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ELRCPartially AllowedCause No. 504 of 2013· [2015] KEELRC 410 (KLR)

Nomwel Nyakundi Gekone v Riley Services Limited [2015] KEELRC 410 (KLR)

Employment and Labour Relations Court
14 October 2015
1,302 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 ruled that calling a salary 'consolidated' is not enough—employers must expressly state it covers house allowance, or pay it separately.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent as a Security Guard from around 2008/2009 at a monthly salary of Kshs. 10,382.90, resigned on 27th December 2012 claiming he was induced to resign on a promise of payment of outstanding dues. He claimed Kshs. 504,858.88 covering house allowance, overtime, annual leave, travelling allowance, uniform refund, RIFA, soap policy, premium control, public holidays, gratuity and a certificate of service. The Respondent asserted the Claimant was on fixed-term contracts with a consolidated salary, that his terminal dues of Kshs. 13,264 were computed but refused by him, that RIFA was payable only through a separate association, and that gratuity was not payable as he was an NSSF member. It also argued the claim was premature for failure to undergo contractual ADR. The court found the Claimant entitled to house allowance because the contract, though describing the salary as consolidated, was vague and did not expressly state that the salary covered house allowance, awarding 15% of monthly salary for 48 months (Kshs. 74,750). The Respondent having admitted the Claimant took no leave in four years, the court restricted leave pay to one month's salary of the last contract (Kshs. 10,382). Overtime of Kshs. 186,876 was awarded for 3 hours daily on 12-hour shifts. Gratuity was denied due to NSSF membership. RIFA, soap and uniform refunds of Kshs. 13,264.25 were admitted as payable. The court awarded a total of Kshs. 285,272 in terminal dues, ordered issuance of a certificate of service, and granted the Claimant costs of the suit.

Key legal issues

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01

Entitlement to house allowance on a purportedly consolidated salary

Holding

The Claimant is entitled to house allowance at 15% of his monthly salary for 48 months as the contract did not expressly exclude it

Reasoning

The contract submitted stated the salary would be consolidated but left the amount payable blank. Under Section 31 of the Employment Act, exclusion of house allowance must be express. The vagueness of the contract meant the Respondent failed to prove consolidation, so the court computed 15% of the monthly salary for the 48 months served, awarding Kshs. 74,750.

p. 3
02

Annual leave

Holding

The Respondent admitted the Claimant did not go on leave for 4 years; the court restricted the award to one month's salary for the last contract period

Reasoning

The Respondent conceded that the Claimant did not take leave for the four years of service. The court exercised restraint by confining the award to the last contract period, granting one month's salary of Kshs. 10,382 for the one month of leave due under the final contract.

p. 3
03

Overtime

Holding

The Claimant worked 12-hour shifts entailing 3 hours overtime daily and is awarded overtime pay of Kshs. 186,876

Reasoning

There was no denial that the Claimant worked 12-hour shifts, meaning he served 3 hours of overtime daily beyond the ordinary 9-hour structure. The court computed overtime at 3 hours per day over 48 months using the monthly salary, arriving at Kshs. 186,876.

p. 3
04

Gratuity

Holding

Gratuity is not payable because the Claimant was a member of NSSF

Reasoning

Section 35 of the Employment Act provides that service pay is not payable where an employee is a member of a statutory pension or provident fund such as NSSF. Since the Claimant was an NSSF member, his gratuity claim failed.

p. 3

Legal principles established

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  • Payment of house allowance is only excluded where the contract of service expressly provides that the salary covers it; a vague contract attracts an award of house allowance.

Court orders

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  1. 1.Respondent to pay the Claimant Kshs. 285,272/= as terminal dues
  2. 2.Respondent to issue the Claimant with a Certificate of Service
  3. 3.Respondent to pay costs of the suit

Authorities

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Legislation

  • Employment Act 2007Section 31(1) & (2)
  • Employment Act 2007Section 35
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act over employment disputes (Employment Act 2007 invoked)

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, "Nomwel Nyakundi Gekone v Riley Services Limited [2015] KEELRC 410 (KLR)", Case Analysis (2015). Cause No. 504 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/410/eng@2015-10-14

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