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Court of AppealPartially AllowedCivil Appeal No. 16 of 2016· [2017] KECA 25 (KLR)

Kenya Ports Authority v Andrew Ochieng Odongo [2017] KECA 25 (KLR)

Court of Appeal
25 May 2017
ASAsike-MakhandiaWilliam OukoOukoM'M'Inoti
3,425 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

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Kenya's Court of Appeal confirmed KPA unlawfully fired its employee but struck down the judge's order converting the dismissal into early retirement with full pension benefits.

What this practically means

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Executive summary

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The respondent, a Kenya Ports Authority employee of 19 years, was summarily dismissed in March 2006 over alleged fraudulent payments, then reinstated on interdiction with a show cause letter posted long after his dismissal and after he had filed suit. For failing to report to work for over ten days, his appointment was forfeited in January 2007 under section G.14(a) of the Staff Regulations. The Employment and Labour Relations Court (Makau, J.) held the termination unlawful, awarded three months' salary in lieu of notice (Kshs.194,685), and in view of the circumstances converted the forfeiture into early retirement with full benefits including pension, while declining general damages. The Authority appealed, contending the Judge lacked jurisdiction over retirement benefits and that the termination was lawful. The Court of Appeal affirmed the finding of unlawful termination: the show cause letter took nearly a month to reach the respondent, making compliance impracticable, and the second dismissal side-stepped the disciplinary procedure under the Staff Regulations. The Court held the dispute was governed by the repealed Employment Act and Trade Disputes Act, applying the Supreme Court's non-retrospectivity principle; under those statutes the only remedy was salary in lieu of notice. It set aside the conversion of the forfeiture into early retirement, holding no law supported that course, though the respondent remained entitled to pension benefits under his retirement scheme. The appeal succeeded only on that point and was otherwise dismissed with costs to the respondent.

Key legal issues

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01

Whether the forfeiture of the respondent's appointment was lawful

Holding

The forfeiture was wrongful and unlawful. The show cause letter was posted on 19th September 2006, long after the summary dismissal and after suit was filed, making compliance impracticable, and the second dismissal bypassed the disciplinary procedure under the Revised Staff Regulations that had been followed in the first instance.

Reasoning

The court found it illogical to demand compliance with an interdiction and a show cause letter served after the summary dismissal and after suit had been filed; there was a plausible explanation for the respondent's absence. Further, the procedure under the Staff Regulations requiring a committee of inquiry and Board decision was ignored when the appellant purported to dismiss by forfeiture. The allegations of fraud remained mere allegations never rebutted.

p. 3
02

Whether the Judge had jurisdiction to order early retirement with full benefits including pension

Holding

The Judge erred. The dispute was governed by the repealed Employment Act and Trade Disputes Act, under which the only remedies were payment in lieu of notice and, under the Trade Disputes Act, reinstatement or compensation not exceeding twelve months' wages. Converting forfeiture into early retirement had no legal basis.

Reasoning

The Labour Relations Act transitional provisions confirmed pre-2007 disputes are governed by the repealed statutes. Under section 16 of the repealed Employment Act the remedy was salary in lieu of notice. The respondent was a member of a pension scheme and, his employment having been irregularly terminated, he would be entitled to pension benefits per the scheme, but the court could not itself convert the dismissal into early retirement.

p. 4
03

The applicable law given the timing of the dispute

Holding

The dispute, having arisen in 2006 before the Employment Act, 2007 and the Employment and Labour Relations Court Act, 2011 came into force, was governed by the repealed Employment Act and the repealed Trade Disputes Act, as labour laws are not applied retrospectively.

Reasoning

Applying the Supreme Court's statement of the non-retrospectivity principle, the court found no express intention in the Employment Act, 2007 or the ELRC Act, 2011 for retrospective application, and the Fifth Schedule paragraph 2(4) of the Labour Relations Act expressly preserved the repealed Trade Disputes Act for pre-commencement disputes.

p. 2

Legal principles established

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  • Statutes are prima facie prospective; retrospective effect requires express words or necessary implication, so employment disputes arising before the Employment Act, 2007 are governed by the repealed Employment Act
  • Under the repealed Employment Act, the remedy for wrongful termination was payment of salary in lieu of notice; courts could not award general damages or substitute other remedies for the dismissal
  • A court has no jurisdiction to convert a forfeiture of employment into early retirement; an employee unlawfully terminated is entitled only to remedies provided by the law applicable at the time, and pension benefits only in accordance with the terms of the retirement scheme
  • An employer that fails to comply with its own internal disciplinary procedure, including proper service of a show cause letter, cannot lawfully forfeit an employee's appointment

Court orders

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  1. 1.The finding that the forfeiture of appointment was wrongful and unlawful was upheld
  2. 2.The order converting the forfeiture of employment to early retirement with full benefits including pension was set aside as unsupported by law
  3. 3.The award of Kshs.194,685 being three months' salary in lieu of notice was upheld
  4. 4.The appeal was otherwise dismissed with costs to the respondent

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)
  • Employment Act (repealed)Section 16
  • Employment ActSection 49(3)(a)
  • Employment ActSections 49(1) and (3)
  • Trade Disputes Act (repealed)Section 15
  • Labour Relations ActFifth Schedule, paragraph 2(4)
  • Employment and Labour Relations Court Act, 2011
  • Kenya Ports Authority Staff Regulations Revised, 2002Sections G.7(a) and G.14(a)

Cases cited (2)

  • Samuel Kamau Macharia & Another v. Kenya Commercial Bank Limited & 2 Others
    Civil Application No. 2 of 2011
  • Rift Valley Textile Limited v. Ogada
    (1992) LLR 308 (CAK)
On appeal from
Employment and Labour Relations Court at Mombasa
E&LR Cause No. 422 of 2014
Jurisdiction invoked
First appellate jurisdiction under the Constitution and the Employment and Labour Relations Court Act, 2011 (the suit originally instituted in the High Court in 2006)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kenya Ports Authority v Andrew Ochieng Odongo [2017] KECA 25 (KLR)", Case Analysis (2017). Civil Appeal No. 16 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/25/eng@2017-05-25

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