[2024] KEELRC 2718 (KLR)
The court held that since the CBA did not define 'salary' and did not expressly provide for the use of gross salary in the computation of terminal dues, the parties must have intended for basic salary to apply. The court found that nothing prevented the parties from specifying gross salary if that was their...
Source-derived case information.
- Citation
- [2024] KEELRC 2718 (KLR)
- Parties
- Applicant: Winfred Karimi; Respondent: Katheri Farmers Co-operative Society Limited
- Court
- Employment and Labour Relations Court
- Court Station
- Employment and Labour Relations Court at Meru
- Jurisdiction
- Kenya
- Case Number
- Cause E022 of 2023
- Procedural Posture
- Cause / Post Judgment Ruling on Computation of Terminal Dues
- Outcome
- Respondent's computation of terminal dues upheld; claimant's objection dismissed.
- Judges
- ON Makau
- Legal Topics
- Constructive Dismissal, Terminal Dues, Collective Bargaining Agreement, Salary Computation
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Winfred Karimi
Applicant
Katheri Farmers Co-operative Society Limited
Respondent
Procedural Posture
Cause / Post Judgment Ruling on Computation of Terminal Dues
Legal Issues
- 1 Whether terminal dues under the CBA should be computed using basic salary or gross salary.
- 2 Whether the respondent's computation of terminal dues is correct under the CBA.
Ratio Decidendi
The court held that since the CBA did not define 'salary' and did not expressly provide for the use of gross salary in the computation of terminal dues, the parties must have intended for basic salary to apply. The court found that nothing prevented the parties from specifying gross salary if that was their intention. The court relied on the definition of gross salary from the Postal Corporation of Kenya vs. Andrew K. Tanui case, which clarified that gross salary includes allowances only if expressly stated or if the nature of the allowances so requires. In this case, the CBA was silent on allowances, and therefore, the respondent's computation based on basic salary was upheld as correct....
Court Disposition
Respondent's computation of terminal dues upheld; claimant's objection dismissed.
Orders
- Declaration that the respondent has constructively dismissed the claimant.
- Award of Kshs. 270,100.00 for the unlawful dismissal.
Full Case Text
Judgment text and source record
22 paragraphs
Karimi v Katheri Farmers Co-operative Society Limited (Cause E022 of 2023) [2024] KEELRC 2718 (KLR) (5 November 2024) (Ruling)
Neutral citation: [2024] KEELRC 2718 (KLR)
Republic of Kenya
In the Employment and Labour Relations Court at Meru
Cause E022 of 2023
ON Makau, J
November 5, 2024
Between
Winfred Karimi
Claimant
and
Katheri Farmers Co-operative Society Limited
Respondent
Ruling
1. On 12th September 2024, I delivered judgment in this matter in which I made the following orders: -a.Declaration that the respondent has constructively dismissed the claimant.b.Award of Kshs.270,100. 00 for the unlawful dismissal.c.Terminal dues under clause 18 of the CBA.d.Costs and interest at court rates from the date of this judgment.e.The award is subject to statutory deductions.
2. I further directed the respondent to compute the said terminal dues payable to the claimant as per Clause 18 of the CBA and file in court within 30 days of the judgment for adoption as part of the judgment. The respondent computed the same vide its Advocates’ letter 30th October, 2024, thus pension of Kshs. 359,568 plus 60 days salary for every year completed in service being Kshs. 920,208 totalling to Kshs. 1,279,776. The said computation was based on the basic monthly salary.
3. The claimant agreed with the computation of the pension but disputed the use of basic salary for computation of the additional two months salary under clause 19 of the CBA. He contended that the gross salary of Kshs 27,010 should be used in the computation which equals to Kshs. 1,296,480 plus pension of Kshs. 359,568 totalling to Kshs.1,656,048.
4. Clause 18 of the CBA provides for what is to be paid to a graded employee whose employment is terminated by the respondent, thus:“(ii)Graded staff will be paid their full retirement benefits if one has completed serving the Co-operative society for more than 10 years and has attained the age of 40 years.”
5. The retirement benefits are provided in Clause 19 of the CBA as follows:“… graded staff will be paid retirement benefits as followsi.Provident fund plusii.60 days salary for every year completed in service.”
6. Salary has not been defined in the CBA, but I believe that the parties intended it to mean basic salary otherwise, nothing prevented them from expressly using the gross salary if they intended to include allowances. In the case of Postal Corporation of Kenya vs. Andrew K. Tanui [2019] eKLR the Court of Appeal defined gross salary as follows: -“Gross salary would then be the amount calculated by adding up one's basic salary and allowances, before deduction of taxes and other deductions. Each case must be examined to identify the nature of the allowances given and whether they form part of the gross salary.”
7. In view of the matters stated above, I agree with the computation by the respondent of Kshs 1,279,776. Consequently, the final orders in the judgment are as follows: -a.Declaration that the respondent has constructively dismissed the claimant.b.Award of Kshs.270,100. 00 for the unlawful dismissal.c.Terminal dues under clause 18 of the CBA assessed at Kshs.1,279,776. d.Costs and interest at court rates from the date of the judgment.e.The award is subject to statutory deductions.
DATED, SIGNED AND DELIVERED AT MERU THIS 5TH DAY OF NOVEMBER, 2024. ONESMUS N MAKAUJUDGEOrderThis ruling has been delivered to the parties via Teams video conferencing with their consent.ONESMUS N MAKAUJUDGE