Julius Wahome Ndirangu & another v Muki Sacco Society Limited; Co-operative Bank of Kenya (Garnishee) [2020] KEELRC 1402 (KLR)
The bottom line
#A Kenyan court allowed an employee to seize his employer's bank funds for an unpaid award, but only after mandatory statutory deductions.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to garnishee order nisi where the garnishee holds deposits to the credit of the judgment debtor
The claimant as judgment creditor is entitled to attachment of monies held by the garnishee on the judgment debtor's behalf; the garnishee was duly served and did not attend
Order 23 Rule 1 permits the court, on ex parte application supported by affidavit showing an unsatisfied decree and a third party indebted to the judgment debtor, to attach such debts. The affidavit of service confirmed service on the garnishee which failed to appear. The account holds sufficient credit to satisfy the decretal sum plus costs.
Statutory deductions from the decretal sum under section 49(2) of the Employment Act, 2007
The decretal sum is payable only after statutory deductions; the employer must retain and remit the dues and issue P9 forms
Section 49(2) provides that payments under the section are subject to statutory deductions. This is mandatory. Where an award is within the taxable bracket, deductions must precede payment. The judgment of 14 November 2019 was itself made subject to sections 49(2) and 19 of the Employment Act, 2007.
Whether loan debts claimed by the judgment debtor, including under the Co-operative Tribunal decree, may be offset against the decretal sum
No offset allowed; the Tribunal decree amounts are at variance with the sums demanded and the employment-related facilities were never determined; separate execution applies
The Tribunal case was filed after the present suit, its decree of Ksh.3,718,825 differs from the Ksh.5,672,021.45 demanded, and the pleadings were not attached. The facilities advanced as an employee were not gone into by the court; those advanced under Sacco membership are regulated under a different regime. Applying the Tribunal proceedings here would take undue advantage of the claimant.
Legal principles established
#- Where an award falls within the taxable bracket, statutory deductions under section 49(2) of the Employment Act must be effected before the employee is paid
- Under section 19(f) and (h) of the Employment Act, an employer may deduct amounts authorised by written law, court order, arbitration award, or loan repayments under a written agreement, the latter not exceeding fifty percent of wages
- A decree obtained in separate proceedings before another tribunal cannot be deployed in garnishee proceedings without distinguishing the nature of the monies advanced; execution on that decree should follow separately
Court orders
#- 1.The decretal sum shall be subjected to statutory deductions and the judgment creditor shall be paid the total sum due plus costs
- 2.Costs for the garnishee proceedings shall be released by the garnishee to the claimant's advocates forthwith from the deposits held in the attached account No.01120037908500 Engineer Branch to the credit of the judgment debtor
- 3.The orders apply to ELRC Cause No. 49 of 2017 as consolidated
- Jurisdiction invoked
- Rule 32 of the Employment and Labour Relations Court (Procedure) Rules, 2016 and Order 23 Rule 1 of the Civil Procedure Rules (garnishee proceedings on an existing decree of the ELRC)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Julius Wahome Ndirangu & another v Muki Sacco Society Limited; Co-operative Bank of Kenya (Garnishee) [2020] KEELRC 1402 (KLR)", Case Analysis (2020). ELRC Cause No. 48 of 2017 (consolidated with ELRC Cause No. 49 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1402/eng@2020-02-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.