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ELRCPartially AllowedCause 666 of 2012· [2013] KEELRC 469 (KLR)

JOHN MBURU KAMAU V KENYA SAFARI LODGES [2013] KEELRC 469 (KLR)

Industrial Court of Kenya
27 February 2013
1,187 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan finance manager won most of his unpaid gratuity after resigning, but the court refused extra damages because his written contract was never breached.

What this practically means

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Executive summary

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The Industrial Court of Kenya (Lady Justice Maureen Onyango) determined a dispute over terminal dues arising from the resignation of John Mburu Kamau, a Finance Manager engaged by Kenya Safari Lodges on a three-year fixed term contract commencing 15th September 2009. The Claimant gave notice of resignation on 25th June 2011 proposing to work until 30th July 2011, with the balance of notice covered by his 52 accrued leave days. The Respondent accepted the resignation but amended the last working day to 29th September 2011, with leave running concurrently with the notice period, and paid Shs.267,101 as terminal benefits. The Claimant sued for Shs.609,732.81 as the balance of terminal dues, a declaration of breach of contract, 12 months' salary (Shs.2,058,240) as damages, a Certificate of Service and interest at 24%. The court found the leave ran concurrently with notice, disbelieving the Claimant's alleged exit-interview agreement, which was unpleaded, could not amend a written document by verbal agreement, and was barred by the two-year qualifying period under Paragraph 10.7 of the terms of service. Terminal benefits were recalculated to end of September 2011, giving gratuity of Shs.958,058 less PAYE, the KCB loan of Shs.61,564 and amounts already paid. Claims for damages, tax relief and interest were dismissed. The Claimant was granted a Certificate of Service and 50% of his taxed costs.

Key legal issues

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01

Whether the Claimant served his notice while on accumulated leave, and the last date of service

Holding

The last working day was amended to 29th September 2011 with leave running concurrently with notice; the Claimant was on payroll to end of September 2011 and terminal benefits are calculated to that date

Reasoning

The letter accepting resignation changed the last working day from 30th July to 29th September 2011, requiring the Claimant to fill a leave form covering outstanding leave applied to run concurrently with the notice period. The Claimant did not protest. The court disbelieved his claim of an exit-interview agreement on terminal leave: it was unpleaded, verbal agreements cannot amend written documents, and he had not served the 2-year qualifying period under Paragraph 10.7 of the terms of service.

p. 2
02

Quantum of gratuity payable

Holding

Gratuity at 25% of annual basic salary calculated to end of September 2011, totalling Shs.958,058 before tax

Reasoning

The contract provided gratuity at 25% of annual basic salary. The Respondent calculated gratuity only to 30th July 2011 (Shs.872,298), omitting August and September 2011 worth Shs.85,760. Since the Claimant remained in employment to the end of September 2011, no deductions should be made for salaries paid in those months, and he was entitled to airtime for the same reason.

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03

Whether there was breach of contract warranting 12 months' salary as damages

Holding

No breach; the claim for damages was dismissed

Reasoning

The court found no breach of the Claimant's contract. Having accepted that terminal benefits were calculated to end of September 2011 and that deductions for tax and KCB loan were proper, the only shortfall was the unpaid sum of Shs.12,280. The failure to pay part of terminal dues did not constitute breach sufficient to found damages of 12 months' salary.

p. 3

Legal principles established

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  • Verbal agreements cannot be used to amend the contents of written documents
  • Claims must be pleaded; unpleaded arrangements cannot found a claim
  • Entitlement to terminal leave depends on serving the qualifying period under the terms and conditions of service

Court orders

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  1. 1.Terminal benefits in the sum of Shs.958,058 less the amount already paid to him, income tax on Shs.85,760 and KCB loan repayment of Shs.61,564
  2. 2.A Certificate of Service to be issued to the Claimant
  3. 3.Claims for damages for breach of contract, tax relief and interest dismissed
  4. 4.Respondent to pay 50% of the Claimant's costs as taxed
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court (Cause 666 of 2012)

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, "JOHN MBURU KAMAU V KENYA SAFARI LODGES [2013] KEELRC 469 (KLR)", Case Analysis (2013). Cause 666 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/469/eng@2013-02-27

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