Moi University v Kenya Union of Domestic Hotels, Educational Institutions, Hospitals and Allied Workers [2016] KECA 707 (KLR)
The bottom line
#Kenya's Court of Appeal cut 24 former Moi University workers' payouts, ruling that compensation without reinstatement is capped at twelve months' wages.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Industrial Court erred in retrospectively applying the Employment Act, 2007 and the Labour Institutions Act, 2007 to a cause of action arising in 2006
- 2.Whether the Industrial Court had jurisdiction to determine the lawfulness of the termination of the workers under the Trade Disputes Act
- 3.Whether the award of full salary arrears from the date of termination breached the compensation limits in the Trade Disputes Act
- 4.Whether the Industrial Court could lawfully delegate assessment of dues to the Provincial Labour Officer
Key legal issues
#Retrospective application of the Employment Act, 2007
The Industrial Court ought to have applied the repealed Employment Act rather than the 2007 Act, since the cause of action arose in 2006, but the error did not vitiate the findings because section 15 of the Trade Disputes Act independently conferred power to inquire into wrongful dismissal
The court agreed with the appellant that the wrong statute was applied, as the events predated the 2007 legislation which came into force on 2nd June 2008. However, the misdirection was not fatal because section 15 of the Trade Disputes Act, the statute actually in force, empowered the Industrial Court to determine wrongful dismissal and order reinstatement or compensation. The award therefore did not breach any written law and the ground failed.
Award of salary arrears beyond statutory limits
The order that the workers receive full salaries and benefits from the date of termination to the date of the ruling breached section 16 of the Trade Disputes Act, which caps compensation at twelve months' monetary wages where compensation is awarded without reinstatement
Section 16 of the Trade Disputes Act allowed the Industrial Court to award compensation or reinstatement, but where compensation was awarded without reinstatement it could not exceed twelve months' monetary wages. The award of all salary arrears from termination to the ruling exceeded that cap and was in breach of the statute, so the Industrial Court ought to have reviewed it. This ground of appeal succeeded.
Delegation of assessment of dues to the Provincial Labour Officer
The order directing the Provincial Labour Officer to tabulate the employees' final dues was erroneous because assessment of damages is a judicial function that cannot be delegated to a ministerial official
Relying on Kenya Revenue Authority v Menginya Salim Murigani, the court endorsed the principle that assessment of damages is not a ministerial act and a direction to assess damages renders a judgment incomplete and a nullity. Although the Industrial Court's order was therefore wrong, it was rendered superfluous once the court set aside the underlying award of salary arrears, so no separate remedy was needed on that ground.
Scope of the appeal
The appeal was confined to matters of law only under section 27 of the Labour Institutions Act, 2007
At the time the Industrial Court was established under the Labour Institutions Act, 2007, appeals lay only on matters of law. The court therefore reminded itself to confine the appeal to questions of law, which framed the entire analysis around statutory construction of the Trade Disputes Act, the applicable employment legislation, and the legality of the orders made on review rather than any factual reassessment.
Legal principles established
#- A review may be granted only to correct a self-evident error apparent on the face of the record; an erroneous conclusion of law or misconstruction of a statute is not a ground for review
- Assessment of damages is a judicial function which cannot be delegated to a ministerial official; a judgment directing a third party to assess damages is a nullity
- Where legislation affects substantive rights, it cannot be given retrospective effect
- Under section 15 of the Trade Disputes Act, the Industrial Court could inquire into a wrongful dismissal and order reinstatement and/or compensation capped at twelve months' wages
Court orders
#- 1.The order granting the twenty four employees their full salaries and other benefits and allowances from the date of their termination to the 2nd June 2011 is set aside
- 2.The respondent shall pay to each of the twenty four employees all the statutory and contractual dues to them up until the date of their termination
- 3.The respondent shall pay to each of the twenty four employees six (6) months' salary being compensation for loss of employment
- 4.Each party shall bear its own costs in this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Industrial Court of Kenya
- Cause No. 29 of 2008
- Jurisdiction invoked
- Section 27 of the Labour Institutions Act, 2007 - appeals from the Industrial Court lie only on matters of law
Relief refused
#Reinstatement of the workers with full salary arrears from the date of termination to the date of the ruling
The award of salary arrears breached section 16 of the Trade Disputes Act, which caps compensation at twelve months' monetary wages where compensation is awarded without reinstatement
Costs
Each party shall bear its own costs in this appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The order granting the twenty four employees their full salaries and other benefits and allowances from the date of their termination to the 2nd June 2011 is hereby set aside;
The respondent shall pay to each of the twenty four employees six (6) months' salary being compensation for loss of employment;
Each party shall bear its own costs in this appeal.
Misconstruing a statute or other provision of law cannot be a ground for review.
The award requiring the appellant to pay to the workers all salary arrears is therefore in breach of those clear provisions, and therefore should have been reviewed by the court.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Moi University v Kenya Union of Domestic Hotels, Educational Institutions, Hospitals and Allied Workers [2016] KECA 707 (KLR)", Case Analysis (2016). Civil Appeal No. 202 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/707/eng@2016-03-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.