Shem Andrew Gichimu v Higher Education Loans Board
The bottom line
#Kenya's Employment Court ruled that HELB must pay a reinstated employee full salary increments, benefits, interest and properly computed tax, not just a lump sum.
What this practically means
#Executive summary
#Key legal issues
#Scope of the directive that the claimant be treated as if the contract of employment had not been terminated at all
The judgment of Ongaya J was clear; in computing what is payable, the Respondent must consider increments, accrued interest, costs and other benefits payable under the contract to place the applicant as if never terminated.
The Court reviewed the judgment of 16th November 2023 and its award of reinstatement with full back payment less PAYE plus discrimination compensation. Rather than quantifying the disputed benefits itself, it listed seven heads to be considered in computation, including annual increments, interest on late payment, costs and other contract benefits, effectively endorsing a continuous-employment reading of order (2).
Tax (PAYE) computation of the back pay lump sum
The Court directed that tax computation must ensure adherence to the judgment as delivered, without ruling definitively on whether the flat 35% deduction was lawful.
The Applicant argued the Respondent erred by applying a flat 35% PAYE rate on the lump sum instead of monthly progressive bands under the Income Tax Act; the Respondent contended tax disputes lie with KRA and the Court lacks jurisdiction. The Court did not resolve the jurisdictional challenge but included tax computation among the matters to be considered, deferring the mechanics to the parties.
Whether the application under Rule 74(1)(c) was competent or a disguised review
The Court entertained the application as one seeking clarification and offered guidance, without finding it an abuse of process or outside Rule 74.
The Respondent argued the application sought to vary, enlarge and reopen a final judgment, that the Court was functus officio, and that quantified back pay exhausted the monetary effect of order (2). The Court did not expressly determine these objections; it treated the application as seeking clarity and provided an interpretive framework for the parties.
Legal principles established
#- A reinstatement order treating an employee as if the contract had not been terminated requires computation of increments, interest, costs and other contractual benefits to restore the employee to the position he would have occupied
Court orders
#- 1.Guidance issued on the seven matters to be considered in computing what is payable under the judgment of 16th November 2023, including increments, interest, costs, other contract benefits and tax computation
- 2.Parties urged to work together and ensure what is payable has been done
- 3.Costs in the cause
- Jurisdiction invoked
- Rule 74(1)(c) of the Employment and Labour Relations Court (Procedure) Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shem Andrew Gichimu v Higher Education Loans Board", Case Analysis (2026). ELRC Cause No. 769 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2759/eng@2026-10-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.