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ELRCPartially AllowedNot stated in the judgment· [2025] KEELRC 2066 (KLR)

Kenya Engineering Workers Union v M/S Insteel (K) Limited; Makedi (Applicant) (Employment and Labour Relations Cause E654 of 2020) [2025] KEELRC 2066 (KLR)

Employment and Labour Relations Court
10 July 2025
434 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~2 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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This ruling by the Employment and Labour Relations Court at Nairobi resolves a dispute over the computed decretal sum due to the Applicant, Peter Oduor Makedi, one of the grievants represented by the Claimant union, which obtained judgment against the Respondent on 15th December 2022 and paid out the decretal sum for all grievants except him. The Applicant accepted the union's tabulation of basic wage, house allowance, salary arrears, overtime pay, leave pay, recognition long service award and notice pay, but disputed three items. First, on severance pay he claimed 11 years of service (Kshs. 388,367.00) against the union's 10 years (Kshs. 217,000.00); the court held that the schedule in Annexture 9 to the statement of claim, referred to in the judgment, recorded 10 years, a figure neither disputed nor amended before judgment, and so severance must be computed on 10 years. Second, he sought compensation of Kshs. 106,191.00 rather than Kshs. 106,188.00; the court agreed, holding that compensation is calculated on gross salary (Kshs. 35,397 x 3 = Kshs. 106,191.00) payable less PAYE. Third, he sought interest at 14% from the termination date of 18th October 2019; the court held interest runs at court rates from that date, but the 14% rate applies only from the date it was gazetted, not before. The court concluded the matter and ordered the union to remit all unpaid dues to the Applicant forthwith. No costs order was made.

Key legal issues

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01

Computation of severance pay - years of service

Holding

Severance/gratuity is to be calculated on 10 years of service, per the undisputed schedule filed before judgment

Reasoning

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.

p. 2
02

Computation of compensation award

Holding

Compensation of 3 months' gross salary equals Kshs. 106,191.00

Reasoning

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.

p. 2
03

Rate and commencement of interest

Holding

Interest at court rates runs from 18th October 2019, with the 14% rate applying only from its gazettement date

Reasoning

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.

p. 2

Legal principles established

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  • 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

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  1. 1.Compensation fixed at Kshs. 106,191.00, being gross salary of Kshs. 35,397 multiplied by 3
  2. 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. 3.Severance/gratuity pay to be calculated for a period of 10 years and not 11 years
  4. 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

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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, "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.