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ELRCDismissedEmployment and Labour Relations Court Claim dated 14th November 2016 (Memorandum of Claim)· [2021] KEELRC 534 (KLR)

Gaye Madiodio v Societe Internationale De Tele Communication Aerornautiques (SITA) [2021] KEELRC 534 (KLR)

Employment and Labour Relations Court of Kenya
9 November 2021
4,288 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that ex-gratia payments and discretionary gratuity are not employee rights, dismissing a retiree's multi-million shilling claim with costs.

What this practically means

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Executive summary

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The Claimant, a Senegalese expatriate, sued the Respondent seeking a declaration that withholding of his terminal dues was unfair and unlawful, gratuity for an extra 4 months of service beyond 32 completed years (Kshs 583,881.90), ex-gratia equivalent of six months' basic salary (Kshs 7,006,582.74) and refund of extra accommodation costs of Kshs 4,445,000, plus costs and interest. He retired on 31st December 2015 after a contract extension and relocated to Senegal, where the Respondent paid one month's accommodation, air tickets and shipping, and gratuity at 1.5 months per completed year for 32 years. Each party called one witness. The court framed four issues: entitlement to gratuity for the extra 4 months, to ex-gratia, to extra accommodation costs, and to the reliefs sought. On gratuity, it found no contractual or policy entitlement, the payment having been made at the employer's discretion under union-negotiated CBA terms for completed years only, and distinguished Ben Panhill Sifuna v Kenya Urban Roads Authority. On ex-gratia, it applied Nicolas Wachira Koiga v NCR Kenya Limited, holding ex-gratia is not a right and no practice of paying all exiting employees was proved, the list relied on concerning unionisable staff declared redundant. On accommodation, the court found only one month was payable under clause 3.8 of the international assignment policy and the Claimant extended his hotel stay without approval, at his own will. The entire claim was dismissed with costs to the Respondent.

Key legal issues

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01

Whether gratuity is payable for an extra 4 months that did not complete a year of service

Holding

The claim was dismissed. Gratuity was not a contractual or policy entitlement of the Claimant; it was paid in good faith at the employer's discretion under union-negotiated terms at 1.5 months per completed year, and the 4 months did not constitute a completed year.

Reasoning

The court examined the letter of employment and terms of service and found no provision for gratuity, the Claimant being on a pension scheme and not unionisable. The gratuity paid followed the CBA formula for unionisable employees. The authority of Ben Panhill Sifuna was distinguished because there gratuity was contractual and the sole social security benefit. The claimed legitimate expectation from an erroneous email was found shallow and baseless.

p. 4
02

Whether ex-gratia payment on retirement was due as a practice of the Respondent

Holding

The claim was dismissed. Ex-gratia is discretionary and not a right; the schedule of payments produced related to unionisable staff declared redundant whose benefits were negotiated by the union, and the Claimant was not unionisable.

Reasoning

The court adopted the definition in Nicolas Wachira Koiga v NCR Kenya Limited that an ex-gratia benefit is not a right. The Claimant's own evidence was that he had not produced evidence of a policy and that the list he relied on concerned redundancy payments to union members. No proof of a practice of paying all exiting employees ex-gratia was established.

p. 5
03

Whether the Respondent was liable for extra temporary accommodation costs on return to Senegal

Holding

The claim was dismissed. Under clause 3.8 of the international assignment policy only one month's accommodation was payable, extension required company approval which was never sought or granted, and the Claimant extended his stay at his own will.

Reasoning

The court found the Claimant was already retired and no longer an employee, had been paid one month's accommodation, air tickets and shipping, and had a rented-out residence in Dakar with holiday visits demonstrating he was not desperate. He admitted he had not provided proof of exceptional circumstances justifying extension and contravened the policy by incurring expenses without approval.

p. 5
04

Whether the withholding of terminal dues was unfair and unlawful

Holding

The court found the Respondent fully complied with the retirement letter, the terms of employment and the international assignment policy, with no discrimination in the retirement process, entitling the Claimant to no relief.

Reasoning

Given the findings on the three substantive issues, the court held the retirement package was correctly computed and paid, relocation was fully compensated per policy, and no discrimination was established. The entire claim therefore failed in totality with costs to the Respondent.

p. 5

Legal principles established

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  • An ex-gratia benefit is not a right and cannot be claimed as an entitlement by an employee
  • An employee cannot compel an employer to pay a discretionary benefit once the discretion has been exercised against him
  • Where gratuity is paid at the employer's discretion for completed years of service, an incomplete period beyond a completed year does not attract prorated gratuity

Court orders

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  1. 1.The entire claim is dismissed
  2. 2.Costs of the suit awarded to the Respondent

Authorities

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Legislation

  • Collective Bargaining Agreement (referenced severance formula)Severance pay of 1.5 months per completed year of service

Cases cited (3)

  • Ben Panhill Sifuna v Kenya Urban Roads Authority
    (2014) eKLR
  • Nicolas Wachira Koiga v NCR Kenya Limited
    (2013) eKLR
  • Stephen K Kachila v Bamburi Cement ltd
    (2015) eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court over a memorandum of claim for terminal dues (Employment and Labour Relations Court Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Gaye Madiodio v Societe Internationale De Tele Communication Aerornautiques (SITA) [2021] KEELRC 534 (KLR)", Case Analysis (2021). Employment and Labour Relations Court Claim dated 14th November 2016 (Memorandum of Claim). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/534/eng@2021-11-09

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