Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal 38 of 2005· [2008] KECA 103 (KLR)

KENYA PORTS AUTHORITY v SILAS OBENGELE [2008] KECA 103 (KLR)

Court of Appeal of Kenya
25 July 2008
SBS.E.O. BosireEOE.O. O'KubasuJAJ. Aluoch
3,414 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

#

Kenya Ports Authority wrongfully retired an employee without the required hearing, but his damages were cut because he claimed too much.

What this practically means

#

Executive summary

#
The Court of Appeal at Malindi (Bosire, O'Kubasu and Aluoch JJA) delivered a single joint judgment in this employer's appeal against a High Court (Khaminwa J) award to a former Kenya Ports Authority Pensions and Properties Officer retired at age 51 by letter dated 31st October 1994. The Court held that Staff Regulation B.11 entrenched a right to be heard before compulsory retirement of pensionable employees in Grade PA4 and above, and that the Authority flagrantly ignored it, since the retirement letter quoted regulation 6(1) of the Pensions Regulations but omitted B.11. The breach made the termination wrongful and entitled the respondent to damages, but the Court held the trial Judge erred in awarding salary for the whole period to the compulsory retirement age of 55, since damages must follow the contract terms subject to mitigation, contingencies and accelerated receipt. The Court varied the salary award by increasing it 5% for probable increments and discounting 3% for accelerated payment, a net 2% increase. It set aside the awards for telephone facilities, annual leave, insurance cover and travelling warrants as non-remunerative facilitation payments, but preserved the housing allowance component as remunerative since it was factored into pension computation. Pension loss was to be computed as the difference between what the respondent would have received on normal retirement and what he was paid, with the Deputy Registrar to work out the exact sum with the parties. The appeal succeeded in part and each party was ordered to bear its own costs.

Key legal issues

#
01

Breach of statutory hearing requirement in retirement

Holding

The appellant flagrantly ignored Staff Regulation B.11, which requires that an employee be advised that compulsory retirement is under consideration and invited to make representations; the retirement was therefore wrongful despite payment of notice salary and pension.

Reasoning

The retirement letter quoted regulation 6(1) of the Pensions Regulations but made no reference to Regulation B.11(a), which restricts retirement of pensionable employees in Grade PA4 and above by requiring notice and an opportunity for representations. The hearing requirement was entrenched not in the contract but in a Statutory Regulation, and the Authority ignored it, meaning the respondent was not heard before the decision.

p. 5
02

Measure of damages for facilitation allowances

Holding

Allowances such as transport, telephone and travelling warrants are facilitation payments, not remunerative, and are not recoverable after employment ceases unless the contract treats them as remunerative.

Reasoning

The court reasoned that facilitation payments exist to enable an officer to perform work more efficiently; once the officer is not working there is no basis for them. House allowance was treated differently because the appellant's own witness confirmed it was taken into account in computing pension, making it remunerative. No evidence was adduced that the other allowances were remunerative in nature.

p. 4
03

Damages for loss of future salary to compulsory retirement age

Holding

The trial court erred in awarding salary to age 55 outright; damages must be assessed with guidance from Southern Highlands Tobacco v McQueen, taking account of mitigation, contingencies and accelerated receipt.

Reasoning

Following the East African Court of Appeal in Southern Highlands Tobacco v McQueen, as approved in East African Airways v Knight, the wrongfully dismissed employee is compensated for financial loss subject to mitigation, and the court must account for contingencies such as accelerated receipt. The court increased the salary award by 5% for probable increments and discounted it by 3% for accelerated payment, netting a 2% increase.

p. 5
04

Pension entitlement on wrongful retirement

Holding

The respondent is entitled to the difference between the pension he should have been paid had he retired normally and what he actually received, to be computed by the Deputy Registrar.

Reasoning

Because the respondent had not elected to retire when terminated, the breach deprived him of an opportunity to persuade the Board. The proper computation is the pension attributable to the months he would have worked until age 55 less what he was paid; the Deputy Registrar is to work out the exact sum with the parties since the court lacked the figures.

p. 5

Legal principles established

#
  • Facilitation allowances (transport, telephone, insurance, travelling warrants) not shown to be remunerative are not recoverable as damages for wrongful termination because they are paid to enable an officer to perform work.
  • Where a statutory regulation entrenches the right to a hearing before retirement, breach of it makes the termination wrongful and attracts damages beyond mere contract notice payments; special protection attaches to employees who have attained voluntary retirement age.
  • Even where termination of employment is wrongful, what flows from breach of conditions of service is damages according to the terms of the contract, subject to mitigation, contingencies and discount for accelerated receipt.
  • Pension loss on wrongful retirement is computed as the difference between what the employee would have received on normal retirement at the compulsory retirement age and what was actually paid.

Court orders

#
  1. 1.Allowances for telephone facilities, annual leave, insurance cover and travelling warrants set aside
  2. 2.Award on loss of salary varied: increased by a conservative 5% for probable increments and discounted by 3% for accelerated payment, net increase of two per cent
  3. 3.Pension loss to be computed as the difference between what the respondent would have received on normal retirement at 55 and what he was paid, with the Deputy Registrar of the superior court, with the assistance of the parties, to work out the exact sum
  4. 4.Each party to bear own costs in the appeal
On appeal from
High Court of Kenya at Mombasa
H.C.C.C. No. 654 of 1995
Jurisdiction invoked
First appellate jurisdiction under the Constitution and the Civil Procedure Act (appeal from the High Court); no specific provision quoted in the judgment.

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (17)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "KENYA PORTS AUTHORITY v SILAS OBENGELE [2008] KECA 103 (KLR)", Case Analysis (2008). Civil Appeal 38 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/103/eng@2008-07-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.