Epco Builders Ltd v Lukunga (Appeal E140 of 2024) [2025] KEELRC 2457 (KLR)
The bottom line
#A Kenyan court cut a house allowance award from Kshs 546,975 to Kshs 105,655, confirming employers must pay house allowance unless salary clearly states it is consolidated.
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 trial court was justified in awarding the respondent house allowance of Kshs. 546,975/-
- 2.Whether the respondent's salary of Kshs. 19,500 was inclusive of (consolidated) house allowance, and if so, whether it was underpaid
Key legal issues
#Whether payment above the gazetted minimum wage covers house allowance
Payment of Kshs. 19,500 against a minimum wage of Kshs. 17,447.15 was plausible consolidation, but the statutory house allowance (15% of minimum wage, Kshs. 2,617.07) was underpaid by Kshs. 565 per month
The court accepted that the payslip did not state that payment was inclusive of housing allowance, so the trial court was justified in awarding house allowance. Applying the 15% industry practice to the gazetted minimum wage, the surplus of Kshs. 2,052.85 fell short of the Kshs. 2,617.07 house allowance by Kshs. 565 monthly, entitling the respondent to the difference of Kshs. 105,655/- for the period claimed.
Legal principles established
#- House allowance is a statutory requirement under section 31 of the Employment Act and the industry practice is that it is computed at 15% of the minimum (gross) wage
Court orders
#- 1.The judgment of the trial court for Kshs. 546,975/- on account of house allowance is set aside and replaced with a judgment for Kshs. 105,655/-
- 2.The appeal succeeds to the extent of the reduction of the house allowance award
- 3.Each party shall bear their own costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Magistrates' Court (employment and labour relations)
- CMEL No. E1713 of 2024
- Jurisdiction invoked
- Appellate jurisdiction under the Employment and Labour Relations Court Act (not expressly cited in the judgment; appeal from CMEL No. E1713 of 2024)
Relief refused
#Setting aside of the house allowance award in its entirety (substitution with a finding that salary was fully inclusive of house allowance)
The court found only a shortfall of Kshs. 565 in the house allowance element and awarded the difference rather than deleting the award wholly
Costs
Each party shall bear their own costs of the appeal
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.
The judgment of the trial court for Kshs. 546,975/- on account of house allowance is therefore set aside and replaced with a judgment for Kshs. 105,655/-. The appeal therefore succeeds to that extent.
House allowance is a statutory requirement under section of 31 the Employment Act.
Industry practice for minimum wage is usually 15% of the gross pay which in this case would be Kshs. 2,617.07.
The appeal being partially successful, each party shall bear their own costs of the appeal.
Issues in the judgment
#The judgment states 'the appellant is therefore entitled to this difference' when it plainly means the respondent is entitled, given the court upheld the house allowance award as varied
Typographical error in the statutory reference to the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Epco Builders Ltd v Lukunga (Appeal E140 of 2024) [2025] KEELRC 2457 (KLR)", Case Analysis (2025). Not stated in the judgment text beyond reference to CMEL No. E1713 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2457/eng@2025-09-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.