Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially Allowed· [2013] KEELRC 579 (KLR)

Isabel Wayua Musau v Copy Cat Limited [2013] KEELRC 579 (KLR)

Industrial Court of Kenya
15 March 2013
RSRadido Stephen
4,052 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
The Claimant, employed by the Respondent from 1990 and rising to Human Resources Manager, claimed she was denied a 2010 salary increment granted to colleagues, was discriminated against, and was forced to retire on 31 December 2010. She sought a declaration of discrimination, a 100% increment for 2010, compensation for forced retirement and terminal benefits totalling nearly Kshs 6,600,000. The Respondent maintained that increments were discretionary and merit-based, that retirement was voluntary, and that all dues were paid. The court, Radido J, framed the central issue as whether an employee is entitled to a salary review/increment. It found no statutory right under the Employment Act, 2007, the Labour Institutions Act, 2007 or the Labour Relations Act, 2007, and no express contractual term in the letter of appointment. However, the Respondent's consistent practice of written annual salary reviews hardened into an implied term and created a legitimate expectation. The failure to inform the Claimant in writing that she would not receive an increment was held arbitrary and capricious rather than discriminatory. The court invoked section 12(3)(vi) and (viii) of the Industrial Court Act to award Kshs 240,000 as damages (10% of gross yearly salary), plus Kshs 480,000 as the promised Group Incentive Award bonus, totalling Kshs 720,000. The remaining prayers were declined; the fuel allowance claim failed as the allowance was not remunerative. Each party was ordered to bear its own costs.

Key legal issues

#
01

Statutory right to salary review/increment

Holding

No statutory entitlement to an annual salary review exists under the three principal labour statutes

Reasoning

The court examined the Employment Act, 2007, the Labour Institutions Act, 2007 and the Labour Relations Act, 2007. The Employment Act regulates basic conditions and payment of wages but nowhere in its 93 substantive provisions sets out a right to an annual salary raise. Wages Orders under the Labour Institutions Act set minimums only, and no Wages Order applied to the Claimant; no Collective Agreement was invoked.

p. 3
02

Implied term arising from management practice/custom

Holding

The Respondent's practice of annual salary reviews hardened into an implied contractual term and created a legitimate expectation

Reasoning

The court found evidence of a consistent practice of written annual salary reviews granted to other employees. Relying on persuasive foreign authority and scholarly writing, it held that an employer must not treat an employee arbitrarily, capriciously or inequitably where pay is concerned, while cautioning against the court assuming control of an employer's labour costs and managerial prerogative.

p. 5
03

Discrimination versus arbitrary and capricious conduct

Holding

The failure to communicate to the Claimant that she would not receive an increment was arbitrary and capricious, not discriminatory

Reasoning

Colleagues were informed in writing of their increments while the Claimant was not told hers would not increase. The court would have expected formal communication that the withholding was performance-based. It characterised this silence as arbitrary and capricious rather than discrimination under section 5 of the Employment Act or Articles 27 and 41 of the Constitution.

p. 6
04

Group Incentive Award bonus of 20% of basic annual salary

Holding

The letter of 28 September 2009 created a legitimate expectation to the bonus, assessed at Kshs 480,000

Reasoning

The letter informed the Claimant she would be eligible for a Group Incentive Award bonus of 20% of basic annual salary effective January 2010. Her basic annual salary was Kshs 2,400,000, so 20% yields Kshs 480,000, which the court awarded as damages for loss of the opportunity to earn the incentive bonus.

p. 7

Legal principles established

#
  • An implied term to increase or review an employee's salary can be incorporated into a contract of employment where a practice or custom of annual increments has been established, and the court may intervene where the employer acts capriciously or arbitrarily
  • There is no express statutory right to an annual salary increment under the Employment Act, 2007, the Labour Institutions Act, 2007 or the Labour Relations Act, 2007
  • A letter promising eligibility to a bonus scheme creates a legitimate expectation entitling the employee to recover the sum

Court orders

#
  1. 1.The prayers set out in paragraph 12 of the Statement of Claim are declined
  2. 2.The Respondent is ordered to pay the Claimant the sum of Kshs 240,000 as damages
  3. 3.The Respondent is ordered to pay the Claimant Kshs 480,000 as Group Incentive Award for 2010, all totalling Kshs 720,000
  4. 4.Each party to bear its own costs

Authorities

#

Legislation

  • Employment Actsections 10(2), 17, 18, 25, 41; Part V; section 5
  • Labour Institutions ActPart VI; sections 44, 48; sections 47 and 48
  • Labour Relations Act
  • Industrial Court Actsection 12(3)(vi) and (viii)
  • Industrial Court (Procedure) RulesRule 4
  • Employment (Medical Treatment) Rules
  • Constitution of KenyaArticles 27(7) and 41

Cases cited (5)

  • Clark v BET plc & Another
    (1997) IRLR 348
  • Taylor v Secretary of State for Scotland
    (2000) IRLR 502
  • Pepper & Hope Ltd v Daish
    (1980) IRLR 13
  • Lavarack v Woods of Colchester
    (1966) EWCA Civ 4
  • French v Barclays Bank plc
    (1998) IRLR 646
Jurisdiction invoked
Industrial Court Act, section 12(3)(vi) and (viii)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (4)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Isabel Wayua Musau v Copy Cat Limited [2013] KEELRC 579 (KLR)", Case Analysis (2013). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/579/eng@2013-03-15

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