Kariuki v Board of Management, Gichuru High School

4. Cost of the suit Claimant’s Case 2 The Claimant avers that he was employed by the Respondent as a Groundsman in 1986 at a starting salary of Kshs. 600 per month. 3 He avers that he served the Respondent continuously until his retirement with effect from 1 st January 2022 pursuant to a retirement letter dated 30 th November 2021. At the time of retirement, he was earning a basic salary of Kshs. 10,949, a house allowance of Kshs. 1,800 and a medical allowance of Kshs. 350. 4 The Claimant states that upon his retirement, the Respondent informed him that he was entitled to an ex gratia payment of Kshs. 81,000 for long service. 5 The Claimant avers that the Respondent neither explained the nature of the ex gratia payment nor the basis upon which the amount was computed. Consequently, he declined to receive the payment as he expected to be paid service gratuity rather than an ex gratia benefit. 6 It is the Claimant’s case that he sought clarification from the Respondent regarding his retirement benefits, but the Respondent maintained its position vide a letter dated 4 th January 2022, indicating that his retirement benefits were limited to his NSSF dues. Page 2 of 15

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7 The Claimant further asserts that the Respondent’s decision was discriminatory and inconsistent with its previous practice. He contends that, pursuant to circulars issued by the Ministry of Education, the Respondent had previously paid retiring employees service gratuity in addition to statutory benefits, and that he was unjustifiably denied similar treatment. 8 The Claimant avers that, being a member of the Union, he reported the dispute to it, whereupon the Union took up the matter with the Respondent through correspondence. However, despite the Union’s intervention, the Respondent maintained its position, prompting the Union to report the dispute to the Ministry for the appointment of a conciliator. 9 He contends that the conciliation process failed to resolve the dispute, culminating in the issuance of a certificate of unresolved dispute and a referral of the matter to this Court. 10 The Claimant further states that throughout his 35 years of service, he discharged his duties diligently and was never subjected to disciplinary action or issued with warnings. 11 It is the Claimant’s case that the Respondent failed to comply with the Ministry of Education Guidelines requiring educational institutions to maintain a savings account for Page 3 of 15

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personnel emoluments from which service gratuity is payable. It is his position that employees of educational institutions are entitled to both service gratuity from the employer and NSSF benefits, the latter being statutory in nature. 12 The Claimant therefore contends that the Respondent’s actions amount to unfair labour practices and unlawful discrimination. He prays that the Court finds that the Respondent unlawfully discriminated against him and orders it to pay him his retirement benefits, including service gratuity, for his 35 years of service. Respondent’s Case 13 In opposition to the claim, the Respondent filed its Response to Statement of Claim dated 21st January 2025. 14 The Respondent avers that the Claimant is not entitled to service gratuity as sought. It avers that throughout the Claimant’s employment, it remitted NSSF contributions on his behalf and, by virtue of Section 35(6)(a) of the Employment Act, the Claimant is consequently disentitled from claiming service gratuity. 15 The Respondent further states that, upon the Claimant’s retirement, it offered him an ex gratia payment of Kshs. 81,000 as a gesture of goodwill in recognition of his long service. It contends that the ex gratia payment was not Page 4 of 15

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intended to substitute service gratuity and maintains that the Claimant declined to accept the payment. 16 On the claim for terminal leave, the Respondent avers that the Claimant had exhausted all his leave days by the time of his retirement and therefore had no outstanding leave entitlement. It puts the Claimant to strict proof of the alleged accrued leave days. 17 The Respondent consequently contends that the Claimant is not entitled to any of the reliefs sought and urges the Court to dismiss the suit with costs, terming it frivolous, vexatious and an abuse of the court process. Evidence in Court 18 The Claimant (CW1), adopted his witness statement dated 12th November 2024 as his evidence in chief and produced his list of documents dated 13 th November 2024 as his exhibits. 19 During cross-examination, CW1 testified that the Respondent discriminated against him as he was not paid his ex-gratia payment. Other employees who were employed before and after him were paid including Joseph Kamau, Josephat Muigai and Eliud Mwaura. He relied on his exhibit under page 16 of his list of documents which is an affidavit sworn by Joseph Kamau dated 30 th September 2023 to support this position. Page 5 of 15

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20 He testified that he did not produced any evidence of any pending leave days to support his claim of unpaid leave days. 21 CW1 testified that he was not aware that he was to write a letter so that he is paid his gratuity. 22 The Respondent’s witness, Joseph Ngugi (RW1), stated that he is the School Principal of Gichuru High School. He joined the school in 2017. 23 He adopted his witness statement dated 21st January 2025 as his evidence in chief. 24 Upon cross-examination, RW1 testified that the Board was willing to pay ex-gratia as gratuity but it was not a term in the employment contract, the same was just a way to appreciate its employees as a sign of good will. Claimants’ Submissions 25 The Claimant submitted on three issues: whether the Claimant was entitled to service gratuity upon retirement; whether payment of NSSF benefits bars payment of service gratuity; whether the Claimant is entitled to the remedies sought. 26 On the first issue, the Claimant submitted that the Respondent, being a public Page 6 of 15 educational institution

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established under the Basic Education Act, 2013, is bound by the statutory and policy framework governing the employment of non-teaching staff. Under Sections 55 and 62 of the Act, Boards of Management are mandated to recruit, employ and remunerate non-teaching staff in accordance with the Act and the guidelines issued by the Ministry of Education. 27 It was submitted that the Ministry's circulars, particularly those dated 10th January 2005 and 24th November 2014, required public educational institutions to establish personnel emolument accounts specifically for payment of service gratuity to retiring non-teaching staff. In particular, reliance was placed on the provision that: “This savings account shall hold funds for non-teaching staff service gratuity and only withdrawn to make payment to retirees.” 28 The Claimant submitted that the Respondent consistently complied with these circulars by paying service gratuity to other retiring employees, thereby creating a legitimate expectation that he too would receive similar treatment upon retirement. Therefore, the Respondent's refusal to pay him service gratuity departed from its previous practice and amounted to unequal treatment. 29 In support of this position, reliance was placed on Gichuki v Board of Management Gachatha High School [2025] KEELRC 231 (KLR), where the Court held that a grievant who had served for over 38 years was entitled to Page 7 of 15

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service gratuity pursuant to the applicable Ministry of Education guidelines. 30 It was further submitted that the Respondent failed to issue the Claimant with a written contract of employment, a letter of appointment or a GP 33 form, contrary to Section 9(2) of the Employment Act, 2007, which places the obligation upon an employer to prepare a written contract containing the particulars of employment. 31 The Claimant argued that, notwithstanding the absence of a written contract, the Ministry's circulars and the Respondent's established practice governed his entitlement to service gratuity. Reliance was also placed on Alfred O. Amombo v Lake Victoria North Water Services Board [2020] KEELRC 364 (KLR) to emphasize that gratuity is payable where provided for by the governing terms and conditions of employment. 32 On the second issue, the Claimant submitted that the Respondent has misconstrued Section 35(6) of the Employment Act. He argued that the provision only excludes an employee from claiming statutory service pay where NSSF contributions have been made, but does not extinguish an employee's entitlement to contractual or policy-based gratuity. 33 In this regard, reliance was placed on Section 26(2) of the Employment Act, which provides that where terms and Page 8 of 15

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conditions of service contained in any written law, collective agreement, contract or court award are more favourable to an employee than the minimum standards prescribed under the Act, the more favourable terms shall apply. 34 The Claimant further relied on Bamburi Cement Limited v William Kilonzi [2016] eKLR, Kenya Ports Authority v Festus Kipkorir Kiprotich [2014] eKLR, and Rift Valley Railways (Kenya) Ltd v Hawkins Wagunza Musonye & another [2016] eKLR for the proposition that NSSF contributions only preclude claims for statutory service pay and do not defeat entitlement to gratuity or other terminal benefits arising from an employer's policy, contractual arrangement or established practice. 35 The Claimant submitted that the Respondent could not rely on its remittance of NSSF contributions to avoid compliance with the Ministry of Education guidelines. 36 It is the Claimant’s submission that the Respondent's refusal to pay service gratuity constituted an unfair labour practice and discrimination contrary to Articles 27 and 41 of the Constitution. Het hus urged the Court to find that he was entitled to service gratuity in addition to his NSSF benefits and to grant the reliefs sought. Respondent’s Submissions Page 9 of 15

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37 The Respondent submitted on four issues: whether the Claimant was entitled to service gratuity upon retirement; whether payment of the NSSF benefits bars the payment of service gratuity Claim; whether the alleged payment to a former colleague has been proved thereby creating a legitimate expectation founded on practice; and whether the claimant is entitled to the remedies sought. 38 On the first issue, the Respondent submitted that the Claimant had failed to establish any legal basis for payment of service gratuity. It was argued that gratuity is not a statutory entitlement under the Employment Act, 2007, but is only payable where it is expressly provided for in a contract of employment, a collective bargaining agreement, a statute or an employer's policy. The Respondent maintained that the Claimant neither produced a contract nor demonstrated the existence of any binding policy or registered collective bargaining agreement conferring such an entitlement. It cited Bamburi Cement Limited v William Kilonzi [2016] eKLR, where the Court observed that: “Turning to the award of gratuity, the first thing that we must emphasize is that gratuity, as the name implies is a gratuitous payment for services rendered... as a lump sum amount at the discretion of an employer.” 39 The Respondent further relied on Pathfinder International Kenya Limited v Stephen Ndegwa Page 10 of 15

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Mwangi [2019] eKLR, where the Court of Appeal held that gratuity is only payable where provided for by contract, a collective bargaining agreement or statute and that the Employment Act does not impose a mandatory obligation upon employers to pay gratuity. 40 The Respondent further submitted that the Respondent had nonetheless offered the Claimant an ex gratia payment of Kshs. 81,000 in recognition of his 35 years of service, which the Claimant declined. The Respondent contended that the ex gratia payment was a discretionary goodwill payment and could not be construed as an admission of liability or evidence of an entitlement to service gratuity. 41 Regarding the Ministry of Education circulars relied upon by the Claimant, the Respondent submitted that they had been misconstrued. It argued that the circulars expressly provide that employees who were employed before 1992 and who possess GP 33 forms are entitled to service gratuity payable by the Ministry of Education Headquarters rather than by Boards of Management. The Respondent therefore contended that, if the Claimant considered himself eligible under the Ministry guidelines, his claim lay against the Ministry and not the Respondent. 42 On the second issue, the Respondent submitted that Section 35(6) of the Employment Act excludes employees Page 11 of 15

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who are members of NSSF from claiming statutory service pay, thereby preventing double social security benefits. It relied on Board of Management Ng’araria Girls Secondary School v KUDHEIHA workers [2017] KECA 15 (KLR), where the Court of Appeal held that employees covered under NSSF or similar statutory schemes are not entitled to service pay unless a more favourable contractual or negotiated scheme exists. 43 The Respondent acknowledged that NSSF membership does not necessarily extinguish contractual gratuity, as held in William Kilonzi v Bamburi Cement Limited [2016] eKLR, but submitted that the decision was distinguishable because the gratuity claim in that case arose from an existing contractual framework. It argued that the Claimant was improperly attempting to elevate statutory service pay into contractual gratuity without demonstrating any contractual or policy basis for such entitlement. 44 The Respondent further submitted that the Claimant could not rely on any alleged Memorandum of Agreement or Collective Bargaining Agreement as no evidence had been produced to show that such an agreement had been executed between the parties or registered in accordance with Section 60 of the Labour Relations Act. It relied on Kenya Union of Commercial Food And Allied Workers v Kenya National Library Service [2016] Page 12 of 15

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eKLR and Kenya Engineering Workers Union v Kenya General Industries Limited [2024] KEELRC 13556 (KLR) where the courts held that a collective bargaining agreement only acquires binding force upon registration with the Employment and Labour Relations Court. Consequently, it was argued that any unregistered agreement could not confer enforceable rights or create a legitimate expectation against the Respondent. 45 The Respondent also disputed the Claimant's assertion that its past practice created a legitimate expectation of payment of gratuity. It submitted that the Claimant had failed to prove any consistent practice of gratuity payments to similarly situated employees. Reliance was placed on Board of Management Ng’araria Girls Secondary School v KUDHEIHA workers [2017] KECA 15 (KLR), where the Court of Appeal held that a claim founded on previous payments must be supported by specific evidence identifying the beneficiaries and demonstrating the alleged practice. 46 It was argued that the Claimant merely relied on the affidavit of a former employee, Joseph Kamau Michoi, without producing documentary evidence of the alleged gratuity payment, disclosing the amount paid or calling the deponent as a witness for cross-examination. The Respondent therefore submitted that the allegation of an Page 13 of 15

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established practice remained unproved and offended Sections 107 and 109 of the Evidence Act, which place the burden of proof upon the party asserting a fact. 47 It is therefore the Respondent’s submission that the Claimant had failed to establish any contractual, statutory or policy basis for payment of service gratuity. It maintained that the ex gratia payment offered was purely discretionary, that no enforceable collective bargaining agreement or employer policy had been demonstrated, and that the Claimant's membership in NSSF excluded any entitlement to statutory service pay. The Court was accordingly urged to dismiss the claim with costs. 48 I have examined all the evidence and submissions of the parties herein. The claim by the claimant is that he has been discriminated against by the respondent who have paid gratuity to other employees who left service and excluded him. The claimant however failed to produce any evidence to this effect and which left this preposition not established. 49 That notwithstanding, the claimant did not deny that he was a member of NSSF. By virtue of section 35 of the Employment Act the claimant is not entitled to payment of gratuity as he was a member of NSSF. Section 35 (6)(d) states as follows: This section shall not apply where an employee is a member of (d) the National Social Security Fund. Page 14 of 15

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50 The claimant did not produce any other legal basis that would entitle him to payment of gratuity. The pay slip produced show that he was a member of NSSF and his NSSF remittances were made. This being the position, I find the claim without merit and the same is dismissed accordingly. There shall be no order of costs. Dated, Signed and Delivered virtually at Nairobi this 16th Day of September 2026. HELLEN WASILWA JUDGE Page 15 of 15

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