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ELRCPartially AllowedCause No 42 of 2015· [2015] KEELRC 232 (KLR)

Kudheiha Workers v Board of Management, Ng’araria Girls Secondary School [2015] KEELRC 232 (KLR)

Employment and Labour Relations Court
20 November 2015
BOByram Ongaya
993 words in judgment
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The bottom line

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A Kenyan court ruled that a retired cook was owed Kshs.79,050 in unpaid gratuity under his collective agreement, which overrides NSSF-only arguments.

What this practically means

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Executive summary

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The claimant union, acting for its member Julius Kagiri Kang'ethe (the grievant), sued the respondent alleging refusal to pay retirement benefits contrary to clause 31 of the applicable collective agreement. By consent, two issues were framed: whether the grievant was underpaid, and whether he was entitled to gratuity under the collective agreement. The grievant, a cook of 21 years' service who retired in December 2012 at a monthly pay of Kshs.8,259, relied on Directorate of Personnel Management circulars to claim house allowance arrears and higher pay, and claimed underpayment of gratuity despite payments of Kshs.8,259 and Kshs.86,130. The respondent, through counsel for the Attorney General, contended the circulars did not apply and that the gratuity paid sufficed. The court held that the collective agreement governed the employment and the circular-based underpayment claims failed. On gratuity, clause 31 provided for gratuity at one twelfth of each completed month of service on current salary, yielding Kshs.173,439 for 21 years; after deducting amounts already paid, Kshs.79,050 remained unpaid. The court held that section 35(5) and 35(6) of the Employment Act permit parties to agree on gratuity over and above NSSF, the Act being a floor rather than a ceiling, and followed its earlier Leshau Boys' High School ruling. Judgment was entered for the claimant for Kshs.79,050 with default interest from 31.12.2012, plus costs.

Key legal issues

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01

Whether the grievant was underpaid by reference to DPM circulars

Holding

The claim for underpayment fails; the collective agreement, not the circulars, governed the grievant's employment.

Reasoning

The court found that the collective agreement applied to the grievant's employment as a cook. Although the grievant relied on circulars issued by the Directorate of Personnel Management for house allowance and wage claims, he did not establish any basis on which those circulars would apply to his service, particularly where his letter of appointment did not even state a job group.

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02

Whether the grievant is entitled to gratuity under the collective agreement despite NSSF membership

Holding

Yes; the grievant is entitled to unpaid gratuity of Kshs.79,050.00 under clause 31 of the collective agreement.

Reasoning

Clause 31 of the collective agreement provided gratuity at one twelfth of each completed month of service based on current salary. Section 35(6)(b) of the Employment Act contemplates gratuity under a collective agreement, so the parties were entitled to agree on such benefits over and above NSSF entitlements expressly provided in clause 29. Computed at Kshs.8,259 per month for 21 years, the total of Kshs.173,439.00 less amounts already paid leaves Kshs.79,050.00.

p. 2

Legal principles established

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  • Section 35(6) of the Employment Act, 2007 does not preclude parties from agreeing on retirement benefits or gratuity over and above the statutory NSSF arrangement; the Act's provisions are a floor, not a ceiling.

Court orders

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  1. 1.The respondent to pay the grievant Kshs.79,050.00 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)

Cases cited (1)

  • 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 employment disputes under the Employment Act, 2007 (section 35(5) and 35(6) applied)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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

Cite this brief

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Cite this brief

Caselaw, "Kudheiha Workers v Board of Management, Ng’araria Girls Secondary School [2015] KEELRC 232 (KLR)", Case Analysis (2015). Cause No 42 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/232/eng@2015-11-20

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