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Court of AppealDismissedCivil Appeal No. 101 of 2017

Ndugu Transport Company Limited v Barrack Musumba Oluoch [2020] KECA 902 (KLR)

Court of Appeal of Kenya
31 January 2020
2,278 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed employers must pay house allowance at 15% of salary unless they can prove they actually housed the employee.

What this practically means

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Executive summary

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The Court of Appeal at Kisumu (Kiage, JA writing; Makhandia, JA concurring; Odek, JA having died before delivery of the judgment) dismissed this appeal against a judgment of the Employment and Labour Relations Court at Kisumu (M. Onyango, J) which had found that the respondent, a commercial truck driver summarily dismissed by the appellant in December 2014, was unfairly terminated and awarded him underpayments, one month's pay in lieu of notice, four months' compensation, and a certificate of service. The appellant raised four grounds but the Court found that, properly construed, the only live issue was the house allowance award and its tabulation, grounds 2 and 4 being ambiguous and in violation of Rule 86(1) of the Court of Appeal Rules. Under Rule 104(a), and absent leave, the appellant was estopped from arguing grounds not specified in the memorandum. On the merits, the Court applied section 31(1) of the Employment Act, held that the respondent was not housed by the appellant and no itemised housing allowance appeared on his payslips, and rejected the appellant's unsupported claim that the respondent had declined employer housing. The Court recalculated house allowance at 15% of the successive statutory minimum wages across the 2010-2014 employment period, finding only a Kshs. 15.34 discrepancy from the judge's figures. Holding that the learned judge did not err, the Court found no basis for interfering with her judgment, dismissed the appeal, and awarded costs to the respondent. The judgment reiterates the duty of a first appellate court to re-evaluate evidence and reach independent conclusions, and the need for concisely drafted memoranda of appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the respondent was entitled to house allowance where the appellant contended it had provided housing which the respondent declined
  2. 2.Whether the learned judge correctly tabulated the house allowance at 15% of the applicable minimum wage

Key legal issues

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01

Whether the respondent was entitled to house allowance despite the appellant's claim that housing was provided

Holding

The respondent was entitled to house allowance because the appellant neither housed him nor paid a housing allowance itemised in the payslips

Reasoning

Section 31(1) of the Employment Act obliges the employer to provide reasonable housing or pay a sufficient rent sum. The payslips showed no itemised housing allowance. The respondent testified he lived in Kondele Migosi and was not housed because the appellant's houses were too small. The appellant's assertion that the respondent declined the housing was unsupported by any evidence adduced at trial, so the entitlement stood.

p. 4
02

Whether the learned judge's tabulation of the house allowance was erroneous

Holding

The tabulation was substantially correct; the only error was a reduction of Kshs. 15.34, insufficient to justify interference

Reasoning

The Court took judicial notice of four Regulations of Wages (General) (Amendment) Orders (2010-2013) fixing minimum wages for drivers of heavy commercial vehicles and recalculated house allowance at 15% of the applicable salary across the employment period. The totals differed from the judge's award by only Kshs. 15.34, confirming she had applied the correct formula, so there was no basis for interference.

p. 5
03

Whether the appellant could argue grounds not properly set out in the memorandum of appeal

Holding

The ambiguous grounds 2 and 4 violated Rule 86(1) and, absent leave under Rule 104(a), the appellant was estopped from arguing matters not specified in the grounds

Reasoning

The Court found grounds 2 and 4 of the memorandum vague, merely asserting that the judge misdirected herself without specifying the evidence or the misdirection, contrary to Rule 86(1). The respondent also pointed out that liability was not among the grounds. Having not sought leave, the appellant was estopped under Rule 104(a) from arguing anything beyond the housing allowance issue.

p. 4

Legal principles established

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  • A first appellate court must re-consider and re-evaluate the evidence and arrive at its own independent conclusions
  • A memorandum of appeal must set out the grounds concisely and under distinct heads without argument or narrative, as required by Rule 86(1) of the Court of Appeal Rules
  • Without leave of the Court, a party may not at the hearing argue any ground not specified in the memorandum of appeal or notice of cross-appeal (Rule 104(a))
  • Under section 31(1) of the Employment Act, an employer must either provide reasonable housing accommodation or pay a sufficient sum as rent in addition to wages; where the employee is not housed, house allowance is payable and may be computed at 15% of the salary

Court orders

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  1. 1.Appeal dismissed
  2. 2.Costs of the appeal awarded to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Wrote the principal judgment dismissing the appeal. Found the only live issue was the house allowance award; held the respondent was not housed by the appellant and was therefore entitled to housing allowance at 15% of salary; recalculated the tabulation and found only a Kshs. 15.34 discrepancy; declined to interfere with the ELRC judgment. Observed that Odek, JA had died before delivery of the judgment.

Ultimately, I come to the conclusion that the learned judge did not err in her findings and as such I have no basis for interfering with her judgment.p. 5
majority
OD
majority
On appeal from
Employment and Labour Relations Court of Kenya at Kisumu
ELRC No. 99 of 2015
Jurisdiction invoked
First appellate jurisdiction under the Court of Appeal Rules over an appeal from the Employment and Labour Relations Court; judgment given under Rule 32(3) of the Court of Appeal Rules

Relief refused

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The appellant's prayer that the award of house allowance be set aside on the ground that it provided housing to its employees

No evidence was tendered during the trial that the appellant provided or that the respondent refused housing

p. 4

The appellant's challenge to the tabulation of the house allowance

Recalculation by the Court showed the judge's figures differed by only Kshs. 15.34 and were otherwise correct

p. 5

Costs

The appeal was dismissed with costs to the respondent

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

As the first appellate Court we have an obligation to re-consider and re-evaluate the evidence and come up with independent conclusions
p. 3Duty of a first appellate court
memoranda of appeal need to be more carefully and efficiently crafted by counsel. In this regard, precise, concise and brief is wiser and better.
p. 4Crafting memoranda of appeal
I find that since the respondent was not housed by the appellant, he was entitled to house allowance.
p. 4House allowance entitlement under section 31(1) of the Employment Act
This appeal has no merit and is accordingly dismissed with costs to the respondent.
p. 5Disposition

Issues in the judgment

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minor

The memorandum of appeal records the first ground as challenging the award of house allowance where housing was provided, but the body of the judgment at one point describes the appeal as being on liability and quantum; the Court resolved the inconsistency by holding that the only clear issue appealed on was the housing allowance

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, "Ndugu Transport Company Limited v Barrack Musumba Oluoch [2020] KECA 902 (KLR)", Case Analysis (2020). Civil Appeal No. 101 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/902/eng@2020-01-31

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