Omondi v Associated Motors (Cause 1306 of 2018) [2023] KEELRC 3092 (KLR)
The bottom line
#A Kenyan employer that tabulates gratuity in a discharge voucher must pay it, even if the employment contract never promised gratuity.
What this practically means
#Executive summary
#Key legal issues
#Whether gratuity was payable absent a contractual clause providing for it
The employment contract did not provide for gratuity, but the Respondent's computation of terminal dues and execution of a payment discharge voucher created a binding obligation to pay the Kshs. 453,200.09 so tabulated.
The court accepted that a contract of employment may exclude gratuity, consistent with the authorities cited by the Respondent. However, the Respondent went further: it computed the terminal dues, prepared a discharge voucher and had the Claimant execute it. By doing so it entered a distinct contract to pay gratuity. The court rejected the mistake defence, holding the Respondent's intention to pay was clear, and that an employee should not be made to wait over five years and through trial for a debt the employer admitted in writing.
Whether the gratuity computation was a unilateral mistake that could be retracted
The plea of unilateral mistake failed; the intention to pay was clear.
The Respondent argued the voucher was erroneously issued because the contract contained no gratuity entitlement and the company had no gratuity policy, relying on the definition of unilateral mistake in Nebart Njeru Munyi v Nicholas Muriithi Zakaria. The court held this was not a mistake because the intention was clear - the Respondent intended to pay the gratuity as it had itself calculated. Having admitted the obligation in the computation and voucher, the Respondent could not resile from it.
Legal principles established
#- While a contract of employment may lawfully exclude gratuity, once the employer tabulates and issues a discharge voucher computing gratuity, a separate contractual obligation to pay it arises which must be honoured; such an obligation cannot be avoided by later alleging a unilateral mistake where the intention to pay was clear.
Court orders
#- 1.Judgment entered for the Claimant against the Respondent for Kshs. 453,200.09 being gratuity
- 2.Costs of the suit to the Claimant
- 3.Interest at court rates on Kshs. 453,200.09 from the date of filing suit until payment in full
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (gratuity/terminal dues claim); no specific provision cited in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kawinzi v East Africa Portland Cement (Cause 24 of 2019) [2025] KEELRC 1109 (KLR)[2025] KEELRC 1109 (KLR)3 Apr 2025
Cite this brief
#Cite this brief
Caselaw, "Omondi v Associated Motors (Cause 1306 of 2018) [2023] KEELRC 3092 (KLR)", Case Analysis (2023). Cause No 1306 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3092/eng@2023-11-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.