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ELRCDismissedELRC Appeal No. E010 of 2022· [2023] KEELRC 3310 (KLR)

Egerton University v Miruka (Employment and Labour Relations Appeal E010 of 2022) [2023] KEELRC 3310 (KLR)

Employment and Labour Relations Court
20 December 2023
HWHellen Wasilwa
3,719 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

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An employer couldn't deduct PAYE from a settlement it had consented to, because the consent never mentioned tax — it had to pay the full agreed amount.

What this practically means

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Executive summary

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This was an appeal to the Employment and Labour Relations Court at Nakuru against a ruling of Hon. I. Orenge, Chief Magistrate, delivered on 3rd June 2022 in Nakuru CMCC No. 260 of 2021, dismissing the Appellant's application for stay of execution and release of a proclaimed motor vehicle. The parties had recorded a consent dated 30th November 2021 settling part-time teaching claims at Kshs. 823,647.45, payable in instalments, plus fees of Kshs. 330,600, and the consent was adopted as a judgment of the court. The Appellant contended that it was entitled to subject the consented sum to PAYE and other statutory deductions, having paid a net of Kshs. 594,359.75, and that the subsequent proclamation and attachment of its motor vehicle was therefore irregular. The Respondent maintained the consent was silent on tax, that the Appellant defaulted on the first instalment and had paid only Kshs. 521,880, leaving a balance of Kshs. 301,767.45 plus unpaid legal fees, justifying execution. The Respondent also argued the PAYE issue was new on appeal and that appellate courts should not interfere with factual findings. The court, Wasilwa J, examined the consent, found it silent on PAYE, noted the first payment was itself short of the agreed instalment and that payments were not proportionate to any tax, and held the parties' intention was to pay the agreed sum net. Applying the principle that consent orders bind parties unless obtained by fraud, the court found no error in the trial magistrate's ruling and dismissed the appeal with costs to the Respondent.

Key legal issues

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01

Whether the consented amount was subject to PAYE deductions

Holding

The consent was silent on PAYE; the agreed sum was payable net, and the Appellant could not unilaterally subject it to statutory deductions

Reasoning

The court examined the consent of 30 November 2021 and noted it made no mention of tax. The first instalment paid was itself short of the agreed Kshs. 300,000, and the payments made were not proportionate to any tax. Had the parties intended taxation, this would have appeared in the consent and the payment mode. The consent, adopted as a judgment of the court, is binding absent fraud.

p. 7
02

Whether the trial magistrate erred in dismissing the Appellant's application

Holding

No error was made warranting appellate interference

Reasoning

The court found the trial magistrate was guided accordingly in making his findings. The consent judgment remained unvaried and un set aside, so execution to recover the outstanding balance was proper. The Appellant had not complied with the consent terms, having paid only Kshs. 521,880 against the consented amount.

p. 7

Legal principles established

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  • A consent order adopted by the court is binding on the parties and will not be disturbed unless obtained by fraud or similar grounds
  • Where parties intend an amount payable to be subject to tax, that intention must be reflected in the consent and in the mode of payment

Court orders

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  1. 1.Appeal dismissed
  2. 2.Costs of the appeal awarded to the Respondent
  3. 3.The ruling of the trial court delivered on 3rd June 2022 stands (not disturbed)
On appeal from
Nakuru Chief Magistrate Court
Civil Case No. 260 of 2021
Jurisdiction invoked
Appellate jurisdiction of the ELRC over appeal from the Chief Magistrate's Court ruling (Memorandum of Appeal dated 8th June, 2022)

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, "Egerton University v Miruka (Employment and Labour Relations Appeal E010 of 2022) [2023] KEELRC 3310 (KLR)", Case Analysis (2023). ELRC Appeal No. E010 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3310/eng@2023-12-20

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