British American Tobacco Kenya (Ltd) v Ekaya (Civil Appeal 402 of 2019) [2026] KECA 958 (KLR)
The bottom line
#Kenya's Court of Appeal upheld a retired employee's CBA-based exit benefits but struck out a Kshs.980,000 pension award because it was never pleaded or proven.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the CBA governed the respondent's exit from employment
- 2.Whether the respondent's exit constituted redundancy
- 3.What constituted the respondent's correct retiring salary and applicable allowances
- 4.Whether the respondent was legally entitled to Kshs. 980,000
- 5.The benefits due and payable to the respondent
- 6.The legal effect of the discharge voucher executed by the respondent
- 7.The issue of interest payable, if any
- 8.Whether the trial court exceeded its jurisdiction by granting reliefs not specifically pleaded or proved
Key legal issues
#Whether the CBA governed the respondent's exit from employment
Yes - the CBA governed the respondent's exit package and remained binding notwithstanding the VER agreement
Clause 33(1)(b) of the CBA required early-retirement payments to be as per the Redundancy Clause No. 31 and the Provident Fund Rules. Section 59(1) of the Labour Relations Act anchors the binding nature of a CBA on parties and unionisable employees. The VER terms substantially mirrored Clause 31, and correspondence confirmed affected employees would be compensated under the new CBA. Any side arrangements varying the CBA to the respondent's detriment were not sanctioned by the appellant or the union.
Whether the respondent was legally entitled to Kshs.980,000 from the Staff Pension Scheme
No - the award of Kshs.980,000 was set aside because the claim was neither pleaded nor supported by evidence
The trial judge had awarded the amount on the basis that the respondent was the sole surviving member of the scheme, but the Court of Appeal found no supporting evidence was presented and the claim was not pleaded. Applying the principle that parties are bound by their pleadings, the Court held the award could not stand and set it aside, reversing the High Court on this head.
The correct retiring salary and applicable allowances
The trial court's finding that the retiring salary was Kshs.78,241 and house allowance Kshs.4,000 was affirmed
The record included an Industrial Court decision awarding a 10% increase for the first year and 12% for the second, exclusive of merit increases. On that basis the Court affirmed the trial court's computation of the retiring salary at Kshs.78,241 and house allowance at Kshs.4,000, and found no evidence of accrued leave.
Whether the judgment of the High Court was incomplete for directing recalculation of provident fund dues
No - the judgment was complete; the direction for recalculation was appropriate and did not abdicate judicial responsibility
The appellant argued that a direction to recalculate was an interim decree at the final judgment stage, contrary to the finality of judgments. The Court found the High Court judgment complete and distinguished Kenya Revenue Authority v Menginya Salim Murgani, where the trial court had relegated its judicial function to the Deputy Registrar for assessment of damages. Here the direction was proper given the uncertainty of the precise claim under the provident fund head.
Interest payable
The trial court properly exercised its discretion under Section 26 of the Civil Procedure Act; the High Court's award of interest for the four-year judgment delay was not disturbed, but the appellant's complaint was addressed by making no order as to costs
Section 26 of the Civil Procedure Act vests discretion in the trial court over interest. Citing South Nyanza Sugar Company Limited v Oreko, the Court affirmed that interest on special damages accrues from the date of filing suit while general damages accrue from the judgment date. On the four-year delay in delivering judgment, the Court invoked by parity the Supreme Court's Muthuuri decision that court-caused delay cannot be visited on a party, and responded by making no order as to costs.
Legal principles established
#- A collective bargaining agreement binds the parties and all unionisable employees, and private side arrangements cannot vary it to an employee's detriment where the CBA governs terminal dues
- On a first appeal, the Court of Appeal must re-evaluate the evidence, draw its own inferences of fact and reach independent conclusions, interfering with trial court findings of fact only where they are based on no evidence, a misapprehension of the evidence, or wrong principles
- Parties are bound by their pleadings; an unpleaded claim with no supporting evidence cannot be awarded
Court orders
#- 1.The appeal partially succeeds; the award of Kshs.980,000 is set aside
- 2.All other findings of the High Court are upheld
- 3.Recalculations be undertaken within thirty (30) days
- 4.The matter shall thereafter be mentioned before a Judge of the Employment and Labour Relations Court in Nairobi to confirm compliance
- 5.No order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya (employment dispute, now falling under the ELRC)
- Not stated
- Jurisdiction invoked
- First appeal under Rule 31(1) of the Court of Appeal Rules, 2022
Relief refused
#Claim for Kshs.980,000 from the Staff Pension Scheme (upheld by the High Court, now set aside)
The claim was not pleaded and no supporting evidence was presented; parties are bound by their pleadings
Appellant's plea that interest for the four-year judgment delay should not be awarded (respondent's interest award retained but with no order as to costs in the appellant's favour on that point)
The court adopted the parity of reasoning from Muthuuri, and in the interests of justice made no order as to costs rather than disturbing the award
Costs
No order as to costs - 'By parity of reasoning, in the circumstances, and in the interests of justice, we make no order as to costs.'
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
This being a first appeal, our mandate as a first appellate court under Rule 31 (1) of the Court of Appeal Rules, 2022 is to re - evaluate the evidence on record, draw our own inferences of fact, and arrive at independent conclusions
Accordingly, the CBA remained binding and its sanctity must be upheld. We find that the CBA governed the respondent’s exit package.
It is settled law that parties are bound by their pleadings
In the result, the appeal partially succeeds. The award of Kshs.980,000 is set aside. All other findings are upheld.
We further direct that recalculations be undertaken within thirty (30) days. The matter shall thereafter be mentioned before a Judge of the Employment and Labour Relations Court in Nairobi to confirm compliance.
By parity of reasoning, in the circumstances, and in the interests of justice, we make no order as to costs.
Issues in the judgment
#Internal inconsistency: the appellant's Ground vi alleges the Judge erred by holding the respondent was declared redundant and entitled to severance pay, but the judgment records that the trial court held redundancy provisions inapplicable and the Court of Appeal likewise found the exit was voluntary early retirement, not redundancy
Internal inconsistency: the trial court is recorded as holding that the claim for interest as pleaded was not established, yet the Court of Appeal records that the High Court found the respondent entitled to interest for the four-year judgment delay
The case number of the appeal and of the High Court suit are not stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "British American Tobacco Kenya (Ltd) v Ekaya (Civil Appeal 402 of 2019) [2026] KECA 958 (KLR)", Case Analysis (2026). Not stated in the judgment (Memorandum of Appeal dated 23rd August 2019, amended 12th July 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/958/eng@2026-05-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.