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ELRCPartially AllowedELRC Appeal No. 009 of 2020· [2021] KEELRC 1789 (KLR)

Francis Ngirongu v Flamingo Hill Camp Limited [2021] KEELRC 1789 (KLR)

Employment and Labour Relations Court
27 April 2021
HWHellen Wasilwa
3,375 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan employer was bound to honour gratuity and leave promises it made in writing when accepting a worker's resignation, despite NSSF membership.

What this practically means

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Executive summary

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This is a first appeal to the Employment and Labour Relations Court at Nakuru against the judgment of the trial magistrate delivered on 28 May 2020 dismissing the appellant's claim for terminal dues in CM.E&LRC Case No. 290 of 2019. The appellant, a security guard employed from 2005/2006 until his resignation effective January 2019, claimed gratuity, salary arrears for nine months of compulsory unpaid leave, overtime and accrued leave, alleging his terminal dues were paid as an unexplained lump sum of Kshs. 76,000/-. The appeal was canvassed by written submissions. The court, re-evaluating the evidence as required on a first appeal, found the resignation had been accepted by a letter in which the respondent undertook to pay gratuity at half month's salary per year worked, 12 accrued leave days, half leave travelling allowance and service charge. Although section 35(5) of the Employment Act exempts employers from paying service pay to NSSF members, the court held that the respondent's promise, made with knowledge of the appellant's NSSF membership, crystallized and could not be reneged upon. The court allowed the appeal in part, awarding gratuity of Kshs. 140,124, 12 days' leave pay of Kshs. 9,341.6 and half leave travelling allowance, totalling Kshs. 161,142.6, less the Kshs. 76,000 already paid, leaving a balance of Kshs. 85,142.6. The claims for salary arrears for the unpaid compulsory leave were refused on the basis that the claimant was later recalled and there was no promise to pay; no overtime award was made despite the court's finding that the respondent failed to demonstrate the rotational shift. Costs of the appeal were awarded to the appellant with interest from the date of judgment.

Key legal issues

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01

Entitlement to gratuity under section 35(5) of the Employment Act

Holding

Although section 35(5) exempts an employer from paying service pay to an employee who is a member of NSSF, the respondent's own acceptance letter promised gratuity, and that promise was enforceable; the trial court erred in refusing gratuity.

Reasoning

The court found that the appellant was a NSSF member, so section 35(5) would ordinarily exempt the employer from paying service pay. However, the respondent, when accepting the resignation on 28 December 2018 and knowing of the NSSF membership, promised to pay gratuity at half month's salary for each year worked. That promise crystallized at that point, and reneging on it was in bad taste and legally impermissible. The magistrate should have enforced the promise.

p. 5
02

Payment of the promised accrued leave

Holding

The 12 days accrued leave promised in the acceptance letter was payable to the appellant.

Reasoning

The respondent's acceptance letter expressly offered 12 accrued leave days alongside gratuity and half leave travelling allowance. Having found that the promises in the acceptance letter bound the respondent, the court awarded the value of the 12 days computed on the December 2018 gross salary of Kshs. 23,354, as part of the terminal dues, less the Kshs. 76,000 already paid.

p. 5
03

Salary arrears for compulsory unpaid leave

Holding

The claim for salary arrears for the nine months of compulsory unpaid leave failed.

Reasoning

The court accepted the undisputed fact that the appellant was sent on unpaid leave for nine months, with the respondent explaining this was due to low business. The court accepted that explanation because the claimant was later recalled to work and there was no promise to pay him the unpaid salary for that period, distinguishing this claim from the gratuity and leave promises which had been made in writing in the acceptance letter.

p. 5
04

Overtime claim

Holding

The court found the respondent had not demonstrated the 8-hour rotational shift, but made no award of overtime in the final orders.

Reasoning

The appellant claimed he worked 6pm to 6am daily, i.e. 4 hours overtime daily for 13 years. The respondent alleged 8 guards worked rotational shifts but did not produce the master roll to demonstrate that the appellant worked only 8 hours. The court recorded that failure, yet when crafting the final orders it awarded only gratuity, 12 days' leave pay and half leave travelling allowance, omitting any overtime award and giving no express reason for the omission.

p. 5

Legal principles established

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  • Where an employer, knowing the employee is a member of NSSF, promises in its acceptance of resignation to pay gratuity, that promise binds the employer and cannot be reneged upon
  • Section 35(5) of the Employment Act does not envisage payment of gratuity where an employee is a member of NSSF or a pension scheme
  • On a first appeal, the court has a duty to re-evaluate the evidence adduced before the trial court

Court orders

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  1. 1.Gratuity payment of 15 days for each year worked being 15/30 x 23,354 x 12 years = 140,124
  2. 2.12 days leave pay = 12/30 x 23,354 = 9,341.6
  3. 3.Half leave travelling allowance of 1/2 x 23,354 = 17,677 (total award 161,142.6)
  4. 4.Less amount already paid, balance of 85,142.6 payable to the appellant
  5. 5.The respondent to pay costs of this appeal plus interest at court rate with effect from the date of the judgment

Authorities

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Legislation

  • Employment ActSection 35(5)
  • Employment ActSection 10(6)
  • Employment ActSection 10(7)
  • Employment ActSections 10(2)(3),(7)
  • Employment ActSection 28(2)
  • Employment ActSection 90(2)
  • Employment ActSections 43, 45 and 47
  • Employment ActSection 74
  • Evidence ActSection 107(1)
  • Regulations of Wages (Protective Security Services) Order 1998Regulation 6
  • Regulations of Wages (Protective Security Services) Order 1998Regulation 17

Cases cited (5)

  • Rogoli ole Manadiegi –versus- General Cargo Services Limited
    [2016] eKLR
  • Meshack Kiio Ikulume –versus- Prime Fuels Kenya Limited
    [2013] eKLR
  • Francis Kamau Kinuthia –versus- Flamingo Hill Camp Limited
    [2019] eKLR
  • Philemon Oseni Kidavi –versus- Brinks Security Guards Ltd
    [2018] eKLR
  • Evans Katiezo Aligulah Versus- Eldomat Wholesalers and Supermarket Ltd
    [2016] eKLR
On appeal from
Chief Magistrate's Court at Nakuru
CM.E&LRC Case No. 290 of 2019
Jurisdiction invoked
First appeal from the subordinate court under the Employment and Labour Relations Court Act (appeal against judgment of the trial magistrate in CM.E&LRC Case No. 290 of 2019)

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, "Francis Ngirongu v Flamingo Hill Camp Limited [2021] KEELRC 1789 (KLR)", Case Analysis (2021). ELRC Appeal No. 009 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1789/eng@2021-04-27

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