Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCAllowedCause No. 1936 of 2015· [2019] KEELRC 401 (KLR)

Martin Wamae Wangu and 294 others v Bidco Africa Limited (Cause 1936 of 2015) (Employment and Labour) [2019] KEELRC 401 (KLR)

Employment and Labour Relations Court of Kenya
7 November 2019
MOMaureen Onyango
2,916 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled employers cannot shrink terminal benefits through lump-sum PAYE, NSSF/NHIF deductions, or by offsetting ex-gratia payments.

What this practically means

#

Executive summary

#
This is a judgment on quantum in Cause No. 1936 of 2015 before the Employment and Labour Relations Court at Nairobi. By a judgment delivered on 13th July 2018 (Aboudha J.), the claimants, led by Martin Wamae Wangu, were awarded one month's salary in lieu of notice and one month's salary in lieu of leave for each complete year of service from 2009 to 2013, plus costs of the suit; the court made no finding on unfair termination. The parties disagreed on the computation of that award and each submitted tabulations for the court to determine the correct figures. The court noted five defects in the respondent's computation: it had recovered PAYE on the lump sum; it used 21 days' pay for leave instead of one month's salary as ordered; it recovered ex-gratia payments from sums due contrary to the award; it failed to state each employee's years of service and last salary; and it prepared two separate lists of employees despite the judgment applying uniformly to all claimants. The court set out its own computation principles: calculation on actual last gross salary rather than statutory minimum wage; days worked fixed at 30 based on Section 37(2) of the Employment Act (payment for rest days where work exceeds one month); no NSSF or NHIF deductions as claimants were no longer employed; and PAYE recovered on gross monthly pay, not the lump sum. The court attached a table awarding each of the 295 claimants notice pay and leave pay according to years served, totalling Kshs 22,419,653, declared that table the final award of the 13th July 2018 judgment, and awarded the claimants costs of the suit as per the earlier award. Dated, signed and delivered at Nairobi on 7th November 2019 by Maureen Onyango, Judge.

Key legal issues

#
01

Correct computation of the award for notice pay and leave pay

Holding

The respondent's computation was wrong: it deducted PAYE on the lump sum, used 21 days' pay for leave instead of one month's salary, recovered ex-gratia payments from sums due, failed to state years worked and last salary, and created two separate lists despite the judgment applying uniformly to all claimants. The court computed the award on last gross salary, 30 days, no NSSF/NHIF deductions, and PAYE on gross monthly pay.

Reasoning

The court compared the parties' rival computations against its earlier judgment of 13th July 2018. It found the respondent had deviated from the letter of the award by using 21 days' leave pay instead of one month's salary, by offsetting ex-gratia payments contrary to the award, and by applying PAYE to the lump sum. Guided by Section 37(2) of the Employment Act, the court fixed the days worked at 30 and computed the award on actual last gross salary, producing a final award per its table.

p. 2

Legal principles established

#
  • PAYE on an award should be recovered based on gross monthly pay rather than on the lump sum award
  • Where employees work in excess of one month they are entitled to payment for rest days, with days worked calculated at 30 days per Section 37(2) of the Employment Act
  • No NSSF or NHIF deductions are to be made from terminal awards to former employees who are no longer in employment

Court orders

#
  1. 1.Computation of the award based on the actual last gross salary earned by each employee and not the statutory minimum wage
  2. 2.No deduction for NSSF or NHIF from the sums payable to the claimants as they are no longer in the employment of the respondent
  3. 3.Number of days worked calculated at 30 days based on Section 37(2) of the Employment Act
  4. 4.PAYE to be recovered based on the gross monthly pay and not on the lump sum
  5. 5.Award of quantum per the attached table constituting the final award of the judgment dated 13th July 2018 (total award of Kshs 22,419,653)
  6. 6.Claimants awarded costs of the suit as per the award made by the court on 13th July 2018
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (Cause for unfair termination and employment benefits)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Martin Wamae Wangu and 294 others v Bidco Africa Limited (Cause 1936 of 2015)  (Employment and Labour) [2019] KEELRC 401 (KLR)", Case Analysis (2019). Cause No. 1936 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/401/eng@2019-11-07

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