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ELRCPartially AllowedNot stated in the judgment as supplied· [2016] KEELRC 1484 (KLR)

Seremwai Estates Company Limited v Esther Wanjiru Wanjau [2016] KEELRC 1484 (KLR)

Employment and Labour Relations Court (implied from Industrial Court jurisdiction findings; court name not printed in the supplied judgment)
24 March 2016
BOByram Ongaya
578 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court set aside a Kshs 222,215 award, holding employment disputes belong to the Industrial Court and NSSF contributions bar gratuity claims.

What this practically means

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Executive summary

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The appellant, the defendant in the trial court, appealed against a judgment delivered on 5.04.2011 by the trial magistrate awarding the respondent, the plaintiff, terminal dues of Kshs. 222,215.00 comprising salary arrears, leave days, house allowance, gratuity, underpayment and leave travelling allowance, plus costs and interest. The respondent had sued claiming she was forced to terminate her services because of unpaid salaries, and the trial court entered judgment for her as prayed in the plaint. The appeal succeeded on three findings. First, the trial court erred in awarding house and leave allowances based on a collective agreement, as the respondent was not a trade union member and no collective agreement bound the parties. Second, the trial court erred in awarding gratuity, since N.S.S.F contributions had been made for the respondent, barring service pay or gratuity under section 35(6)(d) of the Employment Act, 2007. Third, and decisively, the cause of action was founded on constructive unfair termination; section 47(1) of the Employment Act required a complaint to a labour officer within three months, and in any event section 87(2) of the Employment Act and section 12(1) of the Labour Institutions Act, 2007 vested exclusive jurisdiction in the Industrial Court, so the trial court lacked jurisdiction. The court therefore allowed the appeal, set aside the trial judgment and decree and all processes flowing from them, and awarded the costs of the appeal to the appellant.

Key legal issues

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01

Entitlement to house allowance and leave allowance under a collective agreement

Holding

The trial court erred in relying on a collective agreement because the respondent was not a member of the trade union and no collective agreement bound the parties

Reasoning

The court found the evidence clear that the respondent was not a union member. Findings on house and leave allowances had therefore been made on the basis of a collective agreement that did not bind the parties, making them an error of law and fact.

p. 1
02

Entitlement to gratuity/service pay

Holding

The trial court erred in awarding gratuity because N.S.S.F contributions had been made, defeating entitlement under section 35(6)(d) of the Employment Act

Reasoning

It was not disputed that N.S.S.F contributions were made for the respondent. Under section 35(6)(d) of the Employment Act, 2007 an employee for whom statutory contributions are made is not entitled to service pay or gratuity, so the trial court's award was erroneous.

p. 1
03

Jurisdiction of the trial court over an employment dispute founded on constructive unfair termination

Holding

The trial court lacked jurisdiction; such disputes fell within the exclusive jurisdiction of the Industrial Court under section 87(2) of the Employment Act and section 12(1) of the Labour Institutions Act, 2007

Reasoning

The cause of action was constructive unfair termination. Section 47(1) required a complaint to a labour officer within 3 months; alternatively, section 87(2) of the Employment Act and section 12(1) of the Labour Institutions Act, 2007 vested exclusive jurisdiction in the Industrial Court, so the magistrate's court lacked jurisdiction to hear the suit.

p. 2

Legal principles established

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  • Service pay or gratuity is not payable where statutory contributions such as N.S.S.F have been made for the employee under section 35(6)(d) of the Employment Act, 2007
  • Complaints about constructive unfair termination must first be made to a labour officer within 3 months under section 47(1) of the Employment Act, 2007, alternatively filed in the Industrial Court
  • The Industrial Court had exclusive jurisdiction over disputes of rights and liabilities between employers and employees; subordinate courts lack jurisdiction over such disputes

Court orders

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  1. 1.That the appeal is hereby allowed
  2. 2.That the judgment and decree by the trial court and all processes flowing from there are hereby set aside
  3. 3.The costs of the appeal are awarded to the appellant

Authorities

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Legislation

  • Employment Actsection 35(6)(d)
  • Employment Actsection 47(1)
  • Employment Actsection 87(1) and 87(2)
  • Labour Institutions Actsection 12(1)
On appeal from
Trial magistrates' court (honourable trial magistrate)
Not stated
Jurisdiction invoked
First appellate jurisdiction; appeal against the judgment and decree of the trial magistrate

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, "Seremwai Estates Company Limited v Esther Wanjiru Wanjau [2016] KEELRC 1484 (KLR)", Case Analysis (2016). Not stated in the judgment as supplied. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1484/eng@2016-03-24

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