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ELRCAllowedCause No. 112 of 2003· [2006] KEELRC 10 (KLR)

KENYA UNION OF DOMESTIC, HOTELS, EDUCATIONAL INSTITUTIONS, HOSPITALS & ALLIED WORKERS v SIXEIGHTY HOTEL (OWNED BY SENTRIM KENYA LIMITED) [2006] KEELRC 10 (KLR)

Industrial Court of Kenya
14 September 2006
CCCharles P. ChemmuttutJKJ.M. KilonzoAYA.M. Yarrow
340 words in judgment
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The bottom line

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Kenya's Industrial Court ordered Sixeighty Hotel to pay employees Kshs 1.48 million in audited service charge underpayments, with 12% interest, even to former staff.

What this practically means

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Executive summary

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This first-instance award of the Industrial Court of Kenya at Nairobi arose from a Notification of Dispute dated 16th October 2003, lodged with the statutory certificate of the Labour Commissioner under Section 14(7) and (9)(e) of the Trade Disputes Act, Cap. 234. The issue in dispute was the Hotel management's refusal to pay audited service charge underpayments totalling Kshs. 1,477,939.00 for the period 1985 to 1993. The Union was represented by Mr. S.N. Mwari and the Hotel by Mr. Raphael Warui of Warui & Co., Advocates. The Court expressly took exception to the findings and recommendation of the Minister for Labour and, weighing all the circumstances of the dispute, found the Hotel liable. It awarded the full sum of Kshs. 1,477,939.00 plus interest at 12% per annum, without any deductions, payable to all employees - including those who had since left employment, or their next of kin - for the relevant period. Payment directions were structured: current employees to be paid in six equal instalments beginning at the end of October 2006 and at three-monthly intervals thereafter, while former employees or their next of kin were to be paid their shares in lump sums. The award was dated and delivered at Nairobi on 14th September 2006 by Charles P. Chemmuttut, Judge, with Members J.M. Kilonzo and A.M. Yarrow (the signature page shows O.A. Wafula as Member). No costs order appears on the face of the judgment.

Key legal issues

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01

Employer's liability for audited service charge underpayment

Holding

The Hotel was held liable to pay the full audited underpayment of Kshs. 1,477,939.00 plus 12% per annum interest, covering the period 1985 to 1993, without deductions, to current employees, former employees or their next of kin.

Reasoning

The Court considered the Notification of Dispute and the statutory certificate from the Labour Commissioner under the Trade Disputes Act. Taking all the circumstances of the dispute into account, it took exception to the Minister for Labour's findings and recommendation, and instead found the Hotel liable for the full audited amount, structuring payment in instalments for current employees and lump sums for those who had left.

p. 1

Legal principles established

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  • An employer is liable for audited service charge underpayments and must pay them in full with interest, including to former employees or their next of kin.

Court orders

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  1. 1.The Hotel to pay Kshs. 1,477,939.00 together with 12% per annum interest thereon, without any deductions whatsoever, to all its employees, including those who have since left their employment or their next of kin, for the period 1985 to 1993
  2. 2.Employees still in employment to be paid in six equal instalments, the first at the end of October 2006 and thereafter at intervals of every three months until payment in full
  3. 3.Employees who have since left the Hotel's employment, or their next of kin, to be paid their shares in a lump sum
Jurisdiction invoked
Trade Disputes Act, Cap. 234, Section 14(7) and (9)(e) - dispute referred under a Notification of Dispute (Form 'A') with statutory certificate from the Labour Commissioner

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "KENYA UNION OF DOMESTIC, HOTELS, EDUCATIONAL INSTITUTIONS, HOSPITALS & ALLIED WORKERS v SIXEIGHTY HOTEL (OWNED BY SENTRIM KENYA LIMITED) [2006] KEELRC 10 (KLR)", Case Analysis (2006). Cause No. 112 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2006/10/eng@2006-09-14

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.