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ELRCPartially AllowedMemorandum of Claim dated 30th July 2014, filed 14th August 2014· [2018] KEELRC 1986 (KLR)

Grace Wanjiku Kageni Waiyaki v Pegrume Limited [2018] KEELRC 1986 (KLR)

Employment and Labour Relations Court
4 May 2018
MOMaureen Onyango
977 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court awarded a long-serving employee over Kshs.745,000 in service pay and unremitted loan deductions, but refused claims she couldn't prove with evidence.

What this practically means

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Executive summary

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The claimant, employed by the respondent as Secretary and Personal Assistant to the Managing Director from 2nd July 1990 to 25th June 2011 (21 years), retired with a last salary of Kshs.42,721. She claimed unpaid gratuity at half a month's salary per year worked, salary arrears of Kshs.90,838, an order compelling the respondent to remit unremitted KCB loan check-off deductions to KCB, damages, interest and costs. The respondent filed a defence but did not attend the hearing of its case on 18th December 2017, whereupon the respondent's case was closed; it also failed to attend the mention on 7th February 2018 or file submissions. The court found the facts largely uncontested. Applying Section 35(5) and (6) of the Employment Act, and noting payslips showing no NSSF deductions and no evidence of membership of any pension or gratuity scheme, the court awarded service pay of Kshs.448,570.50 at 15 days' salary per completed year. The salary arrears claim failed for want of proof. On the KCB loan, evidence of default in remitting deductions of Kshs.297,408 (16 months at Kshs.18,588) was accepted and judgment entered for that sum. General damages were refused as unproved, the claimant not having been unfairly terminated and the other claims being liquidated. Judgment totalled Kshs.745,978.50 with interest from the date of filing suit and costs to the claimant.

Key legal issues

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01

Entitlement to service pay/gratuity

Holding

Claimant awarded Kshs.448,570.50 at 15 days' salary per completed year

Reasoning

Section 35(5) of the Employment Act entitles a terminated employee to service pay, but Section 35(6) excludes employees in registered pension or gratuity schemes or NSSF. Payslips showed no NSSF deductions and there was no evidence of any retirement or gratuity scheme membership, so the claimant qualified for service pay computed at 15 days' salary per completed year of service.

p. 3
02

Unremitted KCB loan check-off deductions

Holding

Judgment entered for Kshs.297,408

Reasoning

The respondent deducted loan instalments from the claimant's salary but failed to remit them to KCB from around November 2008 to March 2010. The claimant gave evidence of the amount and annexed a schedule tabulating 16 months of deductions at Kshs.18,588 per month, which stood uncontroverted as the respondent did not attend court.

p. 3
03

General damages

Holding

Prayer dismissed

Reasoning

The claimant did not specify what the general damages related to. She was not unfairly terminated, and her remaining heads of claim were liquidated sums which do not attract general damages. The prayer was therefore not proved and was dismissed.

p. 3

Legal principles established

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  • Where an employee is not a member of a pension, gratuity or NSSF scheme, she is entitled to service pay under Section 35(5) of the Employment Act, computed at 15 days' salary for each completed year of service
  • An employer who deducts loan check-off sums from salary but fails to remit them is liable to pay the employee the unremitted amount
  • Unproved claims for salary arrears fail even where the defence does not testify

Court orders

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  1. 1.Judgment for the claimant for service pay/gratuity of Kshs.448,570.50 calculated at 15 days salary for each completed year of service
  2. 2.Judgment for the claimant against the respondent for Kshs.297,408 being unremitted KCB loan deductions
  3. 3.Total judgment of Kshs.745,978.50
  4. 4.Interest on the sums awarded from the date of filing suit
  5. 5.The respondent to pay the claimant's costs

Authorities

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Legislation

  • Employment ActSection 35(1)(c), 35(5) and (6)
  • Retirement Benefits Actregistered pension or provident fund scheme

Cases cited (2)

  • MAX MASOUD ROSHANKAR & ANOTHER -VS- SKY AERO LIMITED
    [2014] eKLR
  • JOHN MUIRURI KURIA -VS- KENYA PORTS AUTHORITY
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Employment Act)

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, "Grace Wanjiku Kageni Waiyaki v Pegrume Limited [2018] KEELRC 1986 (KLR)", Case Analysis (2018). Memorandum of Claim dated 30th July 2014, filed 14th August 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1986/eng@2018-05-04

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