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ELRCPartially AllowedCause No. 1358 of 2013· [2016] KEELRC 12 (KLR)

Willy Wangecha Wainaina v DH Gray & another [2016] KEELRC 12 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
25 November 2016
2,172 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 awarded a long-serving worker overtime and service pay, but earlier salary advances he owed his employer cancelled out most of the award.

What this practically means

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Executive summary

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The claimant was employed by the 1st respondent at the 2nd respondent's business in July 1988 as a horse caretaker and riding teacher at a monthly pay of Kshs.8,800, retiring on 19th March 2011. He sought half a month's basic pay per working year, overtime for 1988 to 2005 and 2005 to 2011, and service pay, asserting he worked 10 hours a day (later reduced to 9 after a 2005 labour officer complaint) and was paid only Kshs.26,000 of his dues. The respondents admitted employment but denied owing retirement benefits, contending the 1988-2005 overtime was settled at Kshs.26,000 through the labour officer's advice, offering Kshs.29,559 for the later period as goodwill, denying service pay under section 35(5), and counter-claiming Kshs.265,000 in salary and school fees advances acknowledged by the claimant. The court held the 1988-2005 overtime claim settled and time barred, but awarded overtime for January 2006 to March 2011 at 1560 hours x Kshs.37 x 1.5, being Kshs.85,800. Service pay was found due for the full 20 continuous years at 15 days' pay per year, being Kshs.88,000, because no written contract was issued and the claimant became a protected employee under section 37. The counter-claim of Kshs.265,000 was confirmed. The awards were set off against the counter-claim, leaving the claimant to pay the respondents Kshs.91,200. Each party was to bear their own costs.

Key legal issues

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01

Overtime claim for 1988 to 2005

Holding

Claim declined as the dues were settled at Kshs.26,000.00 through the labour officer's arbitration and any challenge is time barred

Reasoning

The labour officer had statutory authority in 2005 to arbitrate employment disputes. The claimant did not deny receiving Kshs.26,000.00 in settlement of overtime for that period. Re-litigating the settled dues would negate the labour officer's powers, offend section 90 of the Employment Act, and amount to double payment. If dissatisfied with the 2005 finding, the claimant was required to lodge his claim then.

p. 3
02

Overtime claim for 2005 to 2011

Holding

Awarded at Kshs.85,800.00 being 1560 hours at an hourly rate of Kshs.37 at 1.5 times

Reasoning

Working hours are regulated under section 27 of the Employment Act; the minimum is 8 hours per day with overtime at 1.5 times the daily basic wage. The claimant worked 6 days a week, 26 days a month, with one hour overtime daily from January 2006 to March 2011, giving 1560 hours. On a monthly wage of Kshs.8,800 the hourly rate is Kshs.37, yielding 1560 x 37 x 1.5 = Kshs.85,800.

p. 3
03

Service pay

Holding

Service pay due for the full 20 years of continuous employment, computed at 15 days' pay per year, totalling Kshs.88,000.00

Reasoning

Service pay is due under section 35(5) read with section 35(6) to an employee whose social security is not addressed in employment. No statutory deductions were remitted before the Employment Act 2007 came into force, and no written contract was issued, so section 37 automatically applied making the claimant a protected employee covered by section 35. The employment ran continuously from 1988 to 2011.

p. 4
04

Respondents' counter-claim

Holding

Counter-claim for Kshs.265,000.00 in salary advances confirmed, set off against the awards to the claimant

Reasoning

The claimant admitted receiving various advances and school fees payments during employment and acknowledged them, and the respondent kept records. No material challenge to the counter-claim was raised. The court confirmed the Kshs.265,000.00 and ordered it set off against the overtime and service pay awards, leaving the claimant to pay Kshs.91,200.00.

p. 4

Legal principles established

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  • A settlement of employment dues effected through the arbitration of a labour officer binds the parties and cannot be relitigated in later proceedings
  • Overtime work beyond the 8-hour minimum working day under section 27 of the Employment Act must be remunerated at 1.5 times the daily basic wage
  • Where no written contract of service is issued as required under sections 8, 9 and 10 of the Employment Act, section 37 applies and the employee becomes a protected employee covered by section 35, including entitlement to service pay for the continuous duration of employment

Court orders

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  1. 1.Overtime due awarded at Kshs.85,800.00
  2. 2.Service pay awarded at Kshs.88,000.00
  3. 3.The above sums shall be paid less what is due in counter-claim
  4. 4.The Respondent is owed by the Claimant in terms of the counter-claim the sum of Kshs.265,000.00
  5. 5.The Claimant shall pay the Respondents dues owing at Kshs.265,000.00 less what is owed in overtime and service pay, all being Kshs.91,200.00
  6. 6.Each party shall bear own costs

Authorities

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Legislation

  • Employment Actsection 35(5)
  • Employment Actsection 35(6)
  • Employment Actsection 90
  • Employment Actsection 27
  • Employment Actsections 8, 9 and 10
  • Employment Actsection 37
  • Retirement Benefits Actregistered pension or provident fund scheme
  • Regulation of Wages Ordersminimum work hours

Cases cited (3)

  • Evans Katiezo Aligulah v Eldomatt Wholesale and Supermarket Ltd
    [2016] eKLR
  • Kennedy Shilaho Shibeka v Chairman, Board of Governors, Sigalagala Technical Training Institute
    [2016] eKLR
  • Livingstone Mutsune 7 another v African Tours & Hotels Limited (in receivership) & another
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (claims for retirement benefits, overtime and service pay)

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, "Willy Wangecha Wainaina v DH Gray & another [2016] KEELRC 12 (KLR)", Case Analysis (2016). Cause No. 1358 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/12/eng@2016-11-25

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