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ELRCPartially AllowedCause No E045 of 2025· [2025] KEELRC 2992 (KLR)

Ogutu v Milly Class Works Limited (Cause E045 of 2025) [2025] KEELRC 2992 (KLR)

Employment and Labour Relations Court
30 October 2025
2,896 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court awarded a 20-year unionised employee Ksh. 293,661.60 in gratuity but held he resigned, cutting notice pay and unfair termination claims.

What this practically means

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Executive summary

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The claimant, an electrical supervisor employed by the respondent from 2004 and a member of the Kenya Chemical Workers Union, claimed unfair termination of employment. After taking leave in March 2024 and further leave expiring 8 April 2024, he failed to resume work, seeking an informal extension of unpaid leave. The respondent reported him to the labour officer for abscondment and issued a notice to show cause, but the claimant was not personally served or heard. On 25 May 2024 the claimant reported back, cleared, and was recorded as having resigned; he was paid Ksh. 144,207.60 in terminal dues and salary arrears. He claimed notice pay, gratuity, salary arrears and 12 months' compensation for unfair termination. The respondent counterclaimed for two months' notice pay under clause 20(c) of the CBA and challenged the court's jurisdiction under Gazette and Legal Notice No. 6024 of 2018, arguing the claimant's wage was below the Ksh. 80,000 threshold for magistrates' courts. The court held it had exclusive jurisdiction over trade disputes where a CBA governs the employment. It found the respondent had failed to follow due process under sections 35 and 41 of the Employment Act, making the report to the labour officer premature, but held the claimant had resigned voluntarily. Judgment was entered for the claimant for gratuity of Ksh. 293,661.60 under clause 23 of the CBA (18 days' pay for 20 years), subject to section 49(2) of the Employment Act. The counterclaim succeeded for Ksh. 48,947.60 in notice pay. The payments were to be offset, whichever is higher, and each party was to bear its own costs.

Key legal issues

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01

Jurisdiction of the ELRC over a unionised employee earning below Ksh. 80,000

Holding

The court has exclusive jurisdiction over trade disputes where a CBA governs employment relations; Gazette and Legal Notice No. 6024 of 2018 concerns employment disputes, not trade disputes

Reasoning

The claim was founded on the fact that the claimant was unionised under the Kenya Chemical Workers Union and that a CBA governed his terms and conditions of employment. Gazette and Legal Notice No. 6024 of 2018 governs employment disputes regulated under the Employment Act, whereas trade disputes are regulated under the Labour Relations Act. Since the claimant relied on CBA terms and the union had sought a meeting, the ELRC is the primary forum regardless of the wage threshold.

p. 5
02

Whether the respondent terminated the claimant's employment unfairly

Holding

The respondent failed to follow due process under sections 35 and 41 of the Employment Act - the notice to show cause lacked the claimant's address, the claimant was not personally served or heard, and the report to the labour officer was premature - but the claimant ultimately resigned

Reasoning

The respondent issued a notice to show cause dated 15 April 2024 without the claimant's forwarding address, contrary to section 10(3) of the Employment Act, and the claimant was never personally served or invited to a hearing. Without due process under sections 35 and 41, the notice to the labour officer dated 6 May 2024 was premature. However, on 25 May 2024 the claimant cleared and indicated he had resigned, and although he said the resignation was in error, he did not correct that fact; the court treated him as having resigned.

p. 5
03

Whether the claimant is entitled to gratuity under the CBA

Holding

Upon his voluntary resignation, the claimant is entitled to benefits under clause 23 of the CBA, including gratuity at 18 days' pay for every year worked, calculated at 20 years' service on his last wage of Ksh. 24,471.80, being Ksh. 293,661.60

Reasoning

The respondent did not invoke the summary dismissal right under section 44 of the Employment Act; instead the claimant's exit was treated as a voluntary resignation. Under clause 23 of the CBA, gratuity is payable at the end of employment at 18 days for each year worked. The claimant served from 1 March 2004 to 8 April 2024, 20 full years, yielding gratuity of Ksh. 293,661.60. The terminal dues paid on 4 June 2024 (Ksh. 144,207.60) covered only salary arrears and did not include gratuity.

p. 6
04

The respondent's counterclaim for notice pay under clause 20(c) of the CBA

Holding

The counterclaim succeeded; the claimant, having resigned, was required under clause 20(c) of the CBA to give two months' notice, valued at Ksh. 48,947.60

Reasoning

The CBA governing the claimant's employment required an employee resigning to give two months' notice under clause 20(c). The claimant resigned without notice. The court assessed the notice pay at Ksh. 48,947.60 and entered judgment for the respondent on the counterclaim.

p. 6

Legal principles established

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  • The ELRC has exclusive jurisdiction over trade disputes where a CBA governs employment relations, even where the employee's wage is below the Ksh. 80,000 threshold in Gazette and Legal Notice No. 6024 of 2018
  • Failure to report to work when required constitutes a breach of a fundamental term and gross misconduct under section 44(3) and 44(4)(a) of the Employment Act, but the employee must still be given notice under section 41(2) to make representations

Court orders

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  1. 1.Judgment entered for the claimant for payment of gratuity in the amount of Ksh. 293,661.60 to be paid upon application of section 49(2) of the Employment Act
  2. 2.Judgment entered for the respondent against the claimant on the counterclaim for the sum of Ksh. 48,947.60
  3. 3.The parties shall offset the payments, whichever is higher
  4. 4.Each party to bear its own costs

Authorities

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Legislation

  • Employment Actsection 35
  • Employment Actsection 41
  • Employment Actsection 41(2)
  • Employment Actsection 44
  • Employment Actsection 44(3)
  • Employment Actsection 44(4)(a)
  • Employment Actsection 47(5)
  • Employment Actsection 49(2)
  • Employment Actsection 10(3)
  • Labour Relations Actnot specified
  • Gazette and Legal Notice No. 6024 of 2018wage threshold for magistrates' courts (Ksh. 80,000)

Cases cited (4)

  • Okode v Tejani
    [2025] eKLR
  • Ochieng Odinyo v University of Nairobi
    [2021] eKLR
  • Kotecha Wholesalers v Ochieng
    [2025] eKLR
  • Corrugated Sheets Limited v Ngao
    [2025] eKLR
Jurisdiction invoked
Exclusive jurisdiction of the ELRC over trade disputes where a CBA governs employment relations; the claimant was unionised under the Kenya Chemical Workers Union and relied on CBA terms, notwithstanding Gazette and Legal Notice No. 6024 of 2018's wage threshold for magistrates' courts

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, "Ogutu v Milly Class Works Limited (Cause E045 of 2025) [2025] KEELRC 2992 (KLR)", Case Analysis (2025). Cause No E045 of 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2992/eng@2025-10-30

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