Kamau v Rai Plywoods (Kenya) Ltd (Cause E008 of 2023) [2025] KEELRC 424 (KLR)
The bottom line
#A Kenyan court confirmed employers can deduct PAYE from employment awards, and paying the net amount fully settles the judgment.
What this practically means
#Executive summary
#Key legal issues
#Whether the decretal sum was subject to statutory deductions
Yes. Section 49(2) of the Employment Act mandatorily subjects payments under section 49(1) to statutory deductions, and under the Income Tax Act the employer must deduct and remit PAYE; no exemption applies under Article 210 of the Constitution.
Section 49(2) of the Employment Act provides that any payments made by the employer under the section shall be subject to statutory deductions, the word 'shall' being mandatory. Terminal benefits are taxable under the Income Tax Act, and employers are agents for deduction and remittance of PAYE from income from employment. Article 210 of the Constitution permits exemption only by law, and none applies here. The Hosea Njeru Kagondu ruling to the same effect was adopted.
Whether the decree was satisfied
Yes. Once the Applicant deducted and remitted PAYE and paid the balance, the decree was satisfied in full and final; no further execution could lie unless the Claimant disputes the amount deducted and remitted to KRA.
The court found the Applicant obliged to deduct and remit PAYE and pay the decree-holder the difference. Since this is a legal requirement, courts need not state it in every judgment, there being a presumption that everyone knows the law. Absent a complaint by the Claimant about the amount deducted and remitted to KRA, the net payment was full and final satisfaction of the decretal sum.
Liability for auctioneer's fees following the attachment
The Claimant/Decree-Holder, having instructed auctioneers after receiving payment, is liable for the auctioneer's fees and charges.
Having found that payment net of PAYE constituted full and final satisfaction, any subsequent proclamation and attachment was unwarranted. The court therefore held that where a decree-holder instructs an auctioneer after receiving such payment, the fees and charges of the auctioneer fall on the decree-holder, and made a express order to that effect for the avoidance of doubt.
Legal principles established
#- Payments under section 49 of the Employment Act are mandatorily subject to statutory deductions; decretal sums in employment claims are subject to PAYE which the employer/judgment-debtor must deduct and remit to KRA.
- Payment of the decretal sum net of lawful statutory deductions constitutes full and final satisfaction of the decree.
- Where a decree-holder instructs an auctioneer after receiving satisfaction of the decree, the auctioneer's fees are the decree-holder's liability.
Court orders
#- 1.Stay of execution sought in the application was rendered unnecessary by the finding of full satisfaction (application allowed)
- 2.The Proclamation Notice and attachment by Lister Auctioneers set aside (application allowed in its entirety)
- 3.The amount paid to the Claimant after deduction of PAYE was in full and final satisfaction of the decretal sum
- 4.The auctioneer's fees and charges are to be paid by the Claimant
- 5.The application dated 6th December, 2024 is allowed with costs
- Jurisdiction invoked
- Court seised of its own decree; application under the court's execution and satisfaction jurisdiction (Employment Act, Income Tax Act considered)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kamau v Rai Plywoods (Kenya) Ltd (Cause E008 of 2023) [2025] KEELRC 424 (KLR)", Case Analysis (2025). Cause No E008 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/424/eng@2025-02-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.