Oswe v Spectre International Co Ltd & another (Cause 421 of 2017) [2023] KEELRC 3194 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Res judicata
Rejected; the causes of action in the prior Kisumu Cause (Provident Fund, Sacco contributions, salary arrears) are distinct from the loan remittance claim
The Court examined the pleadings and proceedings in Kisumu Cause No. 67 of 2019 involving 68 former employees over Provident Fund and Sacco deductions. The instant action concerns a loan from Equity and Spectre's failure to remit payroll repayments. The actions were held distinct and unrelated, so the plea lacked factual or legal basis.
Limitation
No limitation arises; breaches continued on a monthly basis until separation in January 2018 and the Cause was filed on 15 November 2017 during the employment relationship
The Court held that as the claim is premised on employer/employee relations, section 90 of the Employment Act, 2007 applies rather than section 4(1) of the Limitation of Actions Act. Since breaches continued monthly until January 2018 and suit was filed in November 2017 while employment subsisted, limitation does not arise.
Breach of contract
Spectre was in breach of section 19(g) and (h) of the Employment Act, 2007; deductions were made but not regularly remitted
The Claimant gave written instructions in tandem with section 19(1)(g) of the Employment Act for monthly deductions and remittance to Equity. Bank statements confirmed deductions were made but remittances were intermittent. The employer, expected to keep records, produced none showing it paid all instalments as they fell due. The loan balance stood at Kshs 624,579 as of 1 March 2018.
Refund of over-deductions
Claimant awarded Kshs 117,832/- for deductions made beyond the agreed 60 instalments
The Claimant alleged deductions continued for 8 months beyond the 60-month term, totalling Kshs 117,832. The bank statements corroborated this. A later claim in submissions for over-deductions beyond 8 months was rejected as no amendment was sought.
Legal principles established
#- An employer who makes deductions from an employee's salary under section 19(1)(g) of the Employment Act must remit them as instructed, failing which it is liable in breach of contract
- The employer bears the burden of producing records to demonstrate remittance of deducted funds
- Limitation for claims premised on employer/employee relationship is governed by section 90 of the Employment Act, 2007
Court orders
#- 1.A declaration that the 1st Respondent is liable to settle the outstanding loan arrears together with interest and penalties due to the 2nd Respondent from the Claimant
- 2.The Respondents to render an honest, truthful and accurate statement of account to the Claimant on the loan account/repayments and any excess payments be refunded
- 3.Award of Kshs 117,832/- to the Claimant as against the 1st Respondent
- 4.The 1st Respondent to meet the costs of the Claimant and the 2nd Respondent
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employer/employee dispute over salary deductions)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Oswe v Spectre International Co Ltd & another (Cause 421 of 2017) [2023] KEELRC 3194 (KLR)", Case Analysis (2023). Cause No 421 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3194/eng@2023-12-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.