Kenya Building, Construction, Timber and Furniture Industries Employees Union v Timsales Limited (Cause E029, E030 & E031 of 2021 (Consolidated)) [2023] KEELRC 1532 (KLR)
The bottom line
#Kenya's Employment Court ruled terminal dues must be calculated on gross pay, not basic pay, and ordered recalculations for unionised workers.
What this practically means
#Executive summary
#Key legal issues
#Scale of pay for computing terminal dues and compensation
Terminal dues and compensation must be calculated on gross pay, and must factor in the automatic 11% CBA salary increases effective July 2018
The Court found that Part 1(b) and clause 38 of the CBA provided an automatic increment of salaries for employees earning above grade rates as at June 30, 2017, to be effected by July 2018. The labour officer used basic pay as at June 2018, contrary to section 49(1) of the Employment Act and trite law; the calculations therefore had to be redone on gross pay including the increases.
Leave pay for grievants excluded from the tabulation
All 117 grievants excluded from leave pay must be paid their leave pay because the evidence of utilised leave was availed after judgment without the grievants' opportunity to test it
The Respondent claimed the 117 excluded grievants had utilised their leave days, but this information was only availed to the labour office after the judgment. Since it was never presented as evidence before judgment and the grievants had no chance to confirm it, the Court directed payment of leave pay to all 117 grievants.
Formula for calculating gratuity
A 30-day month is the standard measure for calculating gratuity, not a 26-day month
The Court noted that courts have used varying formulas, with some adopting 26 days and others 30 days. Agreeing with the Respondent, the Court adopted 30 days as the standard, reasoning that the calculation factors in the one rest day per week given as off day under the law but for which an employee remains entitled to pay.
Days worked and not paid for
The award for days worked and not paid for must be factored in, as the Respondent's evidence of payment up to July 25, 2018 was never before the Court for the claimants to confirm
The Respondent asserted payment of salaries to July 25, 2018 with evidence tabled before the labour office, but that evidence was not before the Court and claimants had no opportunity to test it. In absence of that evidence and having awarded days worked, the labour office was directed to factor the award in.
Legal principles established
#- In calculating terminal dues for employees, the scale to use is gross pay and not basic pay
Court orders
#- 1.That all 117 grievants left out of the leave pay tabulation be paid all their leave pay
- 2.That a fresh calculation of compensation be carried out using gross pay earned by the grievants and factoring in the salary increases
- 3.That the notice pay calculation be amended to use gross pay and not basic pay
- 4.That gratuity be calculated using 30 days as the standard month
- 5.That days worked and not paid for be factored in by the labour office
- 6.That the matter be referred back to the labour officer to redo the calculations based on the guidelines and re-submit to court within 14 days
- Jurisdiction invoked
- Employment and Labour Relations Court — pursuant to the Court's prior judgment of January 17, 2023 directing tabulation of terminal dues
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Building, Construction, Timber and Furniture Industries Employees Union v Timsales Limited (Cause E029, E030 & E031 of 2021 (Consolidated)) [2023] KEELRC 1532 (KLR)", Case Analysis (2023). Not stated in the extract (suit in which judgment was delivered January 17, 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1532/eng@2023-06-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.