Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCOtherNot stated in the judgment

Karimi v Katheri Farmers Co-operative Society Limited (Cause E022 of 2023) [2024] KEELRC 2718 (KLR)

Employment and Labour Relations Court
5 November 2024
529 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~2 min to read original · ~4 min brief

The bottom line

#

A Kenyan court ruled that when a CBA says 'salary' without defining it, it means basic salary — not gross pay including allowances.

What this practically means

#

Executive summary

#
This ruling by the Employment and Labour Relations Court at Meru finalised the computation of terminal dues following the court's judgment of 12th September 2024, in which the respondent was found to have constructively dismissed the claimant and awarded Kshs.270,100.00 plus terminal dues under clause 18 of the CBA. The court had directed the respondent to compute the terminal dues and file the computation for adoption. The respondent computed pension of Kshs.359,568 plus 60 days salary for every year completed in service at Kshs.920,208, totalling Kshs.1,279,776, based on basic monthly salary. The claimant agreed with the pension figure but disputed the use of basic salary, contending that gross salary of Kshs.27,010 should apply, which would yield Kshs.1,656,048. The court examined clauses 18 and 19 of the CBA, which provide for full retirement benefits for graded staff who have served over ten years and attained forty years, comprising the provident fund plus 60 days salary for every year completed. Finding that 'salary' was undefined in the CBA, the court held that the parties intended basic salary, since nothing prevented them from expressly using 'gross salary' had allowances been intended. Applying the Court of Appeal's definition of gross salary in Postal Corporation of Kenya vs. Andrew K. Tanui, the court adopted the respondent's computation of Kshs.1,279,776 and issued final orders including the declaration of constructive dismissal, the award, costs and interest, subject to statutory deductions.

Questions the Court framed

#

The issues the Court set itself to decide, in its own words.

  1. 1.Whether the computation of the 60 days salary per year of service under the CBA should be based on basic salary or gross salary

Key legal issues

#
01

Whether 'salary' for purposes of CBA retirement benefits means basic or gross salary

Holding

The court adopted the respondent's computation based on basic salary, totaling Kshs 1,279,776

Reasoning

The CBA did not define 'salary'. The court reasoned that had the parties intended to include allowances, they would have expressly used the term 'gross salary'. Relying on the Court of Appeal's definition in Postal Corporation of Kenya vs. Andrew K. Tanui, gross salary comprises basic salary plus allowances, and each case must be examined to determine whether allowances form part of gross salary. The court found the parties intended basic salary and agreed with the respondent's computation.

p. 2

Legal principles established

#
  • Where a CBA refers to 'salary' without defining it, the term is construed as basic salary unless the agreement expressly adopts gross salary

Court orders

#
  1. 1.Declaration that the respondent has constructively dismissed the claimant
  2. 2.Award of Kshs.270,100.00 for the unlawful dismissal
  3. 3.Terminal dues under clause 18 of the CBA assessed at Kshs.1,279,776
  4. 4.Costs and interest at court rates from the date of the judgment
  5. 5.The award is subject to statutory deductions

The bench

#

One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Continuation of a first-instance employment claim in which the court retained jurisdiction to adopt the computation of terminal dues as part of the judgment

Relief refused

#

Claimant's contention that terminal dues should be computed on gross salary of Kshs 27,010, totalling Kshs.1,656,048

The court held that 'salary' in the CBA meant basic salary, as the parties would have expressly used 'gross salary' had they intended to include allowances

p. 2

Costs

Costs and interest at court rates from the date of the judgment

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.

Salary has not been defined in the CBA, but I believe that the parties intended it to mean basic salary otherwise, nothing prevented them from expressly using the gross salary if they intended to include allowances.
p. 2Interpretation of 'salary' in a CBA
c. Terminal dues under clause 18 of the CBA assessed at Kshs.1,279,776.
p. 2Final orders
d. Costs and interest at court rates from the date of the judgment.
p. 2Costs order

Issues in the judgment

#
minor

The judgment refers to terminal dues under 'clause 18' and 'clause 19' of the CBA interchangeably without clarifying the distinction

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Karimi v Katheri Farmers Co-operative Society Limited (Cause E022 of 2023) [2024] KEELRC 2718 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2718/eng@2024-11-05

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