Michael Waweru Wainaina v Bamburi Cement Limited [2015] KEELRC 1080 (KLR)

Industrial Court of Kenya at Mombasa

22 May 2015

JRJames Rika

668 words in judgment

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The bottom line

A Bamburi Cement retiree lost his claim for interest on delayed gratuity because payment depended on his own acceptance and caused him no loss.

What this practically means

Executive summary

The Claimant, a Brick Layer Foreman, worked for the Respondent for 32 years between 1975 and 2007 and retired on attaining the age of 55 years on 1st January 2008. He was paid gratuity of Kshs.1,864,235.10 on 20th August 2010 and Kshs.143,126.90 on 5th May 2011. By a Statement of Claim filed on 2nd November 2012 he disputed the mode of computing gratuity, contending that his terms and conditions for the unionisable years 1975 to 1989 should have been based on the CBA rather than the Pension Scheme, and that computing gratuity for the whole 32 years on the Pension Scheme denied him gratuity for the union years. In submissions filed on 27th November 2014 he abandoned that argument, confining his claim to compensation for late payment and interest on the withheld sums. The Respondent maintained that all rightful dues were paid under the Pension Scheme rules, that payment depended on the Claimant signing acceptance forms, and that the benefits were computed up to the date of payment so no loss was suffered. The Court found that the computation issue was abandoned for good reason, as the Pension Scheme rules applied from 1989 and the Claimant had accepted transfer of gratuity for the unionisable period. The Court held that an order for interest was not justifiable because payment depended on the Claimant's own acceptance and he suffered no prejudice, computation being pegged to the date of payment. The claim was dismissed with no order on costs.

Key legal issues

Mode of computation of gratuity

Holding

The grievance was abandoned and, in any event, the Pension Scheme rules properly applied from 1989 and the Claimant accepted the transfer of gratuity for the unionisable period

Reasoning

The Claimant initially contended that the CBA should have applied to the unionisable years 1975 to 1989. In submissions he abandoned that argument. The material showed the Pension Scheme rules applied for the period in management from 1989, and the Claimant signed a document on 6th August 2010 accepting transfer of gratuity for the period served as a unionisable employee.

p. 2

Whether interest lies for late payment of gratuity

Holding

No interest was payable because payment depended on the employee's acceptance and no prejudice was suffered

Reasoning

The Respondent explained the delay: payment could only be made once the employee signed the acceptance form. The Claimant accepted on 6th August 2010 and was paid on 10th August 2010; he accepted again on 10th March 2011 and received final payment on 5th May 2011. Computation was pegged to the date of payment, not retirement, so the Claimant suffered no loss.

p. 2

Legal principles established

An order for interest on delayed payment of employment benefits is not justifiable where payment depended on the employee's own acceptance and the computation was pegged to the date of payment rather than the date of retirement.

Court orders

1.The claim is dismissed with no order on the costs

Authorities

Legislation

Industrial Court (Procedure) Rules 2010Rule 27(1)(a)

Jurisdiction invoked: Industrial Court jurisdiction over disputes in the issue in dispute: terminal benefits, under the Industrial Court (Procedure) Rules 2010, Rule 27(1)(a)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Michael Waweru Wainaina v Bamburi Cement Limited [2015] KEELRC 1080 (KLR)", Case Analysis (2015). Cause Number 162 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1080/eng@2015-05-22

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