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ELRCPartially AllowedCause No 135 of 2013· [2023] KEELRC 1979 (KLR)

Mwaura v Management University of Africa (Cause 135 of 2013) [2023] KEELRC 1979 (KLR)

Employment and Labour Relations Court
27 July 2023
NMNzioki wa Makau
1,294 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court ruled that salary awards attract PAYE deductions and interest keeps accruing until full payment, directing accounts to settle the balance.

What this practically means

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Executive summary

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The respondent/judgment debtor moved this court for stay of execution of the judgment and decree of June 19, 2018, asserting it had fully paid the decretal sum. The claimant had proclaimed execution for Kshs. 2,861,210/- which he said remained owing. The motion was urged on June 14, 2023. The respondent, relying on Kioko Joseph v Bamburi Cement Limited (Court of Appeal) and section 49(2) of the Employment Act, argued that the decreed award was subject to statutory deductions (PAYE), that remitting taxes is not a review of the judgment, and that the interest claimed was wrongly computed on sums already paid, including on PAYE remitted to the taxman, with the last instalment paid in July 2020. The claimant opposed, contending that no statutory deductions were mentioned in the judgment, that any PAYE issue required a review, that the PAYE formula was never agreed, and that interest on a lump sum paid in staggered instalments remained unpaid; he said the respondent failed to tabulate before the Deputy Registrar, leading to the warrants. The court held that awards under section 49(2) of the Employment Act attract statutory deductions, and that because payment was made by instalments, interest accrued and full payment cannot be asserted without proper calculation, though the amount due would not reach the sum in the warrants. The court directed parties before the Deputy Registrar on July 31, 2023 to take accounts, with a confirmation date before the judge, and ordered each party to bear their own costs.

Key legal issues

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01

Statutory deductions (PAYE) on decreed awards

Holding

Awards under section 49(2) of the Employment Act are subject to statutory deductions; the respondent was entitled to deduct PAYE without seeking review

Reasoning

The court relied on the Court of Appeal decision in Kioko Joseph v Bamburi Cement Ltd and on section 49(2) of the Employment Act, holding that payments under that section attract statutory deductions. Remitting taxes is an application of the law, not a modification of the judgment, so the respondent did not need to seek review.

p. 2
02

Interest on the decretal sum paid by instalments

Holding

Interest accrued on the unpaid balance; full payment cannot be asserted without proper calculation of the interest due, and a sum remains owing though less than that claimed in the warrants

Reasoning

The judgment was delivered in June 2018 but paid in instalments ending July 2020. The sum of Kshs. 2,000,000 paid in August 2018 attracted interest of about Kshs. 46,666.66, and the balance attracted interest for as long as it remained unpaid. Full payment therefore cannot be established without a proper interest computation, and the court directed taking of accounts.

p. 2
03

Whether the Deputy Registrar could address the parties' disputes

Holding

The court directed the parties before the Deputy Registrar for taking of accounts, finding the sums due could not be ascertained with certainty on the pleadings alone

Reasoning

Given the rival tabulations on PAYE and interest, the court considered it necessary to direct parties before the registrar to ascertain with certainty the sums due and unpaid for final settlement, with a subsequent date for confirmation of payment before the judge.

p. 3

Legal principles established

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  • Payments under section 49(2) of the Employment Act are subject to statutory deductions
  • Remitting taxes on a court award does not amount to a review of judgment but mere application of the law
  • Where the decretal sum is paid by instalments, interest accrues on unpaid portions and full payment cannot be asserted without proper calculation of interest

Court orders

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  1. 1.Parties to appear before the registrar of the court for taking of accounts to ascertain the sums due and unpaid for purposes of final settlement of the claim
  2. 2.Parties to appear before the Deputy Registrar on July 31, 2023 to take accounts
  3. 3.A date to be taken for confirmation of payment before the judge after the accounts are taken
  4. 4.Each party to bear their own costs of the motion

Authorities

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Legislation

  • Employment Actsection 49(2)

Cases cited (1)

  • Kioko Joseph [suing as the representative of the estate of Joseph Kilinda] v Bamburi Cement Limited
    [2017] eKLR
Jurisdiction invoked
Original supervisory jurisdiction of the Employment and Labour Relations Court over its own decree and execution proceedings

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, "Mwaura v Management University of Africa (Cause 135 of 2013) [2023] KEELRC 1979 (KLR)", Case Analysis (2023). Cause No 135 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1979/eng@2023-07-27

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