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ELRCPartially AllowedMemorandum of Claim dated 5th March 2012· [2015] KEELRC 50 (KLR)

Prisca Nyamwaya v Mp Shah Hospital [2015] KEELRC 50 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
18 December 2015
1,515 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan hospital was ordered to pay a resigned doctor her terminal dues and costs because withholding even disputed amounts, pending resolution, is unlawful.

What this practically means

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Executive summary

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The Claimant, a doctor employed by the Respondent hospital for eight years, resigned on 16th March 2011 giving three months' notice. The Respondent accepted the resignation but curtailed the notice, offering two months' salary in lieu, with the last working day fixed as 14th April 2011. The Claimant handed over the doctor's flat and her job identification card on 16th April 2011, but the Respondent withheld her terminal dues, leading to a claim of Kshs.1,256,500.00 plus twelve months' compensation, a certificate of service and payment of her HELB loan. The matter proceeded on pleadings, documents and consented submissions without oral evidence. The court framed three issues: the correct sum of terminal benefits, whether withholding was justified, and entitlement to compensation. It held that the Claimant, being registered with NSSF and a member of the pension scheme, was not entitled to gratuity under Section 35(5) as read with Section 35(6)(c) and (d) of the Employment Act, 2007. She was awarded two months' housing in lieu (Kshs.77,887.47 including electricity), Kshs.164,500.00 for unutilized leave and April 2011 salary, producing net terminal dues of Kshs.280,278.00 as computed by the Respondent. The court found the Claimant had duly handed over and that the Respondent unlawfully withheld even the undisputed amount, contrary to the good-faith duty to pay undisputed dues. Claims for compensation and the HELB loan were dismissed. Judgment: Kshs.280,278.00, certificate of service within thirty days, interest at court rates from 14th April 2011, and costs to the Claimant.

Key legal issues

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01

Correct sum of terminal benefits due

Holding

The Respondent's computation of Kshs.280,278.00 net pay was correct, including two months' housing in lieu (Kshs.73,956.47 plus Kshs.3,930.00 electricity), unutilized leave of Kshs.164,500.00 and April 2011 salary of Kshs.61,414.00 less tax; gratuity disallowed due to NSSF membership

Reasoning

The matter proceeded on pleadings and documents without oral evidence. The court found the Claimant was registered with NSSF and a member of the pension scheme, excluding gratuity under Section 35(5). Housing in lieu was payable because the Respondent curtailed the notice period. Undisputed leave pay was allowed; unsubstantiated encashment claims failed for want of proof.

p. 3
02

Whether the Respondent was justified in withholding terminal dues

Holding

The Respondent wrongly withheld the dues; the Claimant proved she handed over hospital property and vacated the flat, and the Respondent failed to pay even the undisputed amount

Reasoning

The Claimant's letter of 16th April 2011, stamped as received by the Human Resource Office, showed she returned hospital property and the house key. No further clearance demands were made. A good-faith employer must pay undisputed dues notwithstanding a dispute on other amounts; the Respondent's failure was unlawful.

p. 3
03

Entitlement to compensation

Holding

Compensation of twelve months' salary refused as the Claimant voluntarily resigned

Reasoning

The court held there was no evidence of unlawful conduct by the Respondent causing the resignation. Compensation under the Employment Act presupposes unfair termination, which does not arise on a voluntary resignation.

p. 3

Legal principles established

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  • Where there is a dispute on the amount of terminal benefits payable, an employer acting in good faith must pay the undisputed amount, e.g. by depositing it in the employee's salary account or submitting a cheque to the nearest Labour Office
  • An employer is obliged under Section 51 of the Employment Act, 2007 to provide a certificate of service

Court orders

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  1. 1.Payment of Kshs.280,278.00 terminal benefits to the Claimant
  2. 2.Provision of certificate of service within thirty (30) days
  3. 3.Interest on the award at Court rates from 14th April 2011 till payment in full
  4. 4.Respondent to pay the costs of the suit
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, 2007)

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, "Prisca Nyamwaya v Mp Shah Hospital [2015] KEELRC 50 (KLR)", Case Analysis (2015). Memorandum of Claim dated 5th March 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/50/eng@2015-12-18

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