University of Nairobi v Ileve (Employment and Labour Relations Appeal E047, E188, E164 & E178 of 2022 & E066 & E070 of 2020 & E160, E162 & E135 of 2021 (Consolidated)) [2023] KEELRC 3136 (KLR)
The bottom line
#Kenya's Employment Court ruled the University of Nairobi correctly calculated employee gratuity, confirming CBAs cannot be backdated and magistrates' courts can hear individual employment claims.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the University correctly computed the gratuity hence no cause of action
- 2.Whether the University wrongly computed gratuity hence the trial court was justified in computing the same and making an award against the University
- 3.Whether a CBA can apply retrospectively
- 4.Whether the Chief Magistrate's Court was vested with jurisdiction to determine the service gratuity claims as presented by the Claimants
Key legal issues
#Jurisdiction of the Chief Magistrate's Court over the gratuity claims
The Chief Magistrate's Court had jurisdiction; the claims were individual contract claims, not trade disputes, and the Claimants earned below Kshs 80,000 gross monthly pay
Gazette Notice No. 6024 excludes trade disputes under the Labour Relations Act from magistrates' jurisdiction, but magistrates may hear employment contract disputes where gross monthly pay does not exceed Kshs 80,000. The claims were not reported to the Minister for conciliation, were instituted by individual employees, and KUDHEIHA was not a party. Following Benta Achieng Odinyo, the trial courts had jurisdiction.
Retrospective application of the 2013-2017 CBA
The CBA could not apply retrospectively to the period prior to 1st July 2013; the applicable gratuity before that date was 28 days per the prior CBA
Under section 59 of the Labour Relations Act, a collective agreement binds for the period of the agreement and takes effect from the date agreed by the parties. The 2013-2017 CBA had an effective date of 1st July 2013 and no retrospective provision. Applying it to earlier periods would rewrite the parties' contract. The Court adopted Mukiria Farmers, Kenya Union of Sugar Plantation, and the Moseti and Alusa decisions.
Correct computation of gratuity and applicable clause
The University correctly computed the gratuity; clause 40(c) did not apply since the Respondents were not on contract, clause 40(h) did
Clause 40(h) provided 31% of the basic salary for every completed year, while clause 40(c) applied to staff on contract, which the Respondents were not. The University's computation based on 28 days prior to the CBA's effective date and 31% thereafter was correct, so no cause of action arose.
Legal principles established
#- A CBA binds the parties for the period of the agreement and is not retrospective unless the parties agree it to be
- A Chief Magistrate's Court has jurisdiction to adjudicate a dispute between an employer and an individual employee over contractual entitlements where gross pay falls within the Gazette Notice threshold, as distinct from a trade dispute between a union and an employer
Court orders
#- 1.That the University correctly calculated the gratuity hence no cause of action arises
- 2.That the 2013-2017 CBA did not provide for retrospective application hence cannot apply to the period prior to 2013
- 3.Each party bears its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Chief Magistrate's Court
- not stated
- Jurisdiction invoked
- Appellate jurisdiction of the Employment and Labour Relations Court over appeals from the Magistrates' Court; Gazette Notice No. 6024 of 10th June 2018 and the Employment and Labour Relations Court Procedure Rules on magistrates' jurisdiction
- Consolidated with
- Multiple appeals dated on diverse dates consolidated, including Appeal No. E014 of 2021 and Appeal No. E161 of 2021 referenced as related decisions
Relief refused
#Respondents' claim to gratuity computed at 31% of basic salary backdated to their dates of employment
A CBA applies only for the period of the agreement and is not retrospective unless the parties so agree; clause 40(h) and not 40(c) applied and computation from employment dates had no contractual basis
Costs
Each party bears its own costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
That the University correctly calculated the gratuity hence no cause of action arises.
The 2013-2017 CBA did not provide for retrospective application hence cannot apply to the period prior to 2013.
Each party bears its own costs.
A CBA is applicable during its valid period. It is not retrospective unless the parties agree it to be
I find the Chief Magistrate Courts had jurisdiction to hear and determine the claims filed before them.
Issues in the judgment
#The judgment is unclear about the identity of the respondents, referring variously to individual claimants and KUDHEIHA without a formal parties listing
The judgment inconsistently cites clause 40 of the CBA as clause of the Labour Relations Act in one passage
The case number of the appeals before this Court is not stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "University of Nairobi v Ileve (Employment and Labour Relations Appeal E047, E188, E164 & E178 of 2022 & E066 & E070 of 2020 & E160, E162 & E135 of 2021 (Consolidated)) [2023] KEELRC 3136 (KLR)", Case Analysis (2023). Appeals (consolidated) arising from judgments of the Chief Magistrate's Court, Nairobi. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3136/eng@2023-11-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.