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ELRCPartially AllowedCause No 358 of 2016· [2022] KEELRC 1348 (KLR)

Githanga & 3 others v County Government of Nyandarua (Cause 358 of 2016) [2022] KEELRC 1348 (KLR)

Employment and Labour Relations Court of Kenya
12 July 2022
3,425 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan county government was ordered to pay each employee Kshs.1 million for cutting house allowances without consulting them or issuing revised contracts.

What this practically means

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Executive summary

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Four ward administrators employed by the County Government of Nyandarua on August 19, 2015 on permanent and pensionable terms sued the respondent claiming their withheld remuneration. Their appointment letters stipulated a house allowance of Kshs.24,000/=, but from October 2015 the respondent paid a reduced allowance (Kshs.12,467/=), later rising to Kshs.13,934/= and then Kshs.15,400/=, without notice or consultation. The respondents attributed the reduction to Salaries and Remuneration Commission circulars of December 10, 2014 and August 11, 2015 which zoned house allowances by locality and were to be phased in, contending that they merely implemented SRC regulations administered through the IPPD system, that the change took effect days after the appointment letters issued, and that they had failed to communicate the changes due to inadvertence. They also argued the claim was incompetent for failure to enjoin the SRC. The court held, applying section 10(5) of the Employment Act and the line of authority on unilateral variation, that an employer cannot unilaterally vary contractual terms without consultation and without issuing a revised contract. As the respondents admitted failing to communicate the changes, their action was in breach of the employment contract and of the law. The court awarded each claimant damages of Kshs.1 million for breach of contract, directed the respondents to seek concurrence with the SRC to correct the alteration of the house allowance or alternatively consult the claimants and issue revised contracts reflecting the correct position, and awarded the claimants costs plus interest at court rates from the date of judgment. The claim succeeded in part: the direct payment of the monthly shortfall sought was substituted by damages and a conciliation direction.

Key legal issues

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01

Whether payment of house allowance below the contractual amount without consultation was lawful

Holding

The respondent's action was in breach of law and of the employment contract; the respondent is guilty of breach.

Reasoning

The appointment letters stipulated a house allowance of Kshs.24,000/= but the claimants were paid less following an SRC circular. Under section 10(5) of the Employment Act, where a matter stipulated in the contract changes, the employer must, in consultation with the employee, revise the contract and notify the employee of the change in writing. There was no consultation, no revised appointment letter and no communication of the change; the respondent admitted it failed to communicate the reduction. Unilateral variation of an essential term such as remuneration constitutes breach of contract and an unfair labour practice.

p. 7
02

Whether the failure to enjoin the SRC renders the claim incompetent

Holding

The claim against the respondent succeeded notwithstanding that the SRC was not enjoined, since the respondent was the employer bound by the appointment letters.

Reasoning

The respondent argued that it merely implemented SRC regulations and that the SRC, which determines remuneration of public officers, was not enjoined. The court did not accept this as defeating the claim: the respondent itself employed the claimants and issued appointment letters stipulating Kshs.24,000/= house allowance, and admitted failing to communicate the changes. The breach lay with the employer, who was properly sued; the court instead directed concurrence with the SRC to correct the position.

p. 5

Legal principles established

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  • An employer cannot unilaterally vary terms of an employment contract without consultation; any change must be communicated officially vide a revised contract, per section 10(5) of the Employment Act, 2007.

Court orders

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  1. 1.Award of damages equivalent to Kshs. 1 million to each claimant for breach of contract
  2. 2.Direction that the respondents seek concurrence with the SRC to correct the mistakes done in altering the house allowance, or alternatively consult with the claimants and issue revised contracts reflecting the correct position
  3. 3.Respondents to pay costs of the suit plus interest at court rates with effect from the date of judgment

Authorities

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Legislation

  • Employment Actsection 10(5)
  • Constitution of Kenya, 2010articles 10, 27(1) and (2), 41, 230(4)(b), 259(11), 201, 225

Cases cited (7)

  • Kenya County Workers Union V Wajir County Government and another
    [2020] eKLR
  • Ronald Kampa Lugaba vs Kenol Kobil Limited
    (2016) eKLR, Cause No. 1026/2013
  • Jackline Wakesho vs Aroma Cafe
    (2014) eKLR, Mombasa ELRC Cause No. 212/2013
  • Maxwell Miyawa & 7 Others vs JSC
    (2017) eKLR, Nakuru ELRC Pet. No. 29 of 2016
  • Rachel Njambi Thuo V County Government of Nyandarua
    [2022] eKLR
  • Teachers Service Commission (TSC) -V- Kenya Union of Teachers (KNUT) & 3 Others
    [2015] eKLR
  • Narok County Council v Trans Mara County Council
    [2000] 1 EA 161
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution (dispute relating to employment and labour relations); not expressly cited

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, "Githanga & 3 others v County Government of Nyandarua (Cause 358 of 2016) [2022] KEELRC 1348 (KLR)", Case Analysis (2022). Cause No 358 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1348/eng@2022-07-12

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