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ELRCPartially AllowedNot stated in the judgment as provided· [2015] KEELRC 135 (KLR)

Kudheiha Workers v Ng’araria Girls Secondary School [2015] KEELRC 135 (KLR)

Employment and Labour Relations Court
4 December 2015
707 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court confirmed that collective bargaining agreements can guarantee retirement benefits beyond NSSF, and ordered a school board to pay staff gratuity with interest.

What this practically means

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Executive summary

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The claimant union filed a memorandum of claim on 12.03.2015 on behalf of six grievants (its members) alleging unfair termination and claiming terminal benefits. The respondent, through the Attorney General's Litigation Counsel F.O. Makori, opposed the suit and sought its dismissal with costs. By consent on 17.07.2015, partial judgment was entered: six months' salary compensation for unfair termination, pay in lieu of notice per the CBA, while gratuity under the CBA and the claim for underpayment were to proceed to full trial. At the hearing on 27.10.2015 the parties agreed on two issues: whether Directorate of Personnel Management circulars applicable to civil servants applied to the grievants (entitling them to underpayment), and whether the grievants were entitled to NSSF and pension/gratuity under the CBA. The issues were to be determined on pleadings, documents and written submissions. The court resolved both issues by adopting its recent judgment between the same parties in Kudheiha Workers v Board of Management, Ng'araria Girls Secondary School [2015]eKLR. It held the circulars did not apply to the grievants, defeating the underpayment claim, and that under sections 35(5) and 35(6) of the Employment Act, 2007 the parties could validly agree in the CBA to gratuity over and above NSSF, the Act being a floor rather than a ceiling. Judgment was entered for the claimant: the respondent to pay the grievants gratuity per clause 31 of the CBA by 31.12.2015, with default interest at court rates from 31.12.2012, plus the claimant's costs of the suit. The suit thus succeeded on the gratuity issue but failed on underpayment.

Key legal issues

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01

Applicability of DPM circulars to the grievants

Holding

The circulars applicable to civil servants did not apply to the grievants; the claim for underpayment failed.

Reasoning

The court adopted its earlier judgment between the same parties in Kudheiha Workers v Board of Management, Ng'araria Girls Secondary School [2015]eKLR, in which it was held that the circulars issued by the Directorate of Personnel Management applied to civil servants only and did not govern the grievants' terms of service under the CBA. Accordingly, the underpayment claim founded on the circulars could not succeed.

p. 2
02

Entitlement to NSSF and gratuity/pension under the CBA

Holding

The grievants were entitled to gratuity per clause 31 of the CBA in addition to NSSF.

Reasoning

Relying on section 35(5) and 35(6) of the Employment Act, 2007, the court held that the parties were entitled to agree in the collective agreement to fix gratuity and that such agreement operated over and above the statutory NSSF entitlement. Section 35(6) does not preclude agreements for retirement benefits over and above NSSF; statutory provisions are a floor, not a ceiling.

p. 3

Legal principles established

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  • The provisions of the Employment Act, 2007 are a floor and not a ceiling; parties may agree in a CBA to more favourable terms including gratuity or pension over and above NSSF.

Court orders

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  1. 1.The respondent to pay the grievants gratuity per clause 31 of the CBA by 31.12.2015 and, in default, interest at court rates payable from the date of retirement on 31.12.2012 till full payment
  2. 2.The respondent to pay the claimant's costs of the suit

Authorities

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Legislation

  • Employment Act, 2007section 35(5)
  • Employment Act, 2007section 35(6), including 35(6)(b)

Cases cited (2)

  • Kudheiha Workers Versus The Board Of Management, Ng'araria Girls Secondary School
    [2015]eKLR
  • Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers Versus Leshau Boys' High School
    [2014]eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over the employment dispute (Employment Act, 2007 and CBA claims); not expressly stated

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, "Kudheiha Workers v Ng’araria Girls Secondary School [2015] KEELRC 135 (KLR)", Case Analysis (2015). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/135/eng@2015-12-04

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