[2013] KEELRC 543 (KLR)
The court found that the claimant left employment consensually and received a gratuity payment calculated at 15 days' basic salary for each completed year of service. There was no contractual or statutory requirement for the respondent to use gross salary, 16 days per year, or 26 days per month in the computation....
Source-derived case information.
- Citation
- [2013] KEELRC 543 (KLR)
- Parties
- Claimant: Gabriel Ngugi Ndumbu; Respondent: Gaichanjiru Catholic Hospital
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Nairobi
- Jurisdiction
- Kenya
- Case Number
- Cause 988 of 2011
- Procedural Posture
- Employment Claim / Final Judgment
- Outcome
- Claim and counterclaim rejected.
- Legal Topics
- Gratuity Entitlement, Nssf Membership, Service Pay Computation, Consensual Termination
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Gabriel Ngugi Ndumbu
Claimant
Gaichanjiru Catholic Hospital
Respondent
Procedural Posture
Employment Claim / Final Judgment
Legal Issues
- 1 Whether the claimant was entitled to additional gratuity/service pay beyond what was paid by the respondent.
- 2 Whether the respondent was entitled to recover the amount already paid as gratuity to the claimant under the counterclaim.
- 3 Whether the computation of gratuity should have been based on gross salary, 16 days per year, or 26 days per month.
Ratio Decidendi
The court found that the claimant left employment consensually and received a gratuity payment calculated at 15 days' basic salary for each completed year of service. There was no contractual or statutory requirement for the respondent to use gross salary, 16 days per year, or 26 days per month in the computation. The payment was in addition to NSSF benefits, and the consensual agreement between the parties was not shown to fall below minimum employment standards. The court held that neither party could renege on the terms of the consensual disengagement, and there was no basis for judicial intervention. Both the claim and counterclaim were rejected.
Court Disposition
Claim and counterclaim rejected.
Orders
- The claim is rejected.
- The counterclaim is rejected.
Full Case Text
Judgment text and source record
27 paragraphs
REPUBLIC OF KENYA
IN THE INDUSTRIAL COURT AT NAIROBI
CAUSE NUMBER 988 OF 2011
BETWEEN
GABRIEL NGUGI NDUMBU ………………………………………………………………………………………. CLAIMANT
VERSUS
GAICHANJIRU CATHOLIC HOSPITAL ……………………………………………………………………. RESPONDENT
Rika J
CC. Elizabeth Anyango
Mr. Nyabena instructed by Nyabena Nyakundi & Company Advocates for the Claimant
Mr. Njoroge instructed by Kibatia & Company Advocates for the Respondent
ISSUE IN DISPUTE: GRATUITY/ SERVICE PAY
DATE CLAIM WAS FILED: 22ND JUNE 2011
DATE PROCEEDINGS CLOSED: 18TH FEBRUARY 2013
DATE OF DETERMINATION: 12th July 2013
AWARD
1. The Claimant was employed by the Respondent as Assistant Maintenance and Driver on 1st April 1994, at a basic salary of Kshs. 3,407. His contract was terminated by the Respondent on 30th October 2010. The Claimant has no issue with the manner of termination. His Claim is that he was not paid the correct service/gratuity pay. He was paid Kshs. 48,020 instead of Kshs. 78,196. He claims the difference of Kshs. 30,896. Parties agreed to have the issue determined on the strength of submissions, which the Parties have placed on the record.
2. The Claimant explains that the shortfall arose because the Respondent adopted the basic salary, rather than the gross salary paid monthly to the Claimant, as the base rate. Secondly, computation was based on 15 days’ salary for each completed year of service, rather than 16 days’ salary. Thirdly, the amount paid to the Claimant was based on 30 working days, instead of the normal limit of 26 days a month.
3. The Respondent answers that any service/ gratuity paid to the Claimant, was made in error. The Claimant was subscribed to the National Social Security Fund [N.S.S.F]. He was not eligible to be paid service/ gratuity by virtue of Section 35 [6] [d] of the Employment Act 2007 which exempts employees under the N.S.S.F, from receiving service/ gratuity pay. The Respondent counterclaims the amount of Kshs. 48,020 paid to the Claimant as service/gratuity.
4. In responding to the counterclaim, the Claimant states that the Respondent aims at intimidating the Claimant from pursuing his rightful balance of terminal dues. The Respondent offered the Claimant gratuity, and cannot be allowed now, to renege, and make demands on the Claimant.
The Court Finds and Awards-:
5. The Claimant appears to have left employment consensually, after working for 14 years as Artisan Maintenance. The Respondent offered to pay him, and he received gratuity payment of Kshs. 48,020. This consensual exit package was calculated at 15 days’ salary for every year completed in employment, based on the last basic salary earned by the Claimant. There is nothing shown in the contract or the law to which the Parties were subject, that required the Respondent to pay to the Claimant 16 days’ salary for every completed year of service. There is similarly nothing in law that compels Parties to a consensual disengagement, to adopt the gross salary rather than the basic salary, in crafting the terms of disengagement. The Court does also not see any prejudice suffered by the Claimant in the adoption of 30 days instead of 26 days, in calculating the service/ gratuity. This payment was made in addition to the pension benefit accruing under the N.S.S.F.The Respondent argues, and this is technically correct, that the Claimant would not ordinarily have been entitled to service/gratuity under Section 35 of the Employment Act 2007. However, this was a consensual termination, in which Parties gave concessions, and limited their rights and obligations, as they deemed suitable to amicable separation. They cannot come later to this Court, and unsettle the consent dated 1st November 2010, which is titled ‘clearance certificate.’ This is not a case where it is suggested that termination was anything but consensual. Unless it was to be shown to this Court that what was agreed was loudly below the minimum employment standards, the Court has no reason to intervene. Parties should therefore let the matter rest, and move on with their respective lives. It is hereby ordered-:
[a] The Claim and the Counterclaim are rejected.
[b] Parties to meet their respective costs.
Dated and delivered at Nairobi this 12th day of July 2013
James Rika
Judge