Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 1342 of 2012· [2016] KEELRC 1181 (KLR)

David Mutiso v City Clock (K) Limited [2016] KEELRC 1181 (KLR)

Employment and Labour Relations Court
11 May 2016
3,361 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

#

A Kenyan employer was ordered to pay a retired employee Kshs 855,000 because it could not renege on a signed exit agreement promising terminal benefits.

What this practically means

#

Executive summary

#
The Claimant, employed from January 1993 and deployed to Uganda and later Tanzania within the City Clock group, retired in December 2010 after 18 years of service. He claimed unpaid salary (2002-2005), leave allowance, house allowance, overtime, service pay, gratuity, hardship allowance, a 10% shareholding allegedly promised verbally, travelling expenses and general damages of Kshs. 30,000,000. The Respondent denied the unpaid salary and shareholding allegations, contended the salaries were consolidated, that the Claimant took his leave and was paid in lieu, that NSSF membership barred service pay and gratuity, and filed a counterclaim for USD 9,575 in travelling and storage expenses arising from the Claimant's failure to clear his accounts and vacate company quarters in Dar es Salaam. The court framed three issues: the nature of the employment relationship, its termination, and the remedies available. It found on the payslips that the Claimant worked for City Clock (K) Limited throughout and that he retired in December 2010. Applying the letter of 14.3.2011 signed by both parties, the court held the Respondent could not renege on the agreed ex-gratia payment of 15 days per completed year despite NSSF membership, awarding Kshs. 855,000 (½ x 95,000 x 18) less statutory deductions, with interest at court rates from the date of retirement. The leave claim failed as leave was taken or paid in lieu. The counterclaim was dismissed for want of receipts proving the storage and travel expenses. The claimant otherwise obtained only the ex-gratia award, and the Respondent was ordered to meet the costs of the suit.

Key legal issues

#
01

Nature of the employment relationship despite separate entities in Uganda and Tanzania

Holding

The Claimant was held to have worked for City Clock (K) Limited throughout, since his payslips in Uganda and Tanzania were titled City Clock (K) Limited, and retirement in December 2010 was accepted by the Respondent

Reasoning

Although the appointment letters were distinct documents with City Clock Uganda and City Clock Tanzania, all were signed by the same Managing Director, W. Proske, and the payslips were titled City Clock (K) Limited. The Respondent's Group Chief Executive accepted the retirement by letter dated 14.3.2011, confirming the employment relationship and its termination by retirement after 18 years of service.

p. 6
02

Entitlement to terminal benefits (ex-gratia/service pay)

Holding

The Claimant was entitled to the ex-gratia payment of 15 calendar days' pay per completed year of service as agreed in the letter of 14.3.2011, computed as ½ x 95,000 x 18 = Kshs. 855,000 less statutory deductions

Reasoning

The Respondent's letter of 14.3.2011 acknowledged that on retirement the Claimant would be paid salary for days worked, leave dues if any, and an ex-gratia payment of 15 days for each completed year of service. The Claimant signed the letter agreeing to those terms. Having agreed to these benefits, the Respondent could not resile from the agreement by invoking NSSF membership as a bar to service pay.

p. 6
03

Claim for pending leave

Holding

The claim for leave failed because the Claimant took approved leave over the years and was paid a full month's salary in lieu of the final leave applied for on 8/11/2010

Reasoning

The Respondent produced leave application and approval documents from 30.6.2003 to November 2010. For the final leave applied for on 8/11/2010, the Claimant was paid a full month's salary in lieu of proceeding on leave, so no leave was pending at termination and nothing was payable under that head.

p. 7
04

Respondent's counterclaim for USD 9,575

Holding

The counterclaim was dismissed for failure of proof

Reasoning

The Respondent claimed travelling expenses for three executives and storage charges of USD 200 per month for 16 months. However, no receipts of payment of these amounts were produced. Since the counterclaimant bears the burden of proving its loss, the counterclaim failed on that account.

p. 7

Legal principles established

#
  • Where an employer has agreed in writing, signed by both parties, to pay specified terminal benefits, it cannot renege on that agreement by relying on statutory disqualifications such as NSSF membership
  • A counterclaimant bears the burden of proving the amount claimed; unproven storage and travel expenses are not recoverable

Court orders

#
  1. 1.The Respondent to pay the Claimant ex-gratia payment of 15 calendar days for each completed year of service, calculated as ½ x 95,000 x 18 = Kshs. 855,000, less statutory deductions
  2. 2.The ex-gratia payment to attract interest at court rates with effect from the date of retirement till payment in full
  3. 3.The Respondent to meet the costs of the suit

Authorities

#

Legislation

  • Employment Act 2007Section 28(1)(a)
  • Employment Act 2007Section 31
  • Employment Act 2007Section 35(5)
  • Employment Act 2007Section 35(6)

Cases cited (8)

  • Elijah Kipkoros Tonui v. Ngara Opticians t/a Bright Eyes Limited
  • David Getare Nyangau v Houseman General Contractors Ltd [2013] eKLR
    2013 eKLR
  • Techno Service Limited v Michael Karue Wachira [2013] eKLR
    2013 eKLR
  • Kenya Ferry Service Limited v Dock Workers Union (Ferry Branch) [2015]
    2015
  • Samson Mwangi Gaita v Kensalt [2013] eKLR
    2013 eKLR
  • George Assey v Mabati Rolling Mills Ltd [2014] eKLR
    2014 eKLR
  • Albert Ouma Okeyo v Maguna Andu Self Selection Stores LTD [2013]
    2013
  • Nocholus Lihugu Bwumira v Colette Gureshi t/a Wild Earth Wellness Centre Limited [2016] eKLR
    2016 eKLR
Jurisdiction invoked
Article 162(2) of the Constitution establishing the Employment and Labour Relations Court (employment dispute filed as a Memorandum of Claim under the Employment Act)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "David Mutiso v City Clock (K) Limited [2016] KEELRC 1181 (KLR)", Case Analysis (2016). Cause No. 1342 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1181/eng@2016-05-11

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