https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/2181

 **REPUBLIC OF KENYA** **IN THE EMPLOYMENT *&* LABOUR RELATIONS** **COURT OF KENYA AT KISUMU** **CAUSE NO. E072 OF 2024** TOBIAS ODUNDO a.k.a ODUNDO TOBIAS SAMSON.....................................................**CLAIMANT** **VERSUS** COUNTY GOVERNEMNT OF HOMABAY.…………...…**RESPONDENT** **JUDGMENT** 1. The Claimant instituted this suit via a Memorandum of Claim dated 10th July 2024, seeking the following reliefs: 2. An order directing the Respondent to pay the Claimant Kshs. 3,218,040/- as service gratuity for the period worked; 3. costs and interests of the suit; and 4. Any other relief the court may deem fit to grant. 5. The Claimant's case is that he was appointed as a member of the Homa Bay County Public Service Board for a non-renewable six-year term commencing on 15th February 2017. He avers that he served diligently until the expiry of his contract, whereupon the Respondent's Human Resource Department computed his service gratuity at Kshs. 3,218,040/- vide a letter dated 2nd February 2023. Despite the computation and subsequent demands for payment, the Respondent has allegedly failed to settle the gratuity. 6. The Respondent opposed the claim through a Response to Memorandum of Claim and Counterclaim dated 9th June 2025. While admitting the Claimant's appointment, it disputes that he served the full contractual term. It avers that following the adoption of a report by the County Assembly on 26th November 2019 recommending the Claimant's removal, his employment was terminated on the same date. According to the Respondent, the Claimant subsequently obtained conservatory orders quashing his removal but later voluntarily resigned on 8th February 2022 before the expiry of his term. It contends that the resignation constituted a breach of contract, thereby discharging the parties from their contractual obligations, including any entitlement to gratuity. 7. In its counterclaim, the Respondent avers that the Claimant obtained a car loan of Kshs. 3,234,364/- on 16th March 2017, repayable in monthly instalments of Kshs. 53,907/-. It contends that upon the Claimant's resignation on 8th February 2022, the loan had not been fully serviced, leaving an outstanding balance of Kshs. 1,131,991/-. Consequently, the Respondent seeks judgment against the Claimant for Kshs. 1,131,991/- together with accrued interest of Kshs. 679,194.60/- 8. In reply, the Claimant filed a Response to Counterclaim dated 4th July 2025 reiterating the averments contained in the Memorandum of Claim. He denies defaulting in repayment of the loan or owing the Respondent Kshs. 1,131,991/- and puts the Respondent to strict proof thereof. He accordingly prays for the dismissal of the counterclaim with costs and for judgment to be entered in his favour as prayed in the Memorandum of Claim. 9. At the close of hearing parties filed written submissions. Claimant’s Submissions 1. In support of the claim the Claimant identifies the following issues for determination: * + 1. Whether the Claimant was entitled to Kshs. 3,218,040/- being accrued service gratuity; 2. Whether the Respondent's Gratuity Computation dated 2nd February 2023 (CEXT 3) constituted an admission of a liquidated debt; and 3. Whether the Respondent's counterclaim for Kshs. 1,131,991/- being an alleged outstanding car loan balance was merited. 2. On entitlement to gratuity, the Claimant submits that the computation dated 2nd February 2023 produced as (CEXT 3), which assessed his gratuity at Kshs. 3,218,040/-, amounted to an unequivocal admission of liability and created an "account stated", thereby establishing a debtor-creditor relationship. Reliance is placed on **Choitram *v* Nazari [1984] KLR 327**, where the Court of Appeal held that where a party has admitted a debt, the court should readily enter judgment on the admitted amount. The Claimant further submits that the Respondent was estopped from denying the authenticity or legal effect of CEXT 3 after its own witness, RW1, admitted during cross-examination that the document bore the Respondent's official logo and stamp, emanated from its internal systems, and had been prepared by one Bob Collins, the Respondent's employee. He submits that those admissions rendered the Respondent bound by CEXT 3. In support of this proposition, the Claimant relies on **Titus Muiruri Doge *v* Kenya Canners Limited [1988] KEHC 46 (KLR)**, to argue that an employer cannot resile from representations made through its authorised officers where an employee has relied on them. The Claimant maintains that the mode of transmission of CEXT 3 through WhatsApp did not diminish its evidential value, particularly in light of RW1's admission that it was an official document. It relies on section 17 of the Evidence Act. The Respondent further asserts that notwithstanding his resignation, before expiry of his contract, once the Respondent computed his gratuity it became a liquidated debt. 3. On the counterclaim, the Claimant submits that the loan had been fully repaid through the check off system. In support he cites the Deduction Catalogue/Gross Pay Listings (CEXT 7) and the fact that the Respondent had deliberately omitted payroll records covering the period between June 2020 and his resignation in February 2022, despite being the custodian of records. He also highlights the clearance form (CEXT 5), which had been signed by the departmental accountant and the County Director of Finance, as evidence that he had no outstanding financial obligations upon leaving employment. In conclusion, he urges the Court to dismiss the counterclaim with costs and enter judgment in his favour for Kshs. 3,218,040/- together with interest and costs. Respondent’s Submissions 1. The Respondent submits that the Claimant is not entitled to gratuity because he breached his contract by resigning. Additionally, it contends that his appointment letter did not provide for payment of gratuity. The Respondent maintains that gratuity is not an automatic entitlement but is only payable where it is expressly provided for by statute, the contract of employment, a collective bargaining agreement, or an employer's policy. In support of its position, reliance is placed on **Alfred Mumpasoi Keriolale *v* Narok County Government *&* another [2021] KEELRC 1495 (KLR)**, where the court held that payment of gratuity is conditional upon completion of the contractual term and that an employee who voluntarily resigns before expiry forfeits such entitlement. It also cites the same case for the proposition that gratuity must be expressly provided for in the letter of appointment. 2. On the computation dated 2nd February 2023, the Respondent submits that it is inadmissible because it is based on a screenshot of the alleged letter. It therefore asserts that the screenshot does not comply with sections 64 and 106B of the Evidence Act governing the production of electronic evidence. The Respondent further submits that the letter does not contain the computation explaining the gratuity figure stated therein and therefore lacks evidential value. Consequently, it urges the Court to expunge the document from the record. 3. Regarding the counterclaim, the Respondent submits that it has been proven given that the Claimant resigned on 8th February 2022 before fully servicing the loan. It maintains that the loan application expressly authorised it to recover any outstanding balance and accrued interest from the Claimant's terminal dues. Consequently, it urges the court to award Kshs. 1,811,185.60/- being the outstanding loan together with accrued interest. Accordingly, the Respondent urges the Court to dismiss the Memorandum of Claim with costs and allow its counterclaim. Disposition 1. The Claimant resigned from the Respondent. He as a consequence claims gratuity. The gratuity due in his view is Kshs. 3,218,040/- for the period worked. The Respondent on its part calculated the gratuity due. The computation is dated 2nd February 2023 and was produced by the Claimant as CEXT 3. The Respondent assessed his gratuity at Kshs. 3,218,040/- which is a clear admission the Claimant was due for payment of gratuity. The gratuity calculation was prepared by one Bob Collins, an employee of the Respondent. This is clearly a tacit admission gratuity is due. The evidence before me shows the Claimant cleared the car loan facility through the check-off system and the Respondent is therefore misplaced on the counterclaim for the alleged unpaid car loan. 2. In my considered view, the Respondent was pushing the boundaries to see just how much it can get away with. Resignation is one of the lawful means of terminating a contract. Had the Claimant absconded work or been dismissed for gross misconduct, he would have been hard pressed to show his *bona fides* as far as his claim goes. The Claimant in this case resigned, properly severed the contract of employment. It is recalled the adoption of a report by the County Assembly on 26th November 2019 recommending the Claimant's removal, the Claimant's employment was terminated on the same date. It is on record that the Claimant subsequently obtained conservatory orders quashing his removal but later voluntarily resigned on 8th February 2022 before the expiry of his term. This is permitted conduct and therefore there was no basis for the Respondent to deny the Claimant his gratuity. 3. In the final analysis the Claimant is entitled to relief as below:- 1. Gratuity – Kshs. 3,218,040/- 2. Interest at court rates on the sum in (a) above from the date of judgment till payment in full. 3. Costs and of the suit. It is so ordered. **Dated and delivered at Kisii this 28th day of July 2026** **Nzioki wa Makau, MCIArb.** **JUDGE**