Electine Merina Bwire & another v Krystalline Salt Limited [2018] KEELRC 2501 (KLR)
The bottom line
#A Kenyan court confirmed employers may deduct statutory taxes from Employment Act settlement payments, blocking an auctioneer's attempt to seize property.
What this practically means
#Executive summary
#Key legal issues
#Whether consent judgment payments were subject to statutory deductions
Yes. The consent set out specific payments under section 49 of the Employment Act, which are subject to statutory deductions, so the Applicant was entitled to deduct and remit the Kshs. 121,125 to the Kenya Revenue Authority.
The consent dated 28th June 2017 provided for severance pay, three months' compensation and a balance owing, all being payments under section 49 of the Employment Act. Section 49(2) expressly provides that any payments made under that section are subject to statutory deductions. The Applicant was therefore legally bound to deduct and remit the tax, and the shortfall of Kshs. 121,125 was properly accounted for by proof of remittance to the Kenya Revenue Authority.
Whether execution could properly proceed after full settlement of the consent amount
No. Having received explanation and proof of the statutory remittances, the Respondents had no reason to proceed with execution, and the warrants of attachment were properly restrained.
The Applicant paid Kshs. 332,622 and provided proof of payment of Kshs. 121,125 to the Kenya Revenue Authority, accounting for the full consent amount less statutory deductions. The court, adopting the position in Javan Were Mbango v H. Young & Co (EA) Ltd, held that the employer was entitled to make deductions authorized by written law, leaving the Respondents without basis for execution.
Legal principles established
#- Payments under section 49(2) of the Employment Act are subject to statutory deductions, which the employer is legally obliged to make and remit to the relevant authority.
- An employer is entitled to deduct any amount authorized by any written law for the time being in force.
Court orders
#- 1.A permanent injunction restraining the Claimant and the 2nd Respondent, their servants or agents, from executing the warrants of attachment issued to the 2nd Respondent against the Applicant
- 2.The matter to be marked as settled
- 3.The 1st and 2nd Respondents to pay the costs of the application
- Jurisdiction invoked
- Inherent jurisdiction of the Employment and Labour Relations Court over a matter in which a consent judgment had been recorded; application by Notice of Motion under certificate of urgency
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Electine Merina Bwire & another v Krystalline Salt Limited [2018] KEELRC 2501 (KLR)", Case Analysis (2018). Cause No 2134 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2501/eng@2018-01-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.