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ELRCPartially AllowedNot stated in the judgment· [2025] KEELRC 768 (KLR)

Kigaaru v Ministry of Works Sports Club (Cause E759 of 2022) [2025] KEELRC 768 (KLR)

Employment and Labour Relations Court
14 March 2025
HWHellen Wasilwa
3,716 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer was ordered to pay a former chef nearly Kshs 490,000 because it could not undo a gratuity figure it had already put in writing.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent sports club as a chef/cook for over twenty years, was issued a retirement notice in September 2017 effective 31st December 2017. By a letter dated 18th December 2017 the Respondent communicated gratuity of Kshs 334,533.30 calculated at 26 days per year worked, but this was never paid. The Claimant sued for gratuity, accumulated leave and off days (Kshs 53,930), overtime (Kshs 11,625), PAYE deductions of Kshs 100,000 not remitted to KRA, and welfare loan deductions of Kshs 90,000 not remitted, totalling Kshs 590,088.30, plus NHIF reimbursement, costs and interest. The Respondent admitted owing gratuity but contended the correct rate was 20 days per year because the Claimant was not a civil servant, calculated its offer at Kshs 220,126.75 (after refunding Kshs 92,706 in statutory deductions), and asserted the contract provided no overtime and that welfare remittances had been made. The court found the Claimant proved his claim from the Respondent's own documents. There was no evidence the original gratuity letter was altered or revoked, so gratuity was payable at the communicated figure. Overtime and leave dues were verified from the Respondent's memos, and the unremitted welfare loan deductions were refundable. The PAYE claim fell away as the Kshs 92,706 refund had been made and the claim abandoned. The court awarded Kshs 490,088.30 with costs and interest at court rates from the date of judgment. Judgment was delivered virtually at Nairobi on 14th March 2025 by Hellen Wasilwa, Judge.

Key legal issues

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01

Whether the Respondent could reduce the gratuity from the 26-day to the 20-day calculation after communicating the 26-day figure

Holding

The court held the Respondent bound by its letter of 18th December 2017 and awarded gratuity of Kshs 334,533.30

Reasoning

The Respondent admitted owing gratuity but contended it should be recalculated at 20 days per year because the Claimant was not a civil servant. The court found no evidence that the original letter of 18th December 2017 was altered or revoked, and its own witness admitted in cross-examination that no formal revocation had been made. The communicated gratuity therefore remained payable.

p. 7
02

Whether leave, off-day and overtime dues were proved

Holding

The court found these payable, having been verified from the Respondent's own documents (memos confirming 84 accrued leave days at Kshs 53,930 and overtime of Kshs 11,625)

Reasoning

The memos confirming overtime and accrued leave originated from the Respondent, which did not dispute their authenticity. The Respondent's assertion that the contract did not provide for overtime could not displace its own documents verifying the sums. The court accordingly awarded leave dues and overtime pay in the amounts confirmed by the memos.

p. 7
03

Whether welfare loan deductions of Kshs 90,000 not remitted are refundable

Holding

The court held the Claimant entitled to a refund of the Kshs 90,000 deducted but not remitted

Reasoning

The Respondent deducted Kshs 5,000 monthly from salary towards a Welfare Shares loan but never remitted the amounts. The Respondent claimed payments were made by cheque through Absa Bank but produced no bank statement or copies of cheques to substantiate this. Unremitted salary deductions must be refunded to the employee.

p. 7

Legal principles established

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  • Where an employer has calculated and communicated a gratuity entitlement and never formally revoked that communication, it remains bound to pay the amount as stated
  • An employer who deducts loan repayments from salary but fails to remit them must refund the amounts to the employee

Court orders

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  1. 1.The Respondent to pay the Claimant gratuity of Kshs 334,533.30
  2. 2.The Respondent to pay the Claimant leave dues of Kshs 53,938
  3. 3.The Respondent to pay the Claimant overtime pay of Kshs 11,625
  4. 4.The Respondent to refund loan deductions made and not remitted of Kshs 90,000
  5. 5.Total award of Kshs 490,088.30 payable in total as PAYE was already deducted
  6. 6.The Respondent to pay costs of the suit
  7. 7.Interest on the award at court rates with effect from the date of the judgment
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court over a memorandum of claim for terminal dues

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, "Kigaaru v Ministry of Works Sports Club (Cause E759 of 2022) [2025] KEELRC 768 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/768/eng@2025-03-14

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