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Court of AppealPartially AllowedCivil Appeal No. 52 of 2017· [2020] KECA 530 (KLR)

Parbat Siyani Construction Ltd v Daniel Kiprob Ayabei [2020] KECA 530 (KLR)

Court of Appeal
10 July 2020
2,374 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal cut a construction worker's award by refusing house allowance that was never specifically pleaded in his claim.

What this practically means

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Executive summary

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The respondent, Daniel Kiprob Ayabei, claimed unpaid salary, leave, gratuity and house allowance from Parbat Siyani Construction Ltd following his resignation by one month's notice in July 2012 after three years and seven months as a site engineer, with no written contract of employment. The Employment and Labour Relations Court (Wasilwa, J) awarded him Kshs 1,146,196.65, including house allowance of Kshs 661,500, three years' gratuity, leave dues and June/July wages, plus a Certificate of Service. The construction company appealed, contending the house allowance and gratuity awards were unjustified, the salary computations were erroneous, and the respondent was obliged to clear with it before receiving dues, having allegedly failed to account for a stock variance of about Kshs 5.9 million. The Court of Appeal, re-evaluating the evidence as a first appeal, found the monthly salary was Kshs 106,208 and was consolidated. It set aside the house allowance award because house allowance had never been specifically pleaded, restating the rule that special damages must be specifically pleaded and strictly proved. It upheld gratuity in principle - the employer's NSSF/NHIF defence failed because it produced no payslips, statements or membership number to prove contributions - but recomputed it downward to Kshs 148,691. The clearance objection was rejected as unsupported by any demand, audit or police records. The appeal partially succeeded: leave dues of Kshs 73,146.65, gratuity of Kshs 148,691 and wages of Kshs 213,000 for June and July 2012 stand; the house allowance award was disallowed. Each party was ordered to bear its own costs in both courts, and the Certificate of Service order was retained.

Key legal issues

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01

Entitlement to house allowance

Holding

The house allowance award of Kshs 661,500 was set aside because house allowance was never pleaded; the salary was inferred to be consolidated

Reasoning

The pleadings disclosed no claim for house allowance. Special damages must be specifically pleaded and strictly proved. The court also noted the respondent never raised house allowance during nearly three years of employment, supporting the inference that the salary was consolidated. The trial court therefore erred in awarding an unpleaded head of damages.

p. 3
02

Entitlement to service gratuity

Holding

Gratuity upheld in principle but recomputed at Kshs 148,691 based on the correct salary; the NSSF/NHIF defence failed for lack of proof

Reasoning

Section 36(6) of the Employment Act bars gratuity where the employee is an NSSF/NHIF member and deductions are made, but the employer produced only its own payment schedules, no payslips, no NSSF/NHIF statements and no membership number, so membership was not proved. Gratuity under rule 19(1)(c) of the Wages Order was therefore payable but had to be recalculated on the correct monthly salary.

p. 4
03

Monthly salary determination

Holding

The court found the monthly salary to be Kshs 106,208 (consolidated), rejecting the respondent's claim that it was exclusive of house allowance

Reasoning

The trial judge never determined the monthly salary. On re-evaluation, the respondent himself said he was employed at 80,000 rising to 106,000 exclusive of house allowance, and DW1 gave a similar figure. The court inferred a consolidated salary, which affected the computations of wages, gratuity and house allowance.

p. 3
04

Clearance before payment of dues

Holding

The appellant's allegation that the respondent refused to clear over a stock variance of Kshs 5.9 million was unsupported; the respondent was entitled to his dues

Reasoning

No clearance instructions were issued, no demands made, no audit report produced and no police records tendered. DW1's cross-examination undermined the allegation. An employee who gives due notice and is given no clearance instructions is entitled to final dues and a Certificate of Service under section 51 of the Employment Act.

p. 4
05

Standard of review on first appeal

Holding

The Court applied the settled first-appeal standard: re-evaluate the evidence and reach own conclusions, interfering with findings of fact only if based on no evidence

Reasoning

Citing Selle vs Associated Motor Boat Co and Jabane vs Olenja, the Court restated its duty on a first appeal to analyze and evaluate the evidence afresh while remembering it did not hear the witnesses, and its reluctance to interfere with trial court findings of fact unless they are based on no evidence.

p. 2

Legal principles established

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  • Special damages must be specifically pleaded and strictly proved before they can be awarded; a trial court cannot award unpleaded special damages
  • Where an employer relies on NSSF/NHIF contributions to defeat a gratuity claim, it must prove the employee's membership and actual remittance of contributions, not merely produce its own payment schedules
  • On a first appeal, the court is duty-bound to re-evaluate the evidence and reach its own conclusions while bearing in mind that it did not see or hear the witnesses
  • An employee who gives proper notice of termination and against whom no clearance instructions are issued is entitled to final employment dues and a Certificate of Service

Court orders

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  1. 1.The appellant to pay the respondent 7 months leave days for 2012 Kshs. 73,146.65
  2. 2.The appellant to pay the respondent 3 years' gratuity at 14 days a year at Kshs. 148,691
  3. 3.The appellant to issue the respondent with a Certificate of Service
  4. 4.Each party to bear their own costs in the Employment and Labour Relations Court and in this Court
On appeal from
Employment and Labour Relations Court of Kenya at Nairobi
Employment & Labour Relations Cause No. 276 of 2013
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (Constitution of Kenya, Article 164) against the judgment of the Employment and Labour Relations Court

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, "Parbat Siyani Construction Ltd v Daniel Kiprob Ayabei [2020] KECA 530 (KLR)", Case Analysis (2020). Civil Appeal No. 52 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/530/eng@2020-07-10

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