Samuel Kamau Muhindi v Invesco Assurance Co.Ltd [2014] KEELRC 436 (KLR)
The bottom line
#Kenya's Industrial Court ordered a company in receivership to pay its former CEO over KSh 6.8 million in unpaid terminal dues, pension, costs and interest.
What this practically means
#Executive summary
#Key legal issues
#Existence of contract of employment
A written contract existed between the parties dated 4th August 2005
The Respondent denied the contract on the basis that the Claimant pleaded two different, incorrect dates. However, the Claimant produced the actual contract in his supplementary statement of claim, which confirmed the date as 4th August 2005. The Respondent did not contest the genuineness of the document. The court held that pleadings can be confirmed or controverted by evidence, and the conflicting dates were mere mistakes clarified by the document.
Payment of terminal dues
The Respondent did not pay the Claimant terminal dues of Kshs. 6,430,259
The discharge voucher confirmed only the computation of terminal dues, not payment, and the covering letter asked the Claimant to sign signifying agreement to the computations. The Respondent's bundle of documents related to expenses predating the resignation and none evidenced payment of terminal dues. The agreed mode of payment (initial Shs. 1 million plus six installments) was never implemented.
Allegations of professional breach, negligence and malpractice
The allegations failed for want of evidence and were irrelevant to entitlement to terminal dues
The Respondent adduced no evidence to prove the allegations. Moreover, the terminal dues arose from a negotiated settlement following resignation and were payable whether the resignation was voluntary or compelled. Part payment of Shs. 1 million with an agreement to pay the balance in installments confirmed the liability.
Effect of 'without prejudice' wording
The words became spent upon acceptance of the offer
The court agreed with Wa Makau J in Millicent Wambui v Nairobi Botanica Gardening Limited that 'without prejudice' protects an offeror where no agreement is reached. Once the Claimant accepted the offer and other documents confirmed it, the protection fell away and did not affect his entitlement to terminal dues.
Arbitration clause
It was too late to invoke arbitration at the submissions stage
Section 6 of the Arbitration Act requires a party seeking stay pending arbitration to apply before filing a defence. The Respondent raised arbitration only in written submissions after filing its defence, so the objection came too late.
Limitation period
The claim was filed within the six-year limitation period for contract claims
The Employment Act 2007's three-year limitation did not apply because the cause of action arose before that Act was enacted. The six-year period under the Limitation of Actions Act for contracts applied. The Claimant resigned on 9th March 2007 and filed on 3rd June 2011, just over four years later.
Legal principles established
#- A discharge voucher confirming only the computation of terminal dues is not evidence of payment of those dues
- The words 'without prejudice' in an offer cease to have effect once the offer is accepted
- An application for stay pending arbitration under Section 6 of the Arbitration Act must be made before a defence is filed
- A claimant who has ceased to be a member of a pension scheme is entitled to unremitted pension contributions directly from the employer
Court orders
#- 1.Judgment entered for the Claimant against the Respondent in the sum of Kshs. 6,829,876
- 2.Costs of the claim awarded to the Claimant
- 3.Interest on the judgment sum from the date of judgment at court rates
- Jurisdiction invoked
- Industrial Court jurisdiction over employment and terminal dues claims
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samuel Kamau Muhindi v Invesco Assurance Co.Ltd [2014] KEELRC 436 (KLR)", Case Analysis (2014). Industrial Cause (Statement of Claim dated 31st May 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/436/eng@2014-05-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.