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ELRCOtherCause No 725 of 2015· [2018] KEELRC 1640 (KLR)

Kenya Petroleum Oil Workers Union v Inspectorate East Africa Limited [2018] KEELRC 1640 (KLR)

Employment and Labour Relations Court
6 July 2018
JRJames Rika
738 words in judgment
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The bottom line

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Kenya's Employment Court clarified how redundancy payouts are calculated, ordering an employer to pay the remaining Kshs. 134,052 within seven days.

What this practically means

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Executive summary

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This ruling of the Employment and Labour Relations Court at Mombasa, delivered by James Rika, Judge, on 6 July 2018, resolved a dispute over the computation of sums due under the Court's judgment of 29 September 2017, which had found termination of 5 Grievants to be based on a valid redundancy reason but flawed on procedure. The original orders were: the equivalent of 6 months' gross salary each as compensation for unfair termination; 1 month's gross salary as notice pay; house allowance for 6 months at 15% of basic salary; and 21 days' gross salary as annual leave pay; with no order on costs. The parties disagreed on the resulting figures, the Respondent contending that Kshs. 1,039,325 (which it had paid) settled the decree, while the Claimant asserted a further balance of Kshs. 171,227. The Court declined to engage with the parties' rival arguments, stating it would only revisit its judgment and give an interpretation. Using the parties' pay slips and payroll records, the Court computed each Grievant's 15% house allowance, gross salary (basic plus house allowance), 6 months' compensation, notice pay and 21 days' annual leave pay (at daily rates derived from a 26-day working month), arriving at a total decree of Kshs. 1,173,377. Deducting the Kshs. 1,039,325 already paid, the Court ordered the Respondent to pay the balance of Kshs. 134,052 within 7 days, with execution to issue in default, and made no order on costs.

Key legal issues

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01

Interpretation of the court's own judgment on the computation of awards

Holding

Gross salary for the awards comprises basic salary plus 15% house allowance; each award head is computed on that basis and summed to a total decree of Kshs. 1,173,377.

Reasoning

The Court declined to revisit the parties' rival computations, holding it would only interpret its own judgment. Using pay slips and payroll records, it computed 15% of basic salary as house allowance for 6 months, gross salaries (basic plus house allowance), 6 months' gross salary as compensation for unfair termination, 1 month's gross salary as notice pay, and 21 days' gross salary at daily rate (gross ÷ 26 working days) as annual leave pay, totalling Kshs. 1,173,377.

p. 1
02

Balance payable after partial settlement

Holding

The Respondent having paid Kshs. 1,039,325, the balance of the decree is Kshs. 134,052, payable within 7 days with execution in default.

Reasoning

The Court subtracted the amount the Respondent had already paid to the Claimant from the total decree it computed. The difference of Kshs. 134,052 was ordered to be paid within 7 days, with execution to issue in default of payment.

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Legal principles established

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    Court orders

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    1. 1.The Respondent shall pay to the Claimant the balance of Kshs. 134,052 within 7 days of this ruling, in default execution to issue
    2. 2.No order on the costs
    Jurisdiction invoked
    Court revisiting its own judgment to interpret the orders granted on 29 September 2017

    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, "Kenya Petroleum Oil Workers Union v Inspectorate East Africa Limited [2018] KEELRC 1640 (KLR)", Case Analysis (2018). Cause No 725 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1640/eng@2018-07-06

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