Osawo v Chuna Co-operative Savings and Credit Society Limited (Cause 606 of 2019) [2024] KEELRC 2372 (KLR)
The bottom line
#A retired Sacco employee won his Kshs 7.1 million gratuity claim under a CBA, though pension and NSSF contributions were deducted.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to gratuity under the CBA upon early retirement
The Claimant is entitled to gratuity of two months' salary per year worked under clause 7(D)4 of the CBA, computed on his last salary of Kshs 104,525, less the Respondent's pension and NSSF contributions
The court found the CBA binding since it was between the Respondent and the Claimant's union and had never been jointly revised, so it remained in force at retirement in 2018. Section 35(6)(b) of the Employment Act excepts gratuity under a CBA. Following the Court of Appeal in Ng'araria Girls, the court held superior CBA benefits are payable, deducting the 12.5% pension and NSSF contributions to avoid double payment. The Respondent produced no evidence to displace the last salary shown on the payslips.
Compensatory or general damages for breach of contract
The prayer for general damages was refused as no basis was laid for it
The court noted that general damages for breach of contract in employment matters require a strong basis, with compensation governed by Section 49 of the Employment Act. Relying on D K Njagi Marete v Teachers Service Commission, where the Court of Appeal refused general damages absent a laid basis, the court declined the award since the Claimant had already been compensated through the gratuity payable under the CBA.
Legal principles established
#- A CBA that has not been jointly revised remains in force and binding between the parties beyond its initial three-year term
- Section 35(6) of the Employment Act does not preclude parties from agreeing to gratuity or retirement benefits over and above statutory social security, but pension and NSSF contributions are deductible from CBA gratuity
Court orders
#- 1.That the claimant be paid his gratuity pay of Kshs 7,119,820/- less contributions made by the Respondent to the Pension Scheme and NSSF
- 2.Each party shall bear their own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Osawo v Chuna Co-operative Savings and Credit Society Limited (Cause 606 of 2019) [2024] KEELRC 2372 (KLR)", Case Analysis (2024). Not stated in excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2372/eng@2024-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.