Kenya Shipping, Clearing & Warehouses Workers Union v M/S Grain Bulk Handlers Limited [2017] KEELRC 1716 (KLR)
The bottom line
#A Kenyan employment court ruled that employees who resign get no gratuity or severance pay unless their contract or a collective agreement clearly promises it.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to gratuity absent contractual or collective provision
The claim for gratuity failed because no Collective Agreement or contract clause provided for it, and the service gratuity paid to other employees was severance pay on redundancy, not gratuity on resignation.
The court found no Collective Agreement between the parties and no clause in the Grievants' contracts granting gratuity. The pay statements of employees who received 'service gratuity' showed they left on redundancy, so the payment was severance pay under Section 40 of the Employment Act. The Grievants resigned voluntarily and therefore did not merit such severance pay.
Proper exhaustion of the conciliation process
The conciliation process could not be said to have failed to resolve the dispute in full because no certificate was issued under Section 69 of the Labour Relations Act 2007 stating the gratuity aspect remained unresolved; the claim was thus improperly filed.
The parties agreed on computation of terminal dues before the Conciliator, and the Union was directed to furnish documents supporting the gratuity claim but never did. Without a Section 69 certificate from the Conciliator confirming the gratuity aspect remained unresolved, the court could not accept the claim as properly before it, and the Union had also not complied with Rule 6 of the retired Industrial Court (Procedure) Rules 2010.
Respondent's counterclaim for notice pay and annual leave pay
The counterclaim for one month's notice pay was allowed since the Grievants conceded they resigned without notice; the claim for annual leave pay was declined for lack of support on the record.
The Claimant conceded the Grievants resigned without issuing notice to the Employer, so recovery of one month's salary in lieu of notice was justified. The annual leave pay recovery, however, was not supported through the pleadings, documents and submissions, and was therefore declined.
Legal principles established
#- Gratuity is payable only where a Collective Agreement or individual contract of employment makes provision for it.
- Employees who resign are not entitled to severance pay for redundancy under Section 40 of the Employment Act.
- Employees subscribed to the N.S.S.F are ineligible for service pay under Section 35(6) of the Employment Act.
Court orders
#- 1.The Claim is rejected
- 2.The Counter-Claim is partly allowed
- 3.The Grievants shall pay to the Respondent 1 month salary each, in lieu of notice
- 4.No order on the costs
- Jurisdiction invoked
- Employment and labour relations jurisdiction; Claim presented under Rule 6 of the retired Industrial Court (Procedure) Rules 2010 and the Labour Relations Act 2007
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.
- Angela Kageni v Susan Adhiambo Odongo & another [2019] KEELC 3855 (KLR)[2019] KEELC 3855 (KLR)3 Apr 2019
Cite this brief
#Cite this brief
Caselaw, "Kenya Shipping, Clearing & Warehouses Workers Union v M/S Grain Bulk Handlers Limited [2017] KEELRC 1716 (KLR)", Case Analysis (2017). Cause Number 365 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2017/1716/eng@2017-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.