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ELRCPartially AllowedCause No 134 of 2013· [2014] KEELRC 1219 (KLR)

Boniface Muthui Muthei v Rooftech K Limited [2014] KEELRC 1219 (KLR)

Industrial Court of Kenya
8 July 2014
631 words in judgment
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The bottom line

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A Kenyan court ruled that employees contributing to NSSF are not entitled to service pay under the Employment Act, though admitted salary arrears must still be paid.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a technician from 1989, retired voluntarily on 30th August 2010 after giving notice in November 2009. He claimed terminal dues of Kshs. 2,017,440 and a declaration that the Respondent's failure to pay his benefits and remit his NSSF and NHIF contributions was unlawful. The Respondent admitted the employment but asserted that all statutory contributions were duly remitted and that the Claimant was only entitled to Kshs. 22,243 in salary arrears, which he refused to collect. The Court framed two issues: entitlement to service benefits and whether the Respondent remitted the statutory contributions. On the first, the Court held that since the Claimant identified no contractual basis for the claim, it fell under Section 35(5) of the Employment Act, 2007, but as an NSSF member he was excluded from service pay by Section 35(6); the claim was dismissed. On the second, the Court observed that remittances are evidenced by statements from the statutory bodies and, rather than make a definitive finding, directed the Respondent to file updated NSSF and NHIF statements within thirty days and to pay the admitted Kshs. 22,243 within the same period. Each party was ordered to bear its own costs. The award is partially favourable to the Claimant: the substantial service benefits claim failed, while the admitted arrears were ordered paid.

Key legal issues

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01

Entitlement to service benefits

Holding

The claim for service benefits of Kshs. 2,017,440 was dismissed because the Claimant, being an NSSF member, fell outside Section 35(5) of the Employment Act, 2007 by operation of Section 35(6)

Reasoning

The Claimant claimed service benefits of Kshs. 2,017,440 without reference to any specific provision in his terms and conditions of employment. The Court therefore construed the claim as one brought under Section 35(5) of the Employment Act, 2007. However, it was common cause that the Claimant was an NSSF member, and Section 35(6) expressly excludes such employees from entitlement to service pay. The claim accordingly had no basis in law and was dismissed.

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02

Remittance of NSSF and NHIF statutory contributions

Holding

The Court could not determine on the evidence whether remittances were made; it directed the Respondent to obtain and file updated statements from the statutory bodies within 30 days and to pay the admitted sum of Kshs. 22,243

Reasoning

The Claimant alleged non-remittance of NSSF and NHIF contributions while the Respondent contended that all contributions were duly made. The Court noted that statutory contributions are evidenced by statements issued by the respective statutory bodies, and rather than make a final finding on the conflicting accounts, directed the Respondent to obtain and lodge updated statements of account within thirty days, and to pay the admitted amount of Kshs. 22,243 within the same period.

p. 2

Legal principles established

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  • An employee who is a member of NSSF is excluded from the service pay entitlement under Section 35(5) of the Employment Act by virtue of Section 35(6)
  • Statutory contributions to NSSF and NHIF are evidenced by statements issued by those bodies

Court orders

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  1. 1.The claim for service benefits of Kshs. 2,017,440 under Section 35(5) of the Employment Act, 2007 is dismissed
  2. 2.The Respondent to obtain and remit to the Court updated statements of all NSSF and NHIF contributions made on behalf of the Claimant within thirty (30) days from the date of the ruling
  3. 3.The Respondent to pay the admitted amount of Kshs. 22,243 to the Claimant within thirty (30) days
  4. 4.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 35(5)
  • Employment ActSection 35(6)
Jurisdiction invoked
Industrial Court of Kenya jurisdiction under the Industrial Court Act over employment and labour relations disputes

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, "Boniface Muthui Muthei v Rooftech K Limited [2014] KEELRC 1219 (KLR)", Case Analysis (2014). Cause No 134 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1219/eng@2014-07-08

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