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ELRCPartially AllowedAppeal No E014 of 2021· [2023] KEELRC 3023 (KLR)

Moseti v University of Nairobi (Appeal E014 of 2021) [2023] KEELRC 3023 (KLR)

Employment and Labour Relations Court
22 November 2023
JGJacob Gakeri
801 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled that when a CBA doesn't specify otherwise, gratuity must be calculated on monthly salary, not annually.

What this practically means

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Executive summary

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This judgment of the Employment and Labour Relations Court at Nairobi, delivered virtually by Dr. Jacob Gakeri, J on 22nd November 2023, quantifies the gratuity payable to the Appellant pursuant to the court's judgment of 1st February 2023, which had awarded gratuity at 31% for the two years from 1st July 2013 to 30th June 2015, with interest. The Respondent's subsequent application for stay of execution had been dismissed on 16th May 2023 for failure to offer security under Order 42 Rule 6(2) of the Civil Procedure Rules. The central dispute was the computational basis of gratuity under Clause 40(h) of the 2013-2017 CBA, which provided for gratuity at 31% of basic salary for every completed year of service. The Respondent computed gratuity annually, yielding Kshs.15,170.78 for the two years, while the Claimant computed it monthly, yielding Kshs.182,049.36 for 24 months. Relying on authority that the applicable pay for computing gratuity is dictated by the express agreement between the parties, the court held that since Clause 40(h) made no reference to days per year or annual rates, monthly basic salary is the correct basis. The court computed 31% of the monthly basic salary of Kshs.24,469 over 24 months, arriving at Kshs.182,049.36, and deducted the Kshs.15,170.78 already paid for two months, assessing the net gratuity at Kshs.166,878.58 with interest until payment in full.

Key legal issues

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01

Interpretation of the gratuity clause in the CBA - monthly versus annual computation

Holding

Gratuity is computed on monthly basic salary; the Respondent's construction implying a 'basic salary for every completed year' is wrong

Reasoning

Clause 40(h) of the 2013-2017 CBA provided gratuity at 31% of basic salary for every completed year of service. The clause made no reference to days per year or annual rates, so monthly salary becomes the basis. The Respondent's reading assumed an annual basic salary figure which the clause does not contain. Precedents confirm the applicable pay in computing gratuity is dictated by the express agreement between the parties.

p. 2
02

Credit for gratuity already paid

Holding

Sums already paid as gratuity for two months in 2014 and 2015 (Kshs.15,170.78) are deducted from the assessed award

Reasoning

The records showed the Respondent paid gratuity for two months in 2014 and 2015 totalling Kshs.15,170.78, a fact admitted via the September 2018 payslip evidencing payment of Kshs.511,110 in 2018. The court deducted this amount from the computed 24-month gratuity of Kshs.182,049.36, arriving at Kshs.166,878.58.

p. 2

Legal principles established

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  • The basis for computing gratuity is dictated by the express agreement between the parties, the CBA or the trust deed
  • Where a CBA gratuity clause is silent on the number of days per year or other rates, monthly salary is the basis of computation

Court orders

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  1. 1.Gratuity payable to the Appellant assessed at Kshs.166,878.58
  2. 2.Interest on the assessed gratuity until payment in full

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 42 Rule 6(2)
  • Civil Procedure Rules, 2010Order 21 Rule 1
  • Constitution of Kenya, 2010Article 159(2)(d)
  • Constitution of Kenya, 2010Article 48
  • Civil Procedure ActSection 1B

Cases cited (4)

  • Pravin Bowry v Ethics & Anti-Corruption Commission
    (2013) eKLR
  • Katiwa Kanguli v Bamburi Cement Ltd
    (2014) eKLR
  • Tailors & Textiles Workers Union v African Cotton Workers
    (2013) eKLR
  • Paul Billy Nyagito v East African Portland Ltd
    (2018) eKLR
Jurisdiction invoked
Follows the court's judgment of 1st February 2023 awarding gratuity under the 2013-2017 CBA; consequential assessment of the sum payable

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, "Moseti v University of Nairobi (Appeal E014 of 2021) [2023] KEELRC 3023 (KLR)", Case Analysis (2023). Appeal No E014 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3023/eng@2023-11-22

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