Damarys Wangui Kiarie v Tana and Athi Rivers Development Authority

3 She states that her employment status was subsequently changed to a contractual arrangement, as evidenced by a letter of appointment dated 28th December 2018, reference number P/NO. 0264(384), the terms of which stipulated a three-year contract, renewable based on performance. 4 The Claimant contends that under the said Letter of Appointment, her gross monthly salary was structured to progressively increase over the three-year period: Kshs. 152,060 in the first year (2019), Kshs. 165,700/ in the second year (2020), and Kshs. 180,660 in the third year (2021). 5 She avers that the Respondent implemented the agreed salary only for 2019, and that the increment due for 2020 was never effected, such that she continued to receive the 2019 salary of Kshs. 152,060 throughout that year, contrary to the express terms of her employment contract. 6 She further avers that the Respondent remained in breach up to June 2021, continuing to pay her Kshs. 152,060 instead of the contractually stipulated Kshs. 180,660, and that even from June 2021, when the full third-year salary of Kshs. 180,660 fell due, she was paid only Kshs. 165,700 per month for the period June to December 2021. Page 2 of 25

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7 It is the Claimant's case that, as a result of the Respondent's failure to implement the agreed annual increments for 2020 and 2021, she suffered financial loss in the form of unpaid salary differentials for each of those years, and she accordingly seeks payment of the difference between what she was contractually entitled to and what she was actually paid. 8 She further avers that this underpayment directly affected the computation of her gratuity and other terminal dues, calculated as they are on gross monthly remuneration, and she seeks a corresponding adjustment and payment of the resulting shortfall. 9 The Claimant states that she was a diligent and hardworking employee whose performance was always outstanding, and that it was on account of her dedication, commitment and exceptional performance that the Respondent introduced the annual salary increment in the first place. She avers that she discharged her duties faithfully until her retirement in May 2022. 10 The Claimant avers that on 3 rd February 2021 she wrote to the Managing Director requesting implementation of the annual salary increment for the period January 2020 to February 2021, and that on 27th January 2023 she wrote further to the Inspectorate of State Corporations requesting payment of the increment for the years it had not been effected. Page 3 of 25

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11 She states that the Respondent failed to respond to her request, prompting her to instruct an advocate to issue a demand letter dated 14th May 2024, to which the Respondent has, to date, not responded. 12 It is the Claimant's case that she is rightfully entitled, both by law and by contract, to the salary increment for the years 2020 and 2021, as agreed between herself and the Respondent, and that the Respondent has failed, neglected and/or refused to honour this commitment despite several demands and written notices to sue. 13 She contends that the Respondent's conduct is unjustified and amounts to a breach of the rules of natural justice and employment law. 14 The Claimant's claim is for the sum of Kshs. 4,024,791, being the salary increment, inclusive of gratuity, payable to her by the Respondent. She avers that there is no other claim pending in respect of the same subject matter and parties, and that the cause of action arose within the jurisdiction of this Court. Respondent’s Case 15 In opposition to the claim, the Respondent filed its Amended Reply to Memorandum of Claim dated 7 th July 2025. Page 4 of 25

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16 The Respondent avers that the Claimant was appointed on contract terms as Chief Manager, Human Resource and Administration with effect from 1st January 2019 for a period of three years, pursuant to a contract dated 1 st January 2019, and that she was thereafter granted a fivemonth extension as Director, Corporate Services, up to 31st May 2022. 17 The Respondent avers that the year 2020 coincided with the height of the COVID-19 pandemic, which significantly disrupted operations nationally and globally, and that as a result no salary increments were implemented for any employee across the organisation until July 2021. 18 It contends that the Claimant, who then held the position of Chief Manager, Human Resource and Administration, was fully cognizant of this situation, having actively participated in the decision-making and execution of the organisation-wide freeze, and is accordingly estopped from denying knowledge of it or asserting a contrary position. 19 The Respondent avers that the Claimant's basic pay was nonetheless adjusted upwards in July 2021 to Kshs. 167,700.00, and in January 2022 to Kshs. 180,660.00. It denies the Claimant's assertions regarding entitlement to a further increment and avers that she has failed to provide any evidence or computation substantiating the amount claimed. Page 5 of 25

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20 The Respondent asserts that the Claimant was fully paid all payable salary increments and dues, including gratuity, strictly in line with the contract dated 1 st January 2019 under Clause 13 and the extended contract dated 12 th January 2022 under Clause 16, the gratuity having been calculated at 31% of the total basic salary earned during the period of engagement. 21 The Respondent puts the Claimant to strict proof of her claimed diligence, performance, dedication averring that no and evidence exceptional has been presented to substantiate these allegations, and that as Chief Manager she was in any event subject to annual Performance Appraisal System evaluations, no evidence of an exceptional rating having been produced. 22 It further avers that paragraph 9 of the Claim, asserting that the Claimant held the position until September 2017, is inconsistent with paragraphs 3 and 4 of the Claim. 23 The Respondent denies any knowledge of the letter dated 27th January 2023 referenced in the Claimant's list of documents, averring that it is unsigned, calling its authenticity into question, and that the allegations in that regard lack specificity as to the relevant years or amounts claimed. 24 It denies that the Claimant made any request to which it failed to respond, and avers that neither the alleged Page 6 of 25

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request nor the demand letter dated 14 th May 2024 specifies the amount claimed. 25 The Respondent avers that the Claimant received gratuity payments exclusive of PAYE as follows: Kshs. 1,226,864 on 3rd March 2022, while she was still serving under the fivemonth extension of her contract as Director, Corporate Services; and a further Kshs. 189,606 on 24 th June 2022, following the lapse of that contract, together totalling Kshs. 1,416,470. It avers that no written complaint disputing these amounts was ever received from the Claimant. 26 The Respondent avers that the Claimant has failed to provide a clear and detailed breakdown of the components comprising the sum claimed, has not demonstrated the basis of her calculation, and has furnished no supporting documentation, and that no demands or written notices were in fact ever received from her. 27 It contends further that the Claimant, having been fully aware of and involved in implementing the organisationwide salary freeze until July 2021, filed the claim as a lastminute afterthought shortly before the limitation period lapsed, and is estopped from claiming entitlement given her prior involvement in, and the fair application across the organisation of, that decision. Page 7 of 25

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28 The Respondent maintains that it fully complied at all material times with the terms of the Claimant's employment contract, including its extension, that the gratuity due was paid strictly in accordance with the contract dated 1st January 2019 and the extended contract dated 12th January 2022, and that the Claimant has not pleaded or substantiated any specific instance of breach of contract. 29 It avers that no lawful entitlement remains unpaid, the payments made on 3rd March 2022 and 24th June 2022 reflecting full and final settlement of all contractual obligations. 30 On this basis, the Respondent submits that the Claimant's claims are baseless, without merit and unsupported by evidence or legal justification, and prays that the claim be dismissed in its entirety with costs. Evidence in Court 31 The Claimant (CW1) adopted her witness statement dated 7th May 2025, her Supplementary Statement dated 14 th May 2025, and her Further Statement dated 23 rd April 2025 as her evidence-in-chief, and produced her List and Further List of Documents dated 7 th May 2025 and 14th May 2025 respectively as her exhibits. Page 8 of 25

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32 She testified that she was employed by the Respondent on 1st June 1987, and that her terms were changed to a threeyear contract on 19th December 2018, the salary structure under which had been explained to her. 33 Upon cross-examination, CW1 confirmed that she was Chief Manager, Human Resources, and that payroll fell within her responsibilities. 34 She confirmed her Contract dated 1st January 2019 and acknowledged that Clause 4(b) dealt with salary increments, but maintained that the clause did not render increments optional and that the letter of appointment did not say increments were conditional on approval of efficiency. 35 She testified that at no time was she subjected to any appraisal indicating that she was not performing, that she served well, and that she was in fact later promoted to Director before exiting service. 36 CW1 confirmed that under Clause 13 of the Contract, gratuity was payable at 31% of total salary paid, and that she was paid Kshs. 1,226,864 as gratuity, computed on a salary that had not been increased. 37 She confirmed that her contract was extended for five months and that she was paid for that period. She testified that she wrote to the Managing Director on 3 rd February 2021 requesting her annual increment, and that her Page 9 of 25

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bundle of documents evidenced her complaints, including a letter to the Inspectorate of State Corporations which she conceded was unsigned, though she maintained a signed copy was on file. 38 CW1 further conceded that the payroll officer was not named in her statement, and that the demand notice, though sent to the Managing Director of TARDA, was not stamped as received and did not indicate the specific amount demanded. 39 CW1 testified that she was promoted from Chief Manager to Director in a reorganisation, that her salary became Kshs. 165,700 from July 2021, which she continued to receive, and that she had written to the Managing Director, who indicated the matter could be referred to the HR Advisory Committee. 40 She conceded that her claim of Kshs. 4,024,791 was not computed, and confirmed that a further Kshs. 189,606/ was paid to her on 4th June 2022, after her exit, being gratuity for the five-month extension, and that no other dues remained outstanding. Therefore, her claim being confined to the salary increments not paid for two years and the corresponding gratuity for that period. 41 In re-examination, CW1 stated that at the time of her retirement, the Respondent did not explain to her why her salary had not been increased as agreed. Page 10 of 25

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42 The Respondent’s witness, Gertrude Ngaruiya (RW1), testified on oath that she is the current Human Resource Manager of the Respondent. She adopted her statement dated 7th July 2025 as her evidence-in-chief, and produced the Respondent's List of Documents dated 22 nd April 2025 and Further List of Documents dated 7 th July 2025 as her exhibits. 43 She testified that the Claimant's contract, signed on 1 st January 2019, showed that increments were not automatic but based on certain factors, and that under Clause 13, gratuity was payable at 31% of salary earned. 44 She referred to a payment voucher at page 16 of the Respondent's documents evidencing payment of gratuity of Kshs. 1,226,864.30 to the Claimant, bank statements at page 17 confirming the payment, a further payment voucher at page 18 for Kshs. 189,606 paid in respect of the Claimant's second, five-month contract, and a bank statement at page 19 confirming that this sum was paid on 24th June 2022. She testified that, taken together with the Claimant's contract, there was no money owed to her. 45 Upon cross-examination, RW1 confirmed that it was an express term that the Claimant's salary could be increased based on Clause 4(b), relating to efficiency, conduct and diligence, but conceded that the Respondent never Page 11 of 25

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communicated to the Claimant that these conditions had not been met. 46 RW1 testified that, at paragraph 15(a) of her statement, she had stated that there was an organisation-wide salary freeze from July 2021, but conceded she had not produced evidence of this. 47 She further conceded that, at paragraph 4(a) of her Supplementary Statement, she stated that payment was disrupted due to Covid-19, a matter she accepted was not provided for in the contract, and that there was no communication to this effect; she nonetheless maintained that the Respondent had not breached its contractual obligations. 48 In re-examination, RW1 stated that the salary freeze was applied to all staff, and that increments started coming in from July 2021. Claimants’ Submissions 49 On whether the Respondent breached the contract of employment, the Claimant submitted that she had established the existence of a valid and binding contract expressly providing for progressive annual increments over three years, and that while the Respondent implemented the 2019 increment of Kshs. 152,060, it failed to implement the increments due for 2020 (Kshs. Page 12 of 25

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165,700) and 2021 (Kshs. 180,660). The Claimant computed that, had the Respondent complied, she would have earned Kshs. 1,988,400 for 2020 and Kshs. 2,167,920 for 2021, a combined contractual entitlement of Kshs. 4,156,320 for the two years. 50 It was submitted that parties to an employment contract are bound by its terms unless lawfully varied under section 10(5) of the Employment Act, and that since the Respondent neither demonstrated a lawful variation nor produced evidence of mutual agreement to suspend the increments, its omission was unilateral, unlawful and a clear breach of the Claimant's contractual rights. 51 On whether the COVID-19 pandemic justified the Respondent's failure, the Claimant submitted that while the Court could take judicial notice of the pandemic's economic impact, such circumstances do not absolve an employer of its contractual obligations absent lawful procedure. She relied on Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others [2014] eKLR, for the proposition that even in financial distress, employers must act within the law and the contract, and that unilateral variation of fundamental terms without consultation is unlawful. 52 It was argued that the Respondent had not shown that it consulted the Claimant, obtained her consent, or formally varied her contract, and that Page 13 of 25 an organization-wide

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decision could not override her individual contractual entitlements, rendering the pandemic defence untenable in law. 53 On entitlement to the salary differentials, the Claimant submitted that the Claimant had discharged her evidentiary burden by demonstrating both the agreed salary structure and the payments actually received, and that the Respondent had not rebutted this with any lawful justification, entitling her to the differentials claimed for 2020 and 2021. 54 On unfair labour practice, the Claimant submitted that the Respondent's arbitrary withholding of contractual increments, without consultation or lawful justification, amounted to unfair labour practice within Article 41 of the Constitution, which guarantees every worker the right to fair labour practices. Reliance was placed on Gatuma v Kenya Breweries [2024] KESC 52 (KLR), Ltd for & the 3 holding others that any unilateral change to terms of employment by an employer is a breach of contract and an unfair labour practice. 55 The Claimant further invoked section 10(5) of the Employment Act, 2007, requiring that revisions to a contract be made in consultation with the employee and through written notification, and section 13 of the Act, which she submitted lays down the guiding principles for variation namely, that the employer must issue prior Page 14 of 25

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notice, engage the employee in consultation, thereafter revise and again notify the employee in writing, and secure the employee's consent, whether inferred or express. 56 It was submitted that the Respondent failed to communicate transparently, failed to justify its conduct in law, and ignored her demands for payment, amounting to both a breach of contract and an affront to the constitutional guarantee of fair labour practices. 57 On whether the Respondent effectively challenged the quantum, the Claimant submitted that the Respondent did not substantively controvert the sum claimed, confining its challenge to the alleged absence of a detailed computation, and that its own witnesses conceded that the Claimant's salary had not been increased in accordance with the contract. 58 It is the Claimant’s submission that the Respondent placed no alternative computation before the Court and instead directed its evidence to gratuity payments, a matter not in dispute and distinct from the core grievance of unpaid increments. 59 Invoking section 107 of the Evidence Act, the Claimant submitted that a party disputing a monetary claim bears the burden not merely to deny it but to rebut it with cogent evidence, and that having admitted the failure to Page 15 of 25

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implement the increments while failing to demonstrate the correct financial position, the Respondent left her pleaded sum uncontroverted in substance. 60 On whether performance or an alleged salary freeze justified non-implementation, the Claimant addressed the Respondent's reliance on Clause 4(b) of the contract, which tied increments to performance, submitting that there was no evidence of any adverse performance appraisal or failure to meet the requisite threshold, and that her own uncontroverted evidence was that she discharged her duties diligently throughout her tenure. She argued that an employer relying on performance to withhold increments bears the obligation to formally evaluate, document and communicate any shortcoming, and that the absence of such an appraisal rendered reliance on Clause 4(b) an afterthought. 61 On the alleged organisation-wide freeze, she submitted that no circular, internal memo, variation letter or contractual amendment was produced to evidence the decision or its communication to staff, and that section 10(5) of the Employment Act requires any variation of fundamental terms such as remuneration to be expressly communicated and agreed. 62 The Claimant further submitted that the Respondent's contention that her seniority as Chief Manager, Human Resources & Administration imputed knowledge of the Page 16 of 25

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freeze was unpersuasive, since knowledge cannot be presumed absent proof of communication, particularly where the variation is adverse to the employee; the Respondent could not rely on her position to circumvent its obligation to formally notify and obtain her concurrence. 63 On gratuity, it was submitted that payment of gratuity, though undisputed, was ancillary and did not answer the core grievance, since that gratuity was itself computed on an understated salary and therefore did not extinguish her entitlement to the differential sums arising from the unimplemented increments. 64 It is the Claimant’s submission that she has demonstrated a contractual obligation on the Respondent to implement annual increments, an unjustified failure to do so, and quantifiable resultant financial loss. Respondent’s Submissions 65 On whether the Claimant is entitled to salary increments for 2020 and 2021, the Respondent submitted that the salary progression schedule in the letter of appointment dated 28th December 2018 cannot be read in isolation but must be read together with Clause 4(b) of the Schedule to the Local Agreement dated 1st January 2019, which it quoted as providing that "Increments of salary, if any, will be reckoned as from the incremental date specified in Page 17 of 25

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Clause 4(a) above, but no increment will be granted unless the efficiency, conduct and diligence of the person engaged during the year immediately preceding have been approved." 66 It is the Respondent’s submission that this provision demonstrates increments were neither automatic nor guaranteed, but expressly conditional upon approval of the employee's efficiency, conduct and diligence in the preceding year, and that the Claimant herself conceded at trial that approval was required and that no performance appraisal or approval for 2020 or 2021 had been produced. 67 Relying on section 107 of the Evidence Act and on Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR cited for the holding that "the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue." 68 It was submitted that the Claimant, asserting an unconditional entitlement, bore the burden of proving that the clause created an unconditional right, that its conditions were satisfied, and that the increments were approved, and that she had proved none of these. 69 On whether the Claimant proved the sum of Kshs. 4,024,791, the Respondent submitted that the sum was neither proved nor capable of being awarded, the Page 18 of 25

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Claimant having produced no computation and having conceded in cross-examination that her demand letter of 14th May 2025 contained neither a specific sum nor proof of receipt by the Respondent. 70 In support thereof, it relied Stephen K Kachila v Bamburi Cement Limited [2015] eKLR, where a claim for salary increment was rejected as untenable for want of a demonstrated basis of computation or performance evidence justifying entitlement. 71 It was submitted that a claim for a specific monetary sum requires proof of that sum, not a theoretical projection, and that the burden under section 107 of the Evidence Act remained undischarged. 72 On whether the Claimant received all payments due to her, the Respondent submitted the most senior human resource officer responsible for staff remuneration, the Claimant was aware that the Authority suspended increments organization-wide until July 2021 owing to operational and financial disruption, a measure applied uniformly to all staff and not directed at her, as testified by the RW1, whose evidence on the Claimant's awareness and direct involvement was not materially challenged. 73 It is the Respondent’s submission that the Claimant’s basic pay was adjusted to Kshs. 165,700 in July 2021 and Kshs. 180,660 in January 2022 following her contract extension, and that her gratuity was correctly computed Page 19 of 25

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at 31% of her total basic salary paid, in compliance with Clause 13 of the Local Agreement, comprising Kshs. 1,226,864 paid on 3rd March 2022 and Kshs. 189,606 paid on 24th June 2022, totalling Kshs. 1,416,470, sums she accepted without complaint or protest at the time, leaving no basis for any adjustment to the gratuity computation. 74 On whether the Respondent breached the contract or the Employment Act, the Respondent submitted that no breach was established. First, it was argued that Clause 4(b) created a conditional, not a fixed or vested, right, such that the non-exercise of a conditional power is the application of the contract as agreed, not a variation of it, and that the Claimant's reliance on sections 10(5) and 13 of the Employment Act to characterize this as an unlawful unilateral variation misconceived the nature of the obligation. 75 It is the Respondent’s submission that the Claimant's own institutional role estopped her from now challenging the increment decision: as Chief Manager, Human Resources and Administration, she was the officer responsible for administering remuneration policy, she personally signed the Local Agreement containing Clause 4(b), and the Respondent's witness evidence established that she was directly involved in implementing the organization-wide freeze, applying it to all other staff before she could challenge its application to herself. Page 20 of 25

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76 The Respondent relied on the principle that a party who by their conduct represents acceptance of a state of affairs, upon which another party relies, cannot later adopt an inconsistent position, citing Abdulkarim v Horizon Contact Centres Limited [2024] KEELRC 1508 (KLR), in which the court declined to award salary arrears to a Finance Manager who had herself designed and implemented a Covid-19 salary reduction framework, holding that reductions developed and implemented through consultation, including with the claimant, could not ground a claim for arrears. 77 The Respondent submitted that fair labour practice includes compliance with lawfully agreed conditional terms, and that a uniformly applied deferral of a conditional and discretionary increment during genuine financial constraint, absent targeting, discrimination or bad faith, does not constitute unfair labour practice, particularly as the Claimant's salary was restored at the earliest practicable opportunity. 78 The Respondent submitted that the Claimant’s counternarrative did not withstand scrutiny: the alleged letter of 27th January 2023 to the Inspectorate of State Corporations was unsigned and unacknowledged, a position reinforced by the Respondent's Supplementary Witness Statement denying any record of such correspondence; and her further allegations, in her Further Supplementary Witness Statement, that the increment Page 21 of 25

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decision was made verbally by the Managing Director, that she was bypassed, and that funds were diverted to operational expenses, were unsupported by any Human Resource Committee minutes, Board papers, payroll directives or other documentary evidence, a want of documentation notable given that she was herself the officer responsible for such records, and her silence for over two years after leaving service before filing the claim was said to weaken the credibility of her narrative. 79 On whether the Claimant is entitled to the relief sought, the Respondent submitted that she is not, reiterating that: Clause 4(b) was conditional and no unconditional entitlement to the 2020 and 2021 increments arose; no performance appraisals, approvals or documentary evidence of satisfaction of Clause 4(b) were produced; the claimed sum of Kshs. 4,024,791 was neither particularised nor supported by any computation; her basic pay was in fact adjusted upward in July 2021 and January 2022; the gratuity sums of Kshs. 1,226,864 and Kshs. 189,606 were correctly computed and paid, and accepted without objection; and, as signatory to the Local Agreement, she is estopped from the position she now advances, such that no breach of contract or of the Employment Act, 2007 has been made out. 80 On costs, the Respondent submitted that, should the claim be dismissed, costs should follow the event under section 12(4) of the Employment and Labour Relations Court Act, Page 22 of 25

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CAP 8E, arguing that it had been put to the time and expense of defending a claim resting on a misreading of a conditional contractual clause, unsupported allegations of verbal directives and fund diversion, and an unparticularized monetary claim. 81 I have examined all the evidence and submissions of the parties herein. From the evidence adduced by the claimant, it is evident that she was an employee of the respondent and served on a 3 year contract at the tail end of her employment. The employment letter dated 28/12/2018 stated as follows: Tana and Athi Rivers Development Authority Queensway House, 7th Floor, Kaunda Street P.O Box 47309-00100 GPO Nairobi, Kenya Tel: 254-0203341782/4/7/8 Fax: 254-020-2248254 Email: Info@tarda.co.ke 28th December, 2018 Damarys Kiarie TARDA Staff NAIROBI. LETTER OF APPOINTMENT You have been appointed on contract terms as Chief Manager Human Resources & Administration with effect from 1st January 2019. The salary is Kshs. 152,060 x 165,700 x 180,660. You will enter the scale at Kshs. 152,060/= per month. Housing allowance will be payable to you at the rate currently applicable to the Authority. Page 23 of 25

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The Contract will be 3 years renewable based on performance. You will be paid 31% service gratuity at the expiry of the contract. Due to the added responsibility you will be responsibility allowance of Kshs. 35,775/- per month. paid a You will be entitled to thirty (30) leave days per year. All other terms remain. Yours faithfully, Steven G. Ruimuku MANAGING DIRECTOR 82 From this letter, the salary of the claimant was to progress from kshs 152,060 to 165,700/- to 180,660/-. From the pay slips produced by the claimant, the envisaged salary progression was not effected and the claimant was paid kshs 152,060 to June 2021. The salary increment should have been kshs 152,060/- up to the increment date of 1/1/2020. The entire 2020 the claimant was therefore underpaid by 165,700 – 152,600= 13,100x12= kshs 157,200/-. 83 From January 2021, the salary was to progress to kshs 180,660. In January, 2021 to 2021 June she was paid 157,200/- was thus underpaid by 180,660-157,200- 23,460x6= 140,760/. Starting July 2021, she was now paid 165,700/- all the way to her retirement on May 2022 which is for a period of 11 months = 23,460x11months= 258,060/- Total underpayment under the 3 year contract period totals kshs 157,200+140,760+258,060=556,020/-. Page 24 of 25

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84 The gratuity the claimant was to be paid was 31% of her salary. This translates to 31/100x556,020= 172,366.3/-. Total not paid therefore amounts to kshs 728,386.2 which I find for claimant and enter judgment for her less statutory deductions. 85 The respondent will also pay costs of this suit plus interest at court rates with effect from the date of this judgment. Dated, Signed and Delivered virtually at Nairobi this 30th Day of September 2026. HELLEN WASILWA JUDGE Page 25 of 25

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