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
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimant is entitled to the gratuity pay of Kshs 7,119,820/= upon retirement
- 2.Whether the Claimant is entitled to compensatory or general damages for breach of contract
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
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and the Employment Act, 2007
Relief refused
#Compensatory or general damages for breach of contract
No sufficient basis laid out for general damages in employment matters; compensation governed by Section 49 of the Employment Act
Costs
Each party shall bear their 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.
In conclusion the Court hereby orders 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.
Considering the nature of the claim, each party shall bear their own costs.
this court finds the CBA to be binding between the parties since an agreement is always binding between parties
an employee is entitled to have more than one social security scheme and that any pension monies paid to a scheme, such as NSSF, should be deducted from the benefit conferred by the superior social security scheme
Issues in the judgment
#The claimant's claimed sums are inconsistent within the judgment: the claim pleads Kshs 7,119,820/- while CW1's evidence records a demand of Kshs 7,128,000/-
The final order shows the figure '7,119,820/' with a trailing slash and no final digit, suggesting an omission in the typed judgment
The judgment's coram describes the presiding officer as 'PRESIDING JUDGE-APPEALS DIVISION' although this is a first-instance claim, creating ambiguity as to the proper designation
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.