Dues Payable Upon The Death Of An Employee

There are various laws which lay out the various substantive steps to be taken by an employer upon the death of an employee. These laws include:

• The Work Injury Benefits Act - this Act sets out the compensation payable to employees for work related injuries or diseases contracted in the course of undertaking their employment;
• The Occupational Health and Safety Act - this Act provides for the safety, health and welfare of all persons lawfully present at a workplace; and
• The Employment Act - this Act sets out the minimum basic terms of employment.

Death in the course of duty

The Work Injury Benefits Act (WIBA) provides for the right to compensation upon death, where the death results from the occurrences envisaged in the Occupational Health and Safety Act which include: 

• a disease contracted due to an occupational hazard;
• a disease that is directly related to the tasks undertaken in the place of work; or
• an accident arising out of and in the course of the employee’s employment.

WIBA provides that an employee would be entitled to compensation if the death of the employee is deemed to have “arisen out of and in the course of employment if the accident was due to an act done by the employee for the purpose of, in the interests of or in connection with, the business of the employer despite the fact that the employee was, at the time of the accident acting (a) in contravention of any law or any instructions by or on behalf of his employer; or (b) without any instructions from his employer.”

Section 10(3) of WIBA however qualifies the foregoing by providing that an employee is not entitled to compensation if the accident was as a result of the deliberate and willful misconduct of the employee.

Dues Payable

So what dues are payable upon death?

• Compensation under the Work Injury Benefits Act (WIBA)

WIBA requires every employer to obtain insurance coverage with an insurer approved by the Insurance Regulatory Authority for any liability an employer may incur under the Act with respect to any of its employees. 

Compensation is payable to the employee’s dependants who are defined to include: the employee’s widow or widower, child, parent, sibling, grandparent or grandchild and any other person who was fully dependent on the employee.

The Work Injury Benefits Act categorizes death as 100% permanent disablement whose compensation is calculated on the basis of gross salary inclusive of any allowances or other special remuneration of a regular nature for 96 months. Additionally, the employer is liable to pay reasonable expenses for the funeral of the deceased employee.

It is worth noting that the court in the Constitutional Petition - Juma Nyamawi Ndungo & 5 others v Attorney General; Mombasa Law Society (Interested Party) [2019] eKLR held as follows:

“It is the finding hereof that the provisions of Section 16 and 53 (2) (d) and 53 (2) (e) of the WIBA being a usurpation of judicial power by the executive means that not only are these provisions inconsistent with the constitution but also that the provisions of Section 10, 23, 26, 28, 30, 33, 37, 51, 53 (2) (d), 53 (2) (e), 58 (2) and the First Schedule to the Act to the extent that they promote the impugned Section 53(2) (d) and 53(2)(e) of the WIBA are also unconstitutional to that extent as the director therein is neither an independent tribunal nor a court, hence cannot exercise judicial powers”.

• Dues payable under the Employment Act

The Employment Act is silent on the dues payable upon the death of an employee. This Act however provides for the dues payable to an employee upon termination of employment. These dues would be:

1. any unpaid salary due to the employee as at the date of death;
2. service pay (where applicable);
3. any commissions owed;
4. unutilized leave days calculated on a pro-rata basis; and
5. any other benefit the employee could have accrued under contract, policy or collective bargaining agreement.

Service pay is payable where there has been non remittance or inconsistent remittance of NSSF dues, at any point of the employment period. In tabulating the amount of service pay due we are guided by the decision of the courts in Martin Ireri Ndwiga v Olerai Management [2017]. The courts awarded service pay at fifteen (15) days’ pay for every completed year of service.

• Dues payable under the Human Resource policy or manual

Where an organization’s policy provides for the dues payable upon the death of an employee, the employer would be liable to remit the same to the employee’s estate. By virtue of Section 26 of the Employment Act, the application of the human resource policy or manuals would be applicable where the policy entitles the employee to more favorable terms.

Procedural framework 

• Notification of death 

The Employment Actprovides that the employer should notify the labour officer or the deputy county commissioner as soon as is practicable.

WIBA mandates the employer to notify the Director of Occupational Health and Safety of a fatal accident which occurs in the course of employment within 24 hours of its occurrence. Notification should be made by filing the requisite form. 

• Remittance of dues 

It is important to note that remittance of the foregoing dues must be done in compliance with the relevant law.

Where the compensation flows from an insurance policy, the terms of the policy will govern how the dues are paid. Ordinarily the payment would be made to the nominee as appointed by the deceased in the relevant forms.

Under the WIBA,Section 20 provides that the compensation paid upon the death of an employee does not form part of the employee’s estate.

Under the Employment Act, after the notification of death, the legal representatives of the employee- upon furnishing the employer with the letters of administration- will be entitled to receive the wages and any other remuneration or property due to the deceased employee as at the date of death. Such payment should be paid out to the legal representative within thirty (30) days of receiving the letters of administration. 

The employer should thereafter furnish the labour officer or the deputy county commissioner with proof of having made such payment. If after three (3) months after the employee’s death no legal representative has laid claim to the wages or any other entitlement due to the deceased, the Act provides that the employer delivers the sums payable to the labour officer or the deputy county commissioner. The labour officer or the deputy county commissioner shall hold the wages in trust for the employee’s estate and beneficiaries.

The Law of Succession Act 

Section 45 of this Act restricts any person from taking possession, disposing or otherwise intermeddling with the free property of a deceased person. It is the role of the legal representative of the estate to administer all property of the deceased employee. This   includes the dues payable by the employer under the Employment Act.

It is important to note that the wages should not be remitted to the employee’s next of kin as indicated in the staff information sheet filled by the employee during on boarding. The Court in Beatrice Ayieko (Suing as the administratrix of the estate of Oscar Smith Njinuti-Deceased v Cellulant Kenya Limited stated that,” …Second, the staff information sheet only names Lucy Mukami as the next of kin of the Deceased and not necessarily as a beneficiary of the benefits accruing from the employment of the Deceased, the Respondent assigned to itself a role that is clearly not within its province…”

How we can help?

The Corporate and Commercial Business Unit at CM Advocates LLP is well versed in matters relating to Employment and Labour law ranging from contract drafting and review; advisory on matters employment, immigration and regulatory compliance.

 We assist both employers and employees by informing them of the rights and obligations under law. We also assist in conducting health scans and audits to ensure all organizations have practical and legally sound policies which are essential to your business. 

Should you have any questions regarding employment or labour law, please do not hesitate to contact: Victorine Rotich on vrotich@cmadvocates.com or Emily Gitau on egitau@cmadvocates.com.