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ELRCOtherELRC Cause No. 43 of 2019· [2022] KEELRC 207 (KLR)

Jackson M Italakua & another v Kenya Farmers Association Limited [2022] KEELRC 207 (KLR)

Employment and Labour Relations Court
21 April 2022
HWHellen Wasilwa
2,464 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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Two former managers won their breach-of-contract claim in principle but lost the payout for now because they couldn't prove exactly how much they were owed.

What this practically means

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Executive summary

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Two former managers of Kenya Farmers Association Limited - a marketing manager and a human resource manager - sued on 8th July 2019 alleging breach of employment contracts dated 15th October 2008 which they said pegged their basic salary at Kshs 170,000 per month, with 15% (later 30%) house allowance and 25% annual gratuity. They sought a declaration of breach, payment of unpaid salary, service gratuity and house allowance, with interest and costs. The Respondent admitted employing them but maintained that on 6th September 2007 its Board resolved a 50% salary increase, fixing their salary at Kshs 119,070, and that the contracts showing Kshs 170,000 were produced by the managing director on the 2nd Claimant's misrepresentation, for a restructuring consultant's use only and without Board authority. The Respondent added that a 2012 salary review request was declined by the Staff and Finance committee and the full Board. At hearing, however, both Claimants admitted in cross-examination to signing contracts reflecting a salary of Kshs 119,000. The court framed two issues: the contract terms and whether they were breached. It found the operative basic salary was Kshs 119,000 per month with 15% house allowance and 25% gratuity. Although the payslips showed the Claimants were paid less than this and received some arrears, the court found the Claimants had not proved with finality what they were paid and what was owing. Rather than dismiss or award, the court directed the Claimants to file, within 30 days, a detailed schedule of amounts unpaid with evidence based on the Kshs 119,000 salary for further consideration, and made no order as to costs at that stage.

Key legal issues

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01

What were the contract terms between the Claimants and the Respondent

Holding

The operative basic salary was Kshs 119,000 per month, house allowance 15% and gratuity 25%, per the signed contracts

Reasoning

Although the Claimants relied on contracts dated 15.10.2008 showing a salary of Kshs 170,000, the court found on cross-examination that CW1 received and signed a new contract dated 15/10/2010 showing Kshs 119,000, and CW2 admitted signing the contract at page 25 of the Respondent's documents. The court therefore preferred the signed subsequent contracts.

p. 4
02

Whether the contract terms were breached in any way

Holding

The Claimants appear to have been paid less than the contractual Kshs 119,000, but the quantum of the shortfall was not proved; the court deferred final determination pending a detailed schedule

Reasoning

The payslips showed payments below the found contractual salary, with some arrears already paid. However, the Claimants could not state what they had been paid or what remained owing, even after filing suit. The court declined to award unquantified sums and instead directed the Claimants to file a detailed schedule with evidence based on the Kshs 119,000 salary.

p. 4
03

Whether the contracts showing Kshs 170,000 were validly executed or a product of misrepresentation/excess authority

Holding

The court did not rest its decision on the Respondent's misrepresentation theory, instead grounding its finding on the Claimants' own admissions of signing the subsequent contracts

Reasoning

The Respondent alleged the 15.10.2008 contracts were fabricated for a restructuring consultant and signed without Board authority. The court did not make an express finding on this allegation, but based its conclusion on the Claimants' cross-examination admissions that they signed the contracts reflecting Kshs 119,000.

p. 4

Legal principles established

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  • A signed subsequent employment contract varying earlier terms binds the employee even where an earlier contract indicates different terms
  • A claimant seeking salary arrears must prove with precision what was paid and what is owing before the court can award it

Court orders

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  1. 1.The Claimants to file before the Court within 30 days a detailed schedule of amounts not paid with evidence based on 119,000/= salary for further consideration by the Court
  2. 2.No order of costs at this time
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act over employment contracts

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, "Jackson M Italakua & another v Kenya Farmers Association Limited [2022] KEELRC 207 (KLR)", Case Analysis (2022). ELRC Cause No. 43 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/207/eng@2022-04-21

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