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Court of AppealPartially AllowedCivil Appeal No. 236 of 2012· [2014] KECA 107 (KLR)

Kenya Ports Authority v Industrial Court of Kenya & 2 others [2014] KECA 107 (KLR)

Court of Appeal
31 July 2014
PWP. N. WakiPKP. O. KiageKMK. Murgor
4,498 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that pension disputes are outside the Industrial Court's powers, so employers face pension claims through the Retirement Benefits Authority, not labour courts.

What this practically means

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Executive summary

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This Court of Appeal judgment (Waki, Kiage and Murgor, JJ.A) allowed the Kenya Ports Authority's appeal against Korir, J's refusal of judicial review certiorari to quash part of an Industrial Court award of 5th April 2007 in Industrial Cause No. 52 of 2007, which had ordered crediting or refunding pension contributions deducted between January 1999 and June 2001 and enforcement of the contributory KPA Pension Scheme. The Court framed three issues: the Industrial Court's jurisdiction over pension disputes, the irrationality and enforceability of the award, and the effect of the High Court's four-year delay in delivering its ruling. On jurisdiction, the Court held that pension disputes fall outside the statutory definition of a trade dispute under the Trade Disputes Act, so the Industrial Court acted in excess of jurisdiction; the KPA Pension Scheme existed from 1st January 1999 by Gazette Notice No. 35, and its delayed registration was covered by the transitional provisions of section 57 of the Retirement Benefits Act, so the RBA regime governed. On irrationality, applying Wednesbury principles, the Court found the reversion order unenforceable because it should have been directed at the Minister, offended separation of powers, and breached natural justice against the Pension Scheme as a separate legal entity; refunds from scheme funds were an illegality under the RBA. The four-year delay was found inordinate. The Court set aside the High Court ruling, allowed the Notice of Motion of 19th December 2007, and awarded the appellant the costs of the appeal, with costs of the motion to the respondents therein.

Key legal issues

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01

Whether the Industrial Court had jurisdiction over pension contribution disputes

Holding

It did not; pension disputes fall outside the statutory definition of a trade dispute, and the Industrial Court acted in excess of jurisdiction.

Reasoning

The Trade Disputes Act defined trade disputes by reference to dismissal, suspension, redundancy, allocation of work and recognition agreements; pension disputes are not included. The dispute concerned pension contributions deducted under the KPA Pension Scheme established by Gazette Notice No. 35 of 1999 and governed by the RBA. The scheme's delay in registration was covered by transitional provisions in section 57 of the RBA, so the RBA regime applied. Certiorari should have issued to quash the award for excess of jurisdiction.

p. 4
02

Whether the Industrial Court's award was irrational, untenable and incapable of implementation

Holding

Yes. Orders reverting to the non-contributory scheme and refunding deductions were directed at the wrong party and violated natural justice and the RBA.

Reasoning

The reversion order should have been made against the Minister who established the scheme, not the appellant, and was unenforceable against the appellant; it also offended separation of powers. The KPA Pension Scheme was a body corporate separate from the appellant and was not heard before orders were made over its funds, breaching the rule that no person shall be condemned unheard. Refunds from scheme funds were illegal since the RBA limits payments to beneficiaries upon retirement, death or termination.

p. 7
03

Whether the four-year delay in delivering the High Court ruling was prejudicial and rendered it unconstitutional

Holding

The delay of four years without explanation was inordinate, following the principles in Manchester Outfitters and Elizabeth Barganza.

Reasoning

Citing its own precedent that a 15-month delay was too inordinate and undermined the credibility of a judgment, the Court held that a four-year unexplained delay was inordinate. However, the appeal was allowed on the jurisdictional and irrationality grounds; the delay issue was treated as an additional infirmity rather than the sole basis for allowing the appeal.

p. 8

Legal principles established

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  • Pension disputes are not trade disputes within the Trade Disputes Act, and the Industrial Court lacks jurisdiction over them; such disputes fall to the Retirement Benefits Authority regime.
  • A delay in registering a retirement benefits scheme during the transitional period under section 57 of the RBA does not mean no scheme existed or that pension deductions could not be effected.
  • A court or tribunal may not make orders against a non-party nor against scheme funds belonging to a separate legal entity that was not heard.

Court orders

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  1. 1.Appeal allowed
  2. 2.Order of the High Court dated 21st February 2012 set aside
  3. 3.Substitution therefor of an order allowing the Notice of Motion filed on 19th December 2007, with costs to the respondents in that motion
  4. 4.Appellant to have the costs of this appeal
On appeal from
High Court of Kenya at Nairobi
H.C. Misc. Civil Appl. No. 995 of 2007
Jurisdiction invoked
Appeal from a High Court judicial review ruling under the repealed Constitution and Trade Disputes Act; no specific appellate provision stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (10)

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

Cite this brief

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Cite this brief

Caselaw, "Kenya Ports Authority v Industrial Court of Kenya & 2 others [2014] KECA 107 (KLR)", Case Analysis (2014). Civil Appeal No. 236 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/107/eng@2014-07-31

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