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ELRCOtherCause No. 1830 of 2015· [2021] KEELRC 1400 (KLR)

Benard Musyoka Ngwenzee & 167 others v Uzuri Foods Limited [2021] KEELRC 1400 (KLR)

Employment and Labour Relations Court
23 March 2021
MMM. Mbaru
5,242 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenyan court confirmed that unfair termination compensation is calculated on gross salary, but employees actually receive it after statutory deductions.

What this practically means

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Executive summary

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This ruling by Mbaru J in Employment and Labour Relations Court Cause No. 1830 of 2015 at Nairobi follows the judgment of 11th November, 2020 in which the court awarded 170 claimants one month's salary in lieu of notice and eight months' salary as compensation for unfair termination. Because of the large number of claimants, the court had directed at paragraph 65 of the judgment that the amounts be tabulated per claimant and presented for adoption. Both parties filed tabulations: the claimants applied the total gross monthly wage, while the respondent applied the total net wage. The court resolved the difference by reference to section 49(1)(c) and section 49(2) of the Employment Act, 2007: compensation is computed on the gross monthly wage but payments are subject to statutory deductions, so the net wage is payable. Holding both tabulations correct in that sense, the court adopted the respondent's schedule dated 9th March, 2021, which factored the gross wage and subjected it to statutory deductions for each of the 170 claimants, as the judgment amounts, totalling Ksh. 22,503,852. The ruling then sets out the per-claimant awards and concludes 'Orders Delivered accordingly' in open court at Nairobi on 23rd March, 2021. No costs order is recorded. The case illustrates the reconciliation of gross and net wage computations in unfair termination awards for a large claimant pool.

Key legal issues

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01

Whether compensation for unfair termination should be tabulated on gross or net monthly wage

Holding

The gross monthly wage is the basis of computation under section 49(1)(c), but the amounts payable must be subjected to statutory deductions under section 49(2), so each claimant receives the net wage; the respondent's schedule reflecting both was adopted

Reasoning

The claimants tabulated using the total gross wage while the respondent used the total net wage. The court reconciled the two: section 49(1)(c) fixes the gross monthly wage as the computational base, while section 49(2) subjects such payments to statutory deductions. The respondent's schedule applied the gross wage and then deducted statutory deductions for each of the 170 claimants, and was therefore correct in law and adopted.

p. 3

Legal principles established

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  • Compensation for unfair termination under section 49(1)(c) of the Employment Act, 2007 is computed on the gross monthly wage, but any payments made are subject to statutory deductions under section 49(2), so the employee receives the net wage
  • Where a judgment directs tabulation of awards for multiple claimants, the court may adopt a party's verified schedule as part of the judgment

Court orders

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  1. 1.The tabulation by the respondent dated 9th March, 2021 is adopted as the judgment amounts pursuant to paragraph 65 of the judgment delivered on 11th November, 2020, totalling Ksh. 22,503,852
  2. 2.Each claimant is entitled to one month's salary in lieu of notice and 8 months' salary compensation for loss of employment, with the gross wage subjected to statutory deductions, as set out in the adopted schedule
  3. 3.Orders delivered in open court at Nairobi on 23rd day of March, 2021
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007 in the underlying unfair termination claim (Cause No. 1830 of 2015)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Benard Musyoka Ngwenzee & 167 others v Uzuri Foods Limited [2021] KEELRC 1400 (KLR)", Case Analysis (2021). Cause No. 1830 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1400/eng@2021-03-23

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