Kawinzi v East Africa Portland Cement (Cause 24 of 2019) [2025] KEELRC 1109 (KLR)
The bottom line
#Retiring employees in Kenya are entitled to gratuity immediately upon retirement, and late payment attracts court-rate interest even after a settlement.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to interest on gratuity paid after retirement
The Claimant was entitled to gratuity immediately upon retirement on 31/12/2017; the Respondent's breach in delaying payment in three instalments entitles the Claimant to interest at court rates from the date of retirement until full payment on 20/2/2019.
The contract of employment required gratuity to be paid upon retirement on 31/12/2017. The Respondent paid in instalments, the last only on 20/2/2019, because of financial difficulties. The Claimant was forced to file suit due to this breach. Consent settlement did not extinguish the contractual entitlement, so interest compensates the Claimant for the period of delayed payment only.
Costs where the suit was settled by consent
The general rule that costs follow the event is displaced in part: in recognition of the Respondent's goodwill in settling, the Claimant gets only half the costs.
Section 27 of the Civil Procedure Act makes costs discretionary and generally to follow the event. The Respondent argued that awarding costs against a party who settled in good faith discourages settlement. The court, while encouraging voluntary settlement, was cognisant of the expense the Claimant incurred because of delayed payment, and balanced these considerations by awarding half the costs.
Legal principles established
#- Gratuity is due and payable immediately upon retirement under the contract of employment, and delayed payment attracts interest
- Consent settlement of a suit does not extinguish the underlying contractual obligations and entitlements of the parties
- Although costs follow the event under section 27 of the Civil Procedure Act, the court may depart from the general rule where a respondent settles a claim in good faith, as an incentive to settlement
Court orders
#- 1.The Claimant is awarded interest at court rates on the gratuity from the date of retirement (31st December 2017) to 20th February 2019 when the amount was fully paid
- 2.The Claimant is awarded half the costs of the suit, to be taxed accordingly
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over a settled employment claim (gratuity) with only interest and costs outstanding
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kawinzi v East Africa Portland Cement (Cause 24 of 2019) [2025] KEELRC 1109 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1109/eng@2025-04-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.