Kenya Union of Commercial Food and Allied Workers v Kenya Meat Commission [2020] KEELRC 900 (KLR)
The bottom line
#A Kenyan employment court ruled that gratuity must be calculated on basic pay plus house allowance if the parties agreed to that basis, and employers must prove payments they claim were made.
What this practically means
#Executive summary
#Key legal issues
#Basis for computing the grievants' claims
The correct basis is basic pay plus house allowance, as agreed between the parties; the Respondent's tabulations based on basic pay alone were rejected
The Claimant submitted the parties had agreed that computations would be based on basic pay and house allowance. On examination of the Respondent's final computations, although they appeared to use both, the daily rate was in fact based on basic pay alone. The Respondent did not dispute the Claimant's assertion, and the Claimant did not dispute the actual figures, so the court adopted basic pay plus house allowance and the figures used by the Respondent.
Entitlement to and rate of gratuity for fixed term versus permanent and pensionable employees
David Otieno Anyong'a, whose employment was on fixed terms, is entitled to gratuity at 31% under rule 3.2.3.2 of the HR Manual for 2015 to 2018; the other grievants, being permanent and pensionable, are entitled to 45 days' salary per completed year of service under clause 15 of the CBA
The court examined the contracts adduced and established that all grievants were initially on fixed term contracts; all save David Otieno Anyong'a and Reginelta Khaoma Musungo annexed conversion contracts to permanent and pensionable terms. David's employment was terminated by reference to his 2010 fixed term letter, so the HR Manual rate of 31% applies to him, while the CBA rate of 45 days applies to permanent and pensionable employees.
Period for which gratuity is payable
Gratuity is payable from 2015 to 2018 for all grievants save Nasalio Gitonga Ngurwe, as no evidence showed payments after 17th December 2014; Ngurwe gets 31% from 2010 to October 2012 and 45 days' salary from November 2012 to March 2018
The Respondent annexed a gratuity payment schedule dated 17th December 2014 but adduced no evidence of gratuity payments after that date. For Ngurwe, whose terms changed to permanent and pensionable on 1st October 2012 and who did not appear in the 2010-2014 gratuity schedule, the Respondent similarly failed to prove payment, so the court fixed the applicable periods and rates for each phase of his service.
Legal principles established
#- Where parties agree the basis of computation of terminal benefits, the computations must be made on that agreed basis
- Gratuity entitlement and rate depend on the terms of the contract: fixed term contract employees are governed by the HR Policy Manual rate while permanent and pensionable employees are governed by the CBA rate
- A party asserting that payments were made bears the evidential burden of proving them
Court orders
#- 1.A declaration that the grievants are entitled to gratuity: David Otieno Anyong'a at the rate of 31% of the prevailing rate of basic salary for the period 2015 to 2018 under rule 3.2.3.2 of the Human Resource Manual
- 2.The rest of the grievants (permanent and pensionable employees) are entitled to gratuity at the rate of 45 days' salary applicable at the date of payment for each completed year of service under clause 15 of the CBA, payable from 2015 to 2018 save for Nasalio Gitonga Ngurwe
- 3.Nasalio Gitonga Ngurwe is entitled to gratuity at 31% from 2010 to October 2012 and at 45 days' salary from November 2012 to March 2018
- 4.Gratuity tabulations to be based on basic pay plus house allowance as agreed by the parties
- 5.Parties directed to jointly compute the gratuity in those terms and return to court on 30th July 2020 for adoption of the calculations; failing agreement, each party to file its tabulation on or before that date for the court's assessment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the claim for unlawful termination (not expressly stated; judgment delivered under Article 159(2)(d) and Article 48 of the Constitution as to mode of delivery)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Commercial Food and Allied Workers v Kenya Meat Commission [2020] KEELRC 900 (KLR)", Case Analysis (2020). Cause No 1625 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/900/eng@2020-06-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.