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ELRCDismissedCause No E049 of 2021· [2023] KEELRC 334 (KLR)

Ngugi & 91 others v Kangema Farmlands Company Ltd & another (Cause E049 of 2021) [2023] KEELRC 334 (KLR)

Employment and Labour Relations Court
9 February 2023
OMOnesmus N Makau
3,836 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~15 min to read original · ~4 min brief

The bottom line

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The Employment Court ruled that workers who sign clearance certificates when leaving a job generally cannot later claim more money from that employer.

What this practically means

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Executive summary

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Ninety-two former employees of Kangema Farmlands Limited, managed by the 2nd respondent under an estate management agreement, claimed they were underpaid from 2015 to 2020 because salary increments under the 2015-2016 and 2017-2018 CBAs were never effected. They sought severance pay, pay in lieu of notice, baggage allowance, salary arrears totalling about Kshs 25 million after credited payments, damages for unfair labour practice, costs, interest and certificates of service, following termination by redundancy in 2020. The respondents asserted a lawful redundancy with notice to the union and labour officer, and that all terminal dues based on the 2017-2018 CBA were paid, with claimants signing clearance certificates and thumb-printing the master roll. The court framed two issues: whether the clearance certificates discharged the respondents, and whether the claimants were entitled to the reliefs. It found that salary arrears for 2015-2018 and baggage allowance (including the corrected Kshs 1,000 balance) were paid; that CW1's allegations of illiteracy and coercion could not represent all 92 claimants and strayed beyond the pleadings; that the certificates constituted a binding contract; and that under clause 26(e) of the CBA gratuity replaced severance pay on redundancy, the claimants having accepted the higher gratuity. The court applied the De La Rue and Coastal Bottlers authorities on discharge vouchers, held the claimants estopped, and noted some claimants were strangers or deserters who never testified. The suit was dismissed with no costs on 9 February 2023 at Nyeri.

Key legal issues

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01

Whether the clearance certificates discharged the respondents

Holding

Yes - the certificates were executed voluntarily with full knowledge of their import and constitute a binding settlement contract estopping the claimants

Reasoning

The court analysed the payment schedules and found salary arrears, baggage allowance and gratuity had been paid or acknowledged. CW1's allegation of illiteracy could not represent all 92 claimants, was raised late, and strayed beyond the pleadings. The claimants signed clearance certificates and later thumb-printed the master roll without protest. No vitiating factor was pleaded or proved.

p. 6
02

Whether the claimants are entitled to the reliefs sought

Holding

No - the discharge and undertaking in the clearance certificates estops the claimants from seeking the reliefs

Reasoning

The court accepted that the redundancy entitlements arose under section 40 of the Employment Act and the CBA, but the claimants had accepted gratuity (a higher benefit than severance pay) and waived severance. The binding discharge precluded the reliefs. Further, some claimants were strangers or deserters who never proved their claims by testimony.

p. 7

Legal principles established

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  • A clearance certificate/discharge voucher signed voluntarily and with full knowledge constitutes a binding contract that estops an employee from making further claims against the employer
  • A court faced with a discharge agreement must consider its import and whether it was voluntarily executed
  • Under the CBA, service gratuity under clause 24 is not applicable where termination is by redundancy, clause 26 severance pay applying instead
  • A party cannot found a claim on evidence or allegations that stray beyond the pleadings

Court orders

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  1. 1.The suit is dismissed
  2. 2.No costs awarded (each party to bear own costs, the suit being dismissed with no costs)

Authorities

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Legislation

  • Employment ActSection 40
  • Employment and Labour Relations Court (Procedure) RulesRule 28(3)

Cases cited (5)

  • Philip Osore Ogutu v Michael Onyura Aringo & 2 others
    (2013) eKLR
  • Daniel Otieno Migore v South Nyanza Sugar Co.Ltd
    (2018) eKLR
  • IEBC & another v Stephen Mutinda Mule & 3 others
    (2014) eKLR
  • Thomas De La Rue (K) Ltd v David Opondo Omutelema
    (2013) eKLR
  • Coastal Bottlers Ltd v Kimathi Mithika
    (2018) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Employment and Labour Relations Court (Procedure) Rules

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, "Ngugi & 91 others v Kangema Farmlands Company Ltd & another (Cause E049 of 2021) [2023] KEELRC 334 (KLR)", Case Analysis (2023). Cause No E049 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/334/eng@2023-02-09

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