Karimi v Katheri Farmers Co-operative Society Limited (Cause E022 of 2023) [2024] KEELRC 2718 (KLR)
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
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 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
#Whether 'salary' for purposes of CBA retirement benefits means basic or gross salary
The court adopted the respondent's computation based on basic salary, totaling Kshs 1,279,776
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.
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.Declaration that the respondent has constructively dismissed the claimant
- 2.Award of Kshs.270,100.00 for the unlawful dismissal
- 3.Terminal dues under clause 18 of the CBA assessed at Kshs.1,279,776
- 4.Costs and interest at court rates from the date of the judgment
- 5.The award is subject to statutory deductions
The bench
#One judgment of the whole court — no separate or dissenting opinions.
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
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.
c. Terminal dues under clause 18 of the CBA assessed at Kshs.1,279,776.
d. Costs and interest at court rates from the date of the judgment.
Issues in the judgment
#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.