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ELRCDismissedNot stated in the judgment· [2025] KEELRC 622 (KLR)

Kinuthia v Nairobi City Water and Sewerage Company Limited (Employment and Labour Relations Cause 66 of 2019) [2025] KEELRC 622 (KLR)

Employment and Labour Relations Court
28 February 2025
2,112 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court dismissed a retired employee's Kshs. 59 million terminal dues claim, ruling per diem, underpayment and housing claims fail, while tax and pension disputes belong elsewhere.

What this practically means

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Executive summary

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The claimant, employed by the respondent from 2005 until retirement on 25 August 2018, sued for terminal dues and pension-related reliefs exceeding Kshs. 59 million, principally a per diem claim of Kshs. 7,140,000 for a temporary transfer to Ngethu Water Works following the 2007 post-election violence, underpayment on an alleged wrong job grade, unremitted statutory deductions, unremitted KRA income tax, a housing allowance differential, and pension underpayment. The respondent denied the claims, maintaining the claimant was on a transfer with a transfer allowance, not out-of-station duty, was employed and retired in the same position with salary regularly reviewed upwards, and that the contract was fully performed. The court adopted the Black Law Dictionary definition of per diem and held that the transfer memo unambiguously communicated a transfer; per diem under the HR policy was payable only for out-of-station duty not exceeding 14 days. The underpayment and housing allowance claims failed because the claimant signed the contract accepting its terms and the court cannot rewrite contracts. The court declined jurisdiction over the unremitted tax claim (directing the claimant to the KRA tax appeals tribunal or commercial courts) and over pension claims, applying the Supreme Court's decision in Albert Chaurembo Mumba. The statutory deductions claim was unsubstantiated. The entire claim was dismissed with no order as to costs, the court tempering justice with mercy given the claimant's status as a retired ex-employee.

Key legal issues

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01

Entitlement to per diem during temporary transfer

Holding

Claim dismissed - the claimant was on transfer to a new station, not out of station on duty

Reasoning

The memo of 29 January 2008 communicated a temporary transfer due to post-election violence, provided for a transfer allowance and a proper takeover of duties, and wished the claimant well in a new assignment. Transfer is a prerogative of the employer. Per diem under the HR policy applied only to out-of-station duty of not more than 14 days. The claimant's duties were taken over by another employee, hallmarks of a transfer.

p. 4
02

Underpayment and housing allowance on alleged wrong grade

Holding

Claim dismissed - contract fully performed; court cannot rewrite the contract

Reasoning

The claimant was employed as a maintenance supervisor on a gross salary regularly reviewed upwards until retirement. He admitted signing the letter of employment accepting the position. A claim for underpayment arises only under the contract of service, and having signed, the claimant accepted its terms. The housing allowance claim, being pegged on the alleged wrong grade, fell with it.

p. 4
03

Jurisdiction over unremitted income tax claim

Holding

Court has no jurisdiction over the tax dispute

Reasoning

The court stated it is not an expert on tax matters, has no capacity to determine whether employment was the claimant's only income, and is not an agent of the KRA. The tax claim should be pursued before the KRA tax appeals tribunal or the commercial courts.

p. 4
04

Jurisdiction over pension underpayment claim

Holding

Court has no jurisdiction over pension scheme trustee-member disputes

Reasoning

Relying on the Supreme Court's decision in Albert Chaurembo Mumba, the court held that once a member becomes a pensioner the employer-employee relationship ends and becomes one of trustee and beneficiary governed by the Retirement Benefits Act, the Trustees Act and trust common law; the ELRC Act confers no jurisdiction over such disputes. The claimant should approach the scheme trustees or the Retirement Benefits Authority.

p. 4

Legal principles established

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  • Once a member becomes a pensioner, the relationship with the sponsor is trustee-beneficiary governed by the Retirement Benefits Act and the Trustees Act, and the ELRC has no jurisdiction over pension scheme trustee-member disputes
  • A claim for underpayment arises only under the contract of service; where an employee signs the contract accepting the terms, the court cannot rewrite the contract
  • Per diem is payable only for out-of-station duty not exceeding 14 days, not for a temporary transfer to a new duty station; transfer of employees is a prerogative of the employer

Court orders

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  1. 1.The entire claim is dismissed
  2. 2.No order as to costs
Jurisdiction invoked
Employment and Labour Relations Court Act (employment dispute); court expressly declined jurisdiction over tax and pension claims

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, "Kinuthia v Nairobi City Water and Sewerage Company Limited (Employment and Labour Relations Cause 66 of 2019) [2025] KEELRC 622 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/622/eng@2025-02-28

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