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Service/Terminal Benefits - Interpretation needed
MaichBlack
#1 Posted : Sunday, March 24, 2013 11:36:02 AM
Rank: Elder


Joined: 7/22/2009
Posts: 7,265
An employee resigns his job after giving and serving the required notice. Employer acknowledges in writting, thanks the employee for his service and regrets his leaving.

Fast forward three months. The employer is refusing to pay for service on the basis that according to the "new" labour laws an employee is not entitled to service pay if his employer has been paying for his NSSF!

This makes absolutely no sense. Service pay and NSSF are totally different things! Furthermore, service pay is half a salary for every year worked which translates to tens or hundreds of thousands for every year served depending on one's salary. NSSF on the other hand is a mere 200/= per month which translates to 2,400/= per year served. Who would craft such a law? And where would Atwoli be at that time? Further more, NSSF is a statutory deduction covering every employee which means such a law would virtually lock out every employee!

Anyone with information on this, kindly share.

I have read section 35 of the 2007 Employment Act and I need an accountant/lawyer/anyone in the the know to provide more light.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
MaichBlack
#2 Posted : Sunday, March 24, 2013 11:44:49 AM
Rank: Elder


Joined: 7/22/2009
Posts: 7,265
What Section 35 of the 2007 employment act says:

PART VI―TERMINATION AND DISMISSAL

35. (1) A contract of service not being a contract to perform specific work, without reference to time or to The Employment Act, 2007 undertake a journey shall, if made to be performed in Kenya,
be deemed to be―
(a) where the contract is to pay wages daily, a contract terminable by either party at the close of any day without notice;
(b) where the contract is to pay wages periodically at intervals of less than one month, a contract
terminable by either party at the end of the period next following the giving of notice in writing; or
(c) where the contract is to pay wages or salary periodically at intervals of or exceeding one month, a contract terminable by either party at the end of the period of twenty-eight days next following the giving of notice in writing.
(2) Subsection (1) shall not apply in the case of a contract of service whose terms provide for the giving of a period of notice of termination in writing greater than the period required by the provision of this subsection which would otherwise be applicable thereto.
(3) If an employee who receives notice of termination is not able to understand the notice, the employer shall ensure that the notice is explained orally to the employee in a language the employee understands.
(4) Nothing in this section affects the right-
(a) of an employee whose services have been terminated to dispute the lawfulness or fairness of the termination in accordance with the provisions of section 46; or
(b) of an employer or an employee to terminate a contract of employment without notice for any cause recognised by law.
(5) An employee whose contract of service has been terminated under subsection (1) (c) shall be entitled to service pay for every year worked, the terms of which shall be fixed.
(6) This section shall not apply where an employee is a member of-
(a) a registered pension or provident fund scheme under the Retirement Benefits Act;
(b) a gratuity or service pay scheme established under a collective agreement;
(c) any other scheme established and operated by an employer whose terms are more favourable than those of the service pay scheme established under this section; and
(d) the National Social Security Fund.

Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
maka
#3 Posted : Sunday, March 24, 2013 12:08:14 PM
Rank: Elder


Joined: 4/22/2010
Posts: 11,101
Location: Nairobi
The employer is right. There are now about four decisions of the Industrial Court that confirm if the employer is deducting and remitting NSSF then service pay is not payable. Unless the Court of Appeal reverses this decisions they stand
possunt quia posse videntur
newfarer
#4 Posted : Sunday, March 24, 2013 2:23:56 PM
Rank: Elder


Joined: 3/19/2010
Posts: 3,249
Location: Uganda
employment act 2007 is very anti-employee.I prefer the earlier act which was repealed.
its true that if your employer contributes to nssf you are not entitled to service unless:

1.your contract provide for it
2.you are a member of a trade union which has a cba which provides for service /gratuity with your employer.
.

but you can claim for gratuity for service upto 2007 when the new act became effective if you were with the same employer.

the old act expressedly provided for 15days gratuity for every year worked.

Atwoli slept on the job.hope the next government/Parliament will look into this
punda amecheka
MaichBlack
#5 Posted : Saturday, March 30, 2013 9:54:39 AM
Rank: Elder


Joined: 7/22/2009
Posts: 7,265
Anyone else with something to add? Replacing service with NSSF [Which is a statutory deduction in the first place] doesn't make much sense to me! Was this law drafted by the employers while worker's organizations [starting with Atwoli] were asleep. We should even have heard some noise!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
MaichBlack
#6 Posted : Monday, June 24, 2013 1:00:08 PM
Rank: Elder


Joined: 7/22/2009
Posts: 7,265
maka wrote:
The employer is right. There are now about four decisions of the Industrial Court that confirm if the employer is deducting and remitting NSSF then service pay is not payable. Unless the Court of Appeal reverses this decisions they stand

From what point does this apply?

1) 2007 - After the act was enacted?

2) From the time one joined NSSF?

3) Blanket?
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
King G
#7 Posted : Monday, June 24, 2013 6:08:48 PM
Rank: Elder


Joined: 6/20/2012
Posts: 3,855
Location: Othumo
@ MaichBlack @ maka is right.

You are confusing service pay section 35 (5) and severance pay section 40 (1) (f) both in the employment act no. 11 of 2007 which are two totally different things. You resigned out of your on will, you go away with nothing.

But section 18(4) of the same act requires that you are paid all your benefits/dues outstanding including accrued leave at the point of resignation.
Thieves
King G
#8 Posted : Monday, June 24, 2013 6:11:53 PM
Rank: Elder


Joined: 6/20/2012
Posts: 3,855
Location: Othumo
Further, you need to check the provisions of the human resource manual (HR policies and procedures)of the company
Thieves
newfarer
#9 Posted : Wednesday, July 10, 2013 8:25:55 PM
Rank: Elder


Joined: 3/19/2010
Posts: 3,249
Location: Uganda
I wonder why this thread hasn't gained currency yet 91.999% of wazuans are employees.ama ni vile hii employment act haikupishwa na Raila .
anyway let me assume you are all in a comfort zone.


below are some provisions in the employment act that are very unfavorable to employees namely :

1.gratuity or service. if you a member of nssf and your employer pays your 400/- contribution to nssf you can't claim for service / gratuity for years worked unless your contract provides for this.

2.hours of work
there is no provision in the employment act 2007 on the standard no of hours required from an employee per day or week.this was expressly provided for in cap 229 which was repealed in 2007.
3.sick leave
employment act provides for only 7 days with full pay and a further 7 days with half pay then no pay thereafter.cap 229 provided for 30 days with full pay.if you have a heartless employer you are legitimately Kethied

these are some of the things as an employee you should be aware of

employees in wazua go to your mp pass this and any other section of the employment act you find unfavorable .find your MP From Facebook linked Google and pass the message.
tusikuwe makethis panganga no action. whiners

you might need this in future. life is full of suprises
punda amecheka
newfarer
#10 Posted : Monday, July 22, 2013 7:56:01 PM
Rank: Elder


Joined: 3/19/2010
Posts: 3,249
Location: Uganda
@ maka this is what I mean when I say employment act 2007 is a worthless waste of government printer stationery. of course most wazuans are above the minimum wage conditions. I guess.
unless nssf odongo had a contract expressly specifying what is due to him upon termination,he will be paid one month notice and days earned in July ie 22 days.that's what the worthiless employment act says.
that's why I always remind wazuan instead of the bickering Mara cord this ..jubilee that... pass this message to your MP :the employment act needs to be ammended to correct these flaws.
tomorrow it could be you.
punda amecheka
XSK
#11 Posted : Friday, August 02, 2013 4:20:04 PM
Rank: Veteran


Joined: 12/8/2009
Posts: 956
Location: Nairobi
newfarer wrote:
@ maka this is what I mean when I say employment act 2007 is a worthless waste of government printer stationery. of course most wazuans are above the minimum wage conditions. I guess.
unless nssf odongo had a contract expressly specifying what is due to him upon termination,he will be paid one month notice and days earned in July ie 22 days.that's what the worthiless employment act says.
that's why I always remind wazuan instead of the bickering Mara cord this ..jubilee that... pass this message to your MP :the employment act needs to be ammended to correct these flaws.
tomorrow it could be you.


How do we pass this message to all employees so that they lobby their MPs? It makes one very scared of leaving employment, you wait to be kicked out!!! Its very sad. However i am told that it was supposed to be done concurrently with the conversion of NSSF into a "provident fund" (i am not sure what this means)where the NSSF conributions were to go up to 7% of gross pay from both employee and the employer. However along the line, the law was changed but the NSSF conversion was shelved. Guess where this leaves the employees... without a parachute or even a simple umbrella.
You will know that you have arrived when money and time are not mutually exclusive "events" in you life!
CLK
#12 Posted : Sunday, August 04, 2013 9:45:19 PM
Rank: Member


Joined: 4/1/2009
Posts: 846
before you jump at the figure down there, read the fine lines, personally i look at the medical cover, provident fund and 13th month salary or bonus before making a move, you could work for an organization for decades and go home with nothing if you are laid off or company collapses...
maka
#13 Posted : Monday, August 05, 2013 7:40:18 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,101
Location: Nairobi
XSK wrote:
newfarer wrote:
@ maka this is what I mean when I say employment act 2007 is a worthless waste of government printer stationery. of course most wazuans are above the minimum wage conditions. I guess.
unless nssf odongo had a contract expressly specifying what is due to him upon termination,he will be paid one month notice and days earned in July ie 22 days.that's what the worthiless employment act says.
that's why I always remind wazuan instead of the bickering Mara cord this ..jubilee that... pass this message to your MP :the employment act needs to be ammended to correct these flaws.
tomorrow it could be you.


How do we pass this message to all employees so that they lobby their MPs? It makes one very scared of leaving employment, you wait to be kicked out!!! Its very sad. However i am told that it was supposed to be done concurrently with the conversion of NSSF into a "provident fund" (i am not sure what this means)where the NSSF conributions were to go up to 7% of gross pay from both employee and the employer. However along the line, the law was changed but the NSSF conversion was shelved. Guess where this leaves the employees... without a parachute or even a simple umbrella.


As a starting point it is important to remember that the Industrial Courts derive their jurisdiction from the Labor Institutions Act (enacted along with the Employment Act) and the Industrial Court Act.

These Acts read together, grant the Industrial Courts exclusive jurisdiction to hear labor/employment disputes.

It is now settled law that no employee can be unfairly terminated.

The Employment Act recites what would be considered unfair termination unless the employer fails to prove otherwise.

Importantly the Act takes a different application of the evidentiary burden of proof. The burden of proof here is on the employer AND NOT the employee.

Therefore, the employer not only must prove fair reasons for termination, but also that it followed all the principles of Natural Justice including procedures to investigate the matter, conducted a hearing, and properly handled any appeals before resorting to termination.

If the employer is unable to prove this then the termination will be deemed to have been unfair.

Now what remedy is there for unfair termination? Read the Employment Act carefully and in particular Section 45: If a termination is deemed unfair, the Industrial Court not only has the power to award damages up to the equivalent of TWELVE MONTHS of gross salary, but can also order REINSTATEMENT to the same job position, or re-engagement under a similar position.

Is that an Act that is a worthless piece of paper? NO.

Ask yourself why the Board's members were keen on arguing that the relationship between Odongo and the Board has irretrievably broken down. They know that if the Court is so inclined It may order that Odongo gets a handsome one year bonus and still retains his job for the duration of the contract.

NSSF has this habit of treating its Managing Trustees like riffraff. One remembers how Alex Kazongo and Naftali Mogere were un ceremoniously bundled out of office. It is about time that they were hit with a big judgment so that they know that people do have rights.

And to make matters even better in a recent decision in Petition No. 341 of 2011 Justice Lenaola decreed that Section 45(3) of the Employment Act (the one stating that one must have worked for 12 months before getting this compensation) is unconstitutional.


The litigant had worked for 11 months and his case was dismissed. He therefore appealed to the High Court and prayed for a declaration that his right to fair labour practices under Article 41(1) of the Constitution had been violated by his employer.

Justice Lenaola in agreeing observed that the Employment Act was enacted in 2007 before the enactment of the 2010 Constitution of Kenya and therefore there was need to align the provisions of all statutes enacted prior to it with the said Constitution.

Judge Lenaola therefore declared and issued an order stating that section 45(3) of the Employment Act 2007 was inconsistent with the provisions of the Constitution of Kenya particularly Articles 28,41 (1), 47, 48 and 50(1) as the said section purported to deny the petitioner the rights and freedoms enshrined in the said Articles of the Constitution.

That makes the situation even better and despite the fact that so far none of the matters before Court has reached a full judgment based on that decision it follows that one can get 12 months Compensation even if you have worked for a day.
 
The Industrial Court has done this day after day and passed several judgments fortifying the position that compensation and reinstatement is a recognizable statutory award. I hope they do it in this case as well..
possunt quia posse videntur
newfarer
#14 Posted : Monday, August 05, 2013 8:25:34 AM
Rank: Elder


Joined: 3/19/2010
Posts: 3,249
Location: Uganda
kudos !
maka weka contacts nikae nazo .I know an employer who is notorious for unfair dismissal and I may get you some clients.
punda amecheka
accelriskconsult
#15 Posted : Monday, August 05, 2013 9:35:02 AM
Rank: Member


Joined: 4/2/2011
Posts: 629
Location: Nai
MaichBlack wrote:
An employee resigns his job after giving and serving the required notice. Employer acknowledges in writting, thanks the employee for his service and regrets his leaving.

Fast forward three months. The employer is refusing to pay for service on the basis that according to the "new" labour laws an employee is not entitled to service pay if his employer has been paying for his NSSF!

This makes absolutely no sense. Service pay and NSSF are totally different things! Furthermore, service pay is half a salary for every year worked which translates to tens or hundreds of thousands for every year served depending on one's salary. NSSF on the other hand is a mere 200/= per month which translates to 2,400/= per year served. Who would craft such a law? And where would Atwoli be at that time? Further more, NSSF is a statutory deduction covering every employee which means such a law would virtually lock out every employee!

Anyone with information on this, kindly share.

I have read section 35 of the 2007 Employment Act and I need an accountant/lawyer/anyone in the the know to provide more light.




Are we talking about severance pay here?

Your need to consider the following;

1. The employment contract - did it provide for a pension on top of NSSF?

2. The employee resigned --- and therefore severance pay would not apply.
newfarer
#16 Posted : Monday, March 21, 2016 6:33:16 AM
Rank: Elder


Joined: 3/19/2010
Posts: 3,249
Location: Uganda
Employment act 2007, very anti wanjiku. Major flaws with a lot of 'may'


www.standardmedia.co.ke/...s-close-offices?pageNo=3
punda amecheka
Lolest!
#17 Posted : Monday, February 25, 2019 4:19:16 AM
Rank: Elder


Joined: 3/18/2011
Posts: 11,645
Location: Kianjokoma
newfarer wrote:
@ maka this is what I mean when I say employment act 2007 is a worthless waste of government printer stationery. of course most wazuans are above the minimum wage conditions. I guess.
unless nssf odongo had a contract expressly specifying what is due to him upon termination,he will be paid one month notice and days earned in July ie 22 days.that's what the worthiless employment act says.
that's why I always remind wazuan instead of the bickering Mara cord this ..jubilee that... pass this message to your MP :the employment act needs to be ammended to correct these flaws.
tomorrow it could be you.

Yeah, we need to
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