Makau v Cook N Lite Ltd (Cause 902 of 2016) [2023] KEELRC 1113 (KLR)
The bottom line
#A Kenyan court awarded a cashier Kshs 396,720 for years of below-minimum-wage pay, but rejected claims for gratuity, overtime and demotion damages.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to gratuity
Claim for gratuity failed as it was not contractual, statutory or provided for in a CBA
The court applied the Court of Appeal decisions in Bamburi Cement and Pathfinder International, holding that gratuity is a discretionary, gratuitous payment which an employee can only claim if provided for in the contract, a Collective Bargaining Agreement or statute. The Employment Act does not make gratuity mandatory, and the Claimant's contract provided none.
Salary underpayment for 29 months as Chief Cashier
Claim succeeded; Claimant awarded Kshs 396,720, the difference between his salary and the Minimum Wage Schedule rate for a Cashier
The Claimant's uncontroverted evidence and the Minimum Wage Schedules of 2013 and 2015 showed a Cashier earned Kshs 1,192 daily (Kshs 35,760 monthly) while he was paid Kshs 22,050 for 29 months as Acting Chief Cashier. The unproven defence meant the claim stood unchallenged and was awarded in full.
Limitation in respect of continuing underpayment
The underpayment claim was within time as limitation runs from cessation of the continuing injury
Applying Section 90 of the Employment Act, the court treated monthly underpayments as a continuing injury carrying forward; limitation began when the underpayment ceased in July 2016. The suit filed in November 2016 was therefore within the statutory period.
Compensation for unfair labour practice (demotion)
Claim declined; the lateral transfer on the same terms did not amount to demotion
The transfer letter expressly kept terms and conditions the same. Adopting the definition of demotion in Godfrey Odipo Tom, demotion requires emplacement in a position with lower salary or allowance. The Claimant did not plead constructive or unfair termination, and the unquantified Kshs 200,000 claim failed.
Legal principles established
#- Gratuity is a gratuitous payment at the discretion of the employer and must be provided for in the contract of employment, a Collective Bargaining Agreement or statute
- Underpayments over a period of employment are a continuing injury; limitation under Section 90 of the Employment Act runs from cessation of the underpayment
- Where a party fails to adduce evidence, the evidence adduced by the opposing party stands unchallenged and the pleadings remain unsubstantiated statements
Court orders
#- 1.Judgment entered for the Claimant against the Respondent for Kshs 396,720 being salary underpayment for 29 months' commencing April 2014
- 2.The awarded sum to be subject to statutory deductions under Section 49(2) of the Employment Act
- 3.Claimant awarded costs of the suit and interest at court rates
- Jurisdiction invoked
- Employment and labour relations jurisdiction of the Employment and Labour Relations Court (suit instituted by statement of claim under the Employment Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Makau v Cook N Lite Ltd (Cause 902 of 2016) [2023] KEELRC 1113 (KLR)", Case Analysis (2023). Cause No 902 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1113/eng@2023-05-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.