Kenya Engineering Workers Union v M/S Insteel (K) Limited; Makedi (Applicant) (Employment and Labour Relations Cause E654 of 2020) [2025] KEELRC 2066 (KLR)
The bottom line
#A Kenyan employment court fixed severance at 10 years, compensation at Kshs. 106,191 on gross salary, and ruled higher interest rates aren't applied retroactively.
What this practically means
#Executive summary
#Key legal issues
#Computation of severance pay - years of service
Severance/gratuity is to be calculated on 10 years of service, per the undisputed schedule filed before judgment
The court referred to the schedule in Annexture 9 to the statement of claim, referred to in the judgment at paragraph 53, which recorded 10 years. The applicant did not dispute or seek amendment of that figure before judgment, so he is bound by it. His claim of 11 years was rejected as unnecessary dispute.
Computation of compensation award
Compensation of 3 months' gross salary equals Kshs. 106,191.00
The judgment awarded 3 months' compensation. Compensation is calculated on gross salary (basic wage plus house allowance) and payable less PAYE. Basic wage Kshs. 27,229 plus house allowance Kshs. 8,168 gives Kshs. 35,397; multiplied by 3 the correct figure is Kshs. 106,191.00, resolving the Kshs. 3 discrepancy in the applicant's favour.
Rate and commencement of interest
Interest at court rates runs from 18th October 2019, with the 14% rate applying only from its gazettement date
The applicant agreed with tabulation except on interest, seeking 14% from the termination date of 18/10/2019. The court held interest per the judgment runs at court rates from that date, but the increase of the court rate from 12% to 14% operates only prospectively from the date the new rate was gazetted.
Legal principles established
#- Compensation under a judgment is calculated on gross salary and is payable less PAYE
- A change in the court rate of interest is not retrospective; the new rate applies only from the date it was gazetted
Court orders
#- 1.Compensation fixed at Kshs. 106,191.00, being gross salary of Kshs. 35,397 multiplied by 3
- 2.Interest at court rates from 18th October 2019, with the 14% rate applying only from the date it was gazetted and not before
- 3.Severance/gratuity pay to be calculated for a period of 10 years and not 11 years
- 4.The Claimants' union to remit all dues unpaid to the Applicant forthwith
- Jurisdiction invoked
- Employment and Labour Relations Court supervising execution of its own decree of 15th December 2022 (specific provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Engineering Workers Union v M/S Insteel (K) Limited; Makedi (Applicant) (Employment and Labour Relations Cause E654 of 2020) [2025] KEELRC 2066 (KLR)", Case Analysis (2025). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2066/eng@2025-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.