Elly Ouma Hongo v Kenya National Union of Teachers - Kisumu East Branch & 5 others [2016] KEELRC 1415 (KLR)
The bottom line
#A Kenyan union had to pay Kshs.578,635 because it could not prove tax payments with official KRA receipts and proper records.
What this practically means
#Executive summary
#Key legal issues
#Whether payments to KRA could be credited against the decretal sum
The 1st Respondent failed to prove the KRA payments; only Kshs.2,437,513.70 was paid, leaving Kshs.578,635.30 outstanding
The court noted a letter from a KRA manager is not confirmation of receipt; there was no official receipt, no tabulation and no mention of the remittance manner. The consent covered multiple heads not all taxable at a flat 30%, and section 49(2) of the Employment Act did not apply to the consent award as agreed. The Employer's Guide to PAYE prescribes taxation per head of payment.
Relevance of Hosea Njeru Kagondu and Paul Ngolwa on statutory deductions
Distinguished as inapplicable because the consent was not limited to section 49(1) awards
The court held the authorities concerned awards under section 49(1) of the Employment Act, whereas the consent agreement here comprised various heads including severance and lump sum payments not limited to section 49(1). Further, the whole amount was not demonstrably subject to income tax at 30%.
Whether garnishee orders made on a date listed for mention should be set aside
No - the issue was moot and the orders were made by consent
Although the Claimant had erroneously served a mention notice, both parties attended court on 27th April 2015 and the orders were granted by consent. Given the findings on the balance due, the procedural complaint had been overtaken by events and the Omega Enterprises and Floriculture authorities were not determinative.
Legal principles established
#- A party alleging payment of income tax on decretal sums must prove payment by an official KRA receipt accompanied by a breakdown compliant with the Employer's Guide to PAYE
- Where an employer fails to issue an itemised pay statement as required by section 20 of the Employment Act, it bears the burden of proving that payments were not based on net pay after taxation
Court orders
#- 1.Dismissal of the 1st Respondent's notice of motion dated 15th May 2015
- 2.1st Respondent to pay the Claimant Shs.578,635.30 being the balance of the decretal sum
- 3.Garnishee order absolute attaching the Kenya Union of Teachers Kisumu East Branch Account No.11609 at Kisumu Teachers Savings and Credit Co-operative Society for Kshs.578,635.30 payable to the Claimant's Account No.1126231147 at Kenya Commercial Bank Limited, Kisumu Branch
- 4.Respondents to pay the Claimant's costs of both applications
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the causes settled by consent; not expressly stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Enock Anyango Anyanga & another v Kenya Union of Saving and Credit Co-operative Limited [2015] KEELRC 602 (KLR)[2015] KEELRC 602 (KLR)17 Jul 2015
Cite this brief
#Cite this brief
Caselaw, "Elly Ouma Hongo v Kenya National Union of Teachers - Kisumu East Branch & 5 others [2016] KEELRC 1415 (KLR)", Case Analysis (2016). Cause No. 791(N) of 2009 (with related Cause No. 897 of 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1415/eng@2016-03-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.