A judge has ordered a leading hardware store to compensate an elderly man and a former worker who served without going on leave for 22 years.
David Ndegwa Mungai retired in November 2021 after working as a sales executive at Alibhai Shariff & Sons Ltd for a record 60 years. He told the court he sought leave, but the request was denied.
Justice Christine Baari of the Employment and Labour Relations Court said when not taken, annual leave becomes an accrued benefit that is monetised and paid out at separation.
“The respondent (employer) has not led any evidence to demonstrate that it encouraged the claimant to take his leave and for this reason, I proceed to award the claimant (Mr Mungai) leave pay for three (3) years at the rate of Sh 59,520 per year, being the rate agreed to by the parties,” said the judge.
The judge pointed out that the Employment Act states that workers are entitled to 21 working days of leave with full pay. She said the employer must ensure staff take leave every year.
“Ordinarily, leave should not be postponed and a directive to an employee by the employer to take leave is not considered a punishment,” said the judge.
The former employer opposed the claim saying it was time-barred and contrary to the express provisions of the Employment Act.
Another win
In yet another win for Mr Mungai, the court directed the former employer to honour a retirement package it had promised him. Mr Mungai said Alibhai Shariff & Sons Ltd committed to paying the severance pay and the leave days not taken in monthly instalments for three years.
He said the first instalment of Sh89,425.00 was paid on May 4, 2022 and the second instalment of an equal amount was paid on June 3, 2022, and thereafter nothing was paid.
Mr Mungai said the partial payments were sufficient acknowledgment of liability, and their failure to advance any reasonable justification for withholding his dues underscores the lack of merit in the firm’s defence.
The judge said the fact that Mr Mungai put in long service was not in doubt. “60 years working for one employer, only to retire at the age of 83 is definitely no mean feat. The time served by the claimant in all fairness deserved a retirement package better than the measly NSSF,” said the judge.
The judge said in her view, having partially honoured the deal, the employer was prevented from denying its existence and its binding nature.
“In the premise, I reach the conclusion that the claimant is entitled to the payment of the retirement package as computed by the respondent, and which is hereby awarded in the sum of Sh2,053,150,” said the judge.
The employer opposed the case arguing that the computation done by Mr Mungai was not an entitlement but a discretionary 'golden handshake' in appreciation of the 60 years of service, which was still the subject of negotiations between the parties.
The company said that Mr Mungai was, therefore, not entitled to payment of the golden handshake, which is merely discretionary and not obligatory, and which should be founded on the mutual consent of the parties.
In any event, the company said Mr Mungai was a registered National Social Security Fund (NSSF) member and the employer duly remitted the statutory contributions to which he was entitled upon retirement.
The judge ordered the former employer to pay Mr Mungai a retirement package of Sh2.053 million and Sh178,560 for leave not taken.
