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ELRCDismissed· [2018] KEELRC 523 (KLR)

Joseph Mwanzia Mutie v Khetshi Dharamshi & Co Limited [2018] KEELRC 523 (KLR)

Employment and Labour Relations Court
23 November 2018
BOBYRAM ONGAYA
323 words in judgment
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The bottom line

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Kenyan employees contributing to NSSF are not entitled to service pay when their employment ends, so long as the contract says nothing more.

What this practically means

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Executive summary

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The claimant, employed by the respondent on 01.02.1998 as an Accounts Assistant and later promoted to Supervisor, Accounts Department, resigned by serving one month's notice on 01.02.2012, with termination effective 29.02.2012 after 14 years of service. His final dues were computed by the respondent at Kshs. 6,554.00. By a memorandum of claim filed on 26.03.2013, he sought Kshs. 406,037.00 as service or severance dues and benefits, plus costs and interest, alleging violation of section 35(5) of the Employment Act, 2007 through non-payment of service pay. The respondent, in its memorandum of response filed on 05.06.2013, sought dismissal of the claim with costs, contending that service pay was expressly excluded under section 35(6) of the Act because the claimant was a member of the National Social Security Fund, and that no contractual term provided for service pay beyond the statutory provisions. The court accepted the respondent's position, holding there was no justifiable reason to disturb its submissions. Judgment was entered for the respondent, dismissing the claimant's memorandum of claim with costs. The judgment was delivered at Nairobi on 23rd November 2018 by Byram Ongaya, Judge.

Key legal issues

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01

Whether service pay was payable upon termination of a 14-year contract of service

Holding

The claim is dismissed; service pay was excluded because the claimant was a member of the NSSF and no contractual term provided for service pay beyond the statutory provisions

Reasoning

The claimant, who resigned by serving one month's notice effective 29.02.2012 after 14 years of service, claimed service pay under section 35(5) of the Employment Act. The respondent contended that section 35(6) excluded service pay for NSSF members. The court found the exclusion applied since the claimant's NSSF membership was undisputed and no contract term provided for service pay beyond the statute, and declined to disturb the respondent's submissions.

p. 2

Legal principles established

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  • Service pay under section 35(5) of the Employment Act, 2007 is not payable to an employee who is a member of the National Social Security Fund, per section 35(6)

Court orders

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  1. 1.Judgment entered for the respondent against the claimant for dismissal of the claimant's memorandum of claim
  2. 2.Costs of the claim awarded to the respondent

Authorities

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Legislation

  • Employment Act, 2007section 35(5)
  • Employment Act, 2007section 35(6)
Jurisdiction invoked
not stated in the judgment; the claim arises under section 35 of the Employment Act, 2007

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, "Joseph Mwanzia Mutie v Khetshi Dharamshi & Co Limited [2018] KEELRC 523 (KLR)", Case Analysis (2018). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/523/eng@2018-11-23

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