[2013] KEELRC 962 (KLR)
The court held that only claimants Nos. 1, 2, 5, and 6, whose monthly earnings exceeded the statutory threshold, were liable to income tax deductions from the judgment sum. The respondent was therefore entitled to deduct and remit income tax only from the amounts payable to those specific claimants. The rest of the...
Source-derived case information.
- Citation
- [2013] KEELRC 962 (KLR)
- Parties
- Applicant: David Kimani and 9 Others; Respondent: Geothermal Development Company Limited
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nakuru
- Jurisdiction
- Kenya
- Case Number
- Cause 8 of 2012
- Procedural Posture
- Miscellaneous Application / Post Judgment Application for Stay and Clarification of Execution
- Outcome
- Application partially allowed with clarification on tax deductions and stay of execution granted.
- Judges
- B Ongaya
- Legal Topics
- Income Tax Deductions, Execution of Judgments, Employment Remuneration, Stay of Execution
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
David Kimani and 9 Others
Applicant
Geothermal Development Company Limited
Respondent
Procedural Posture
Miscellaneous Application / Post Judgment Application for Stay and Clarification of Execution
Legal Issues
- 1 Whether the respondent was entitled to deduct income tax from the judgment sum payable to the claimants.
- 2 Whether the claimants are entitled to execute for the full judgment sum or only the net amount after lawful tax deductions.
- 3 Whether a stay of execution should be granted pending compliance with the court's clarification on tax deductions.
Ratio Decidendi
The court held that only claimants Nos. 1, 2, 5, and 6, whose monthly earnings exceeded the statutory threshold, were liable to income tax deductions from the judgment sum. The respondent was therefore entitled to deduct and remit income tax only from the amounts payable to those specific claimants. The rest of the claimants were not subject to such deductions. The court clarified that the respondent must pay the claimants the sum of Kshs.681,836.58 less income tax due from claimants Nos. 1, 2, 5, and 6, by 15th January 2014, failing which execution would proceed. A stay of execution was granted until that date to allow compliance. The respondent was also ordered to pay the costs of the...
Court Disposition
Application partially allowed with clarification on tax deductions and stay of execution granted.
Orders
- The respondent to pay the claimants Kshs.681,836.58 less income tax due from claimants Nos. 1, 2, 5, and 6 by 15.1.2014, failing which execution for the due pay to continue.
- There be stay of execution until 15.1.2014.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA
IN THE INDUSTRIAL COURT OF KENYA AT NAKURU
CAUSE NO. 8 OF 2012
DAVID KIMANI AND 9 OTHERS..................................CLAIMANT
-VERSUS-
GEOTHERMAL DEVELOPMENT COMPANY LIMITED.................................................................RESPONDENT
(Before Hon. Justice Byram Ongaya on Friday 20th December, 2013)
RULING
The court delivered the judgment in this case on 7. 06. 2013. The applicant Geothermal Development Company Limited filed a notice of motion on 2. 12. 2013 brought under Rules 16 (1) (3) (4), 31(2) and 36 of the Industrial Court (Procedure) Rules 2010, Order 22 Rule 22 of the Civil Procedure Rules and sections 1A, 1B and 3A of the Civil Procedure Act and all other enabling provisions of Laws of Kenya. The substantive prayer was that the court be pleased to issue permanent orders barring the respondents, their servants and or agents from attaching the applicant’s property.
The application was supported by the affidavit of Thomas Mburu attached on the application and the stated supporting grounds included:
The respondent has paid all outstanding claimants’ dues as ordered in the judgment.
The payment was less tax which has been remitted to the Kenya Revenue Authority and being Kshs.681,836. 58 being income tax and VAT.
The claimants have appointed Tango Auctioneers and General Merchants to execute for the sum deducted and remitted for tax and proclamation has issued.
It is not disputed that the claimants had been paid by the respondent in satisfaction of the judgment but without explanation of the deductions made from the judgment dues. The applicant has submitted that the deductions were for income tax with respect to the payments to each of the claimants.
The claimants’ have submitted that claimants Nos. 1, 2, 5, and 6 who earned Kshs.720. 00 per day being Kshs.20,160. 00 per month were liable to pay income tax in view of the provisions of section 49(2) of the Employment Act, 2007. It was further submitted that the rest of the claimants were not liable to pay taxes. The respondent did not object to that submission as respondent’s counsel conceded and the court finds for the claimants in that regard.
The court has considered the submissions and finds that the claimants are entitled to be paid Kshs.681,836. 58less income tax due from claimants Nos. 1, 2, 5, and 6.
In conclusion, the court makes the following orders:
The respondent to pay the claimants Kshs.681,836. 58less income tax due from claimants Nos. 1, 2, 5, and 6 by 15. 1.2014 failing, execution for the due pay to continue.
There be stay of execution until 15. 1.2014.
The respondent to pay costs of this application fixed at Kshs.5,000. 00.
Signed, datedanddeliveredin court atNakuruthisFriday, 20th December, 2013.
BYRAM ONGAYA
JUDGE