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ELRCDismissedNot stated in the judgment· [2024] KEELRC 1356 (KLR)

Nyariki & 3 others v County Government of Nyamira & 2 others (Petition E055 of 2021) [2024] KEELRC 1356 (KLR)

Employment and Labour Relations Court
6 June 2024
CBChristine N. Baari
1,652 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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Kisumu's Employment Court refused to punish Kisii County officials for contempt, ruling that tax deductions and new house allowance reviews did not breach earlier court orders.

What this practically means

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Executive summary

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This ruling by the Employment and Labour Relations Court at Kisumu (Baari J) determined a Notice of Motion dated 15th September, 2023 in which the Petitioners sought to cite the 1st Respondent's CEC member for finance, the Governor, the Chief Officer in charge of finance, the Chairman of the 3rd Respondent, the Payroll Manager and the Human Resource Director of the 2nd Respondent for contempt of court orders issued on 31st January, 2022 (as supplemented by a consent on costs adopted on 7th February, 2022). The orders had directed the Respondents to retain the Petitioners' terms and conditions of employment as they were before a letter dated 25th August, 2021, and to pay the costs of the petition. The Applicants complained that house allowances were not paid as before, that Kshs. 154,656/- of taxed costs was withheld, and that the 3rd Petitioner was not reinstated. The court framed two issues: whether the Respondents were in contempt, and whether costs are taxable. It held the consent orders did not address the subsequently reviewed house allowances affecting all county employees, any challenge to which required a new suit joining the county governments and the Salaries and Remuneration Commission, and that the Applicants' near two-year silence amounted to acquiescence. Costs were held subject to VAT under the VAT Act, 2015, so the withholding and remittance to KRA did not contravene the order. The 3rd Petitioner's grievance over fresh disciplinary action could only be pursued in a new suit. The motion was dismissed with costs.

Key legal issues

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01

Whether the Respondents' review of house allowances breached the consent orders of 31st January, 2022

Holding

No contempt. The consent orders did not deal with the subsequently reviewed house allowances, and the changes affected all county employees.

Reasoning

The orders were entered by consent and did not contemplate the later reviewed house allowance attributable to the SRC directive. Any challenge to the review affects all county government employees and would require county governments and the SRC to be heard in a new suit. The Applicants also received the reviewed allowances for nearly two years without complaint, amounting to acquiescence.

p. 4
02

Whether deduction of withholding tax/VAT from the costs award contravened the court order

Holding

No. Costs of the suit are subject to VAT under the VAT Act, 2015.

Reasoning

Section 6(1) of the VAT Act charges tax on taxable supplies, and 'supply' under section 2 includes taxable services not specified in the Third Schedule. Legal services are not listed as exempt supplies, so costs paid are subject to VAT and the tax withheld and remitted to KRA was lawful.

p. 4
03

Whether the failure to reinstate the 3rd Petitioner amounted to contempt

Holding

No. He was reinstated, and any subsequent disciplinary action is a separate matter to be pursued in a new suit.

Reasoning

The 3rd Respondent did not show he was not reinstated when the orders were issued. The Respondents' claim that new disciplinary proceedings were opened was not controverted, and the consent orders did not bar lawful future disciplinary action. Any grievance lies in a fresh suit, not contempt proceedings.

p. 4

Legal principles established

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  • A court order binds the party against whom it is addressed and remains valid and must be complied with until set aside; deliberate disobedience will not be condoned.
  • Costs of a suit are awarded to the winning party and, as legal services are subject to VAT under the VAT Act, withholding tax deducted and remitted to KRA does not contravene an order for payment of costs.

Court orders

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  1. 1.The Notice of Motion dated 15th September, 2023 seeking contempt citations is dismissed
  2. 2.Costs of the motion awarded to the Respondents

Authorities

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Legislation

  • Value Added Tax ActSection 6(1)
  • Value Added Tax ActSection 2 and Third Schedule

Cases cited (1)

  • Republic v Attorney General & another Ex Parte Mike Maina Kamau
    (2020) eKLR
Jurisdiction invoked
Original jurisdiction of the Employment and Labour Relations Court over contempt of its own orders issued on 31st January, 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, "Nyariki & 3 others v County Government of Nyamira & 2 others (Petition E055 of 2021) [2024] KEELRC 1356 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1356/eng@2024-06-06

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