Mokua & 5 others v Eastern Africa Grain Council (Cause E106 of 2023) [2025] KEELRC 2849 (KLR)
The bottom line
#Kenya's Employment Court ruled that an employer must pay promised gratuity even when it claims financial hardship, awarding three former staff over Kshs 2.4 million plus interest.
What this practically means
#Executive summary
#Key legal issues
#Whether gratuity was an enforceable contractual entitlement
The Court found gratuity was an express term of the contracts and the Claimants proved their claim on a balance of probabilities
Clause VIII of the contracts expressly provided for gratuity at 20% of monthly base salary. At termination the only condition attached was completion of the clearance process, with no reference to financial hardship. The Respondent's letters of 20th July 2020 and 18th November 2020 acknowledged the arrears and undertook to pay, constituting clear evidence of liability.
Whether financial constraints excuse non-payment of gratuity
No - financial hardship does not absolve contractual obligations
While the Respondent's funding clause linked sustainability to availability of funds, the termination notices and subsequent written commitments to pay made no reference to financial hardship as a hindrance. The Court held the explanation of financial constraints, though possibly true, did not release the Respondent from its contractual obligations.
Legal principles established
#- Financial constraints do not absolve an employer from its contractual obligation to pay gratuity once it has acknowledged and committed to pay it
- Gratuity becomes an enforceable contractual right once incorporated into terms of employment
Court orders
#- 1.Judgment entered in favour of the 1st, 5th and 6th Claimants
- 2.Respondent to remit the 1st Claimant's gratuity of Kshs 851,731.27
- 3.Respondent to remit the 5th Claimant's gratuity of Kshs 1,097,914.62
- 4.Respondent to remit the 6th Claimant's gratuity of Kshs 542,363.49
- 5.Interest to accrue on the above amounts at court rates from the date of filing the suit until payment in full
- 6.Respondent to bear the costs of the claim, including the costs of the 2nd, 3rd and 4th Claimants
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; claim for gratuity as contractual entitlement)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mokua & 5 others v Eastern Africa Grain Council (Cause E106 of 2023) [2025] KEELRC 2849 (KLR)", Case Analysis (2025). Cause No E106 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2849/eng@2025-10-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.