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ELRCPartially AllowedMemorandum of Appeal dated 22nd May 2024 (number not stated in judgment)· [2025] KEELRC 1199 (KLR)

Mascor Kenya Limited v Odhiambo (Appeal E031 of 2024) [2025] KEELRC 1199 (KLR)

Employment and Labour Relations Court
30 April 2025
JRJAMES RIKA
686 words in judgment
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The bottom line

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Kenya's Employment Court confirmed that leave allowance is only payable if written into an employment contract — it is not a statutory right like annual leave pay.

What this practically means

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Executive summary

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This is a first appellate judgment of the Employment and Labour Relations Court at Nakuru, delivered by James Rika, Judge, on 30th April 2025. The Appellant, a former employer, appealed against a decision of the Trial Court which had found in favour of the Respondent, a former employee, for unfair termination, awarding compensation and terminal benefits. Of the nine grounds of appeal, the parties agreed on all except Ground 4, challenging the award of leave allowances; the appeal was by consent determined on the Record of Appeal and written submissions. The court distinguished annual leave pay - a statutory benefit under Section 28 of the Employment Act payable as salary during leave or as encashment for unused leave - from leave allowance (leave travelling allowance), which is not a statutory minimum but a contractual benefit requiring agreement in individual contracts or collective bargaining agreements. The Respondent's contract of employment dated 26th January 2016 contained no leave allowance. The court further found the Trial Court's award of Kshs. 122,500 lacked foundation: it matched the un-amended claim rather than the amended claim of Kshs. 168,609, was misdescribed as unpaid annual leave, and pay slips from 2018 to 2020 showed the Respondent had actually received annual leave pay, while he conceded awareness of the SAGE leave application system showing he had taken leave days. The court allowed Ground 4, set aside the Kshs. 122,500 award, made no order on costs, and directed that the file be marked closed.

Key legal issues

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01

Distinction between annual leave pay and leave allowance

Holding

Annual leave pay is the salary paid to an employee while on leave or as compensation for unused leave (leave encashment), a statutory benefit under Section 28 of the Employment Act; leave allowance (leave travelling allowance) is a separate contractual benefit not provided for under the Act

Reasoning

The court distinguished the two benefits conceptually. Annual leave pay corresponds to the employee's salary for the leave period and is a statutory minimum under Section 28 of the Employment Act. Leave allowance, commonly leave travelling allowance, covers travel and other expenses during annual leave and is not among the Act's minimum standards; it is left to parties to negotiate in individual contracts or collective bargaining agreements. It must therefore appear in the contract of employment to be enforceable.

p. 2
02

Whether the Trial Court's award of Kshs. 122,500 had a foundation

Holding

The award had no foundation: it matched the un-amended claim rather than the amended claim, misdescribed the benefit, and pay slips showed the Respondent had been receiving annual leave pay

Reasoning

The Respondent originally pleaded unpaid leave allowance of Kshs. 122,500 but amended his claim to Kshs. 168,609 as unpaid leave allowance. The Trial Court awarded Kshs. 122,500, describing it as unpaid annual leave - a sum and description not matching the amended pleadings. Even assuming the dispute concerned annual leave pay, pay slips for various dates in 2018-2020 showed the Respondent received annual leave pay, and he conceded familiarity with the SAGE leave application system indicating he had taken leave days.

p. 2

Legal principles established

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  • Annual leave pay is a statutory benefit under Section 28 of the Employment Act, whereas leave allowance is a contractual benefit which must be negotiated and provided for in the contract of employment or a collective bargaining agreement
  • A trial court's award must be anchored on a benefit pleaded and proved; where leave was taken and paid for, no award for unpaid leave can stand

Court orders

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  1. 1.Ground [4] of the Memorandum of Appeal is allowed
  2. 2.Award of unpaid annual leave to the Respondent by the Trial Court at Kshs. 122,500 is set aside
  3. 3.No order on the costs
  4. 4.The file shall be marked as closed
On appeal from
Employment and Labour Relations Court (Trial Court - first instance)
not stated
Jurisdiction invoked
First appellate jurisdiction over an employment dispute; the appeal proceeds on the single contested Ground of the Memorandum of Appeal dated 22nd May 2024

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, "Mascor Kenya Limited v Odhiambo (Appeal E031 of 2024) [2025] KEELRC 1199 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 22nd May 2024 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1199/eng@2025-04-30

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