Employment Act, prevailed over section 35(6); Chengo was distinguished as involving no better terms. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Applicability of the Regulation of Wages (Protective Security Services) Order, 1998 to the respondent

Holding

The Order applied to the respondent as a person indirectly involved in the guarding industry through vetting and background investigation of guards; his alleged management status was not proved.

Reasoning

The appellant bore the burden of proving management status but produced no letter appointing or promoting the respondent beyond his appointment letter; his pay slips for 16 years consistently showed him as guards office staff in the guarding department, and his modest salary did not support management status. Regulation 2 of the Order covers persons employed directly or indirectly in guarding activities, so a purposive interpretation brought the respondent within it despite his not being a uniformed guard.

p. 3
02

Whether NSSF membership barred gratuity under section 35(6)(d) of the Employment Act

Holding

No: under section 26(2) of the Employment Act, the more favourable gratuity terms in regulation 17 of the Order prevailed over section 35(6).

Reasoning

Section 35(6) excludes service pay for NSSF members, but section 26(2) mandates application of more favourable terms regulated by other written law. The trial judge properly fell back on section 26(2) and upheld gratuity under regulation 17 notwithstanding NSSF contributions. Chengo Kitsao Chengo was distinguishable because there was no evidence in that case of better contractual or regulatory terms than section 35.

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Legal principles established

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  • Where terms and conditions of service regulated by regulations or other written law are more favourable to an employee than the terms in Part VI of the Employment Act (including section 35(6)), the more favourable terms apply by virtue of section 26(2), so NSSF membership does not preclude gratuity under such regulations.
  • On a first appeal from the Employment and Labour Relations Court, the appellate court revisits and evaluates the evidence afresh but will not readily differ from the trial court's factual conclusions unless they are based on no evidence, a misapprehension of the evidence, or a wrong principle.
  • The party who avers that an employee was part of management bears the burden of proving that fact on a balance of probability under section 109 of the Evidence Act.

Court orders

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  1. 1.Appeal dismissed with costs to the respondent
On appeal from
Employment and Labour Relations Court
Cause No. 356 of 2010
Jurisdiction invoked
Section 17 of the Employment & Labour Relations Court Act as amended by the Statute Law (Miscellaneous Amendments) Act, No. 18 of 2014

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Wells Fargo Limited v Julius Ihomba Gatete", Case Analysis (2018). Civil Appeal No. 249 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/755/eng@2018-03-02

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.