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Court of AppealPartially AllowedCivil Appeal No. 252 of 2014· [2017] KECA 200 (KLR)

Patrick Nyakundi v Kenya National Union of Teachers (KNUT Headquaters) & another [2017] KECA 200 (KLR)

Court of Appeal
10 November 2017
4,379 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal awarded a former KNUT employee nearly Kshs. 1 million in terminal dues, but held that accepting reduced salary voluntarily bars later claims for the difference.

What this practically means

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Executive summary

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The appellant, an Executive Officer employed by KNUT Kisii Branch since 1978, was served with a redundancy notice dated 6th January 1998. Before the notice expired, he negotiated and signed a letter of 27th March 1998 revising his salary downwards by approximately 50%, and continued in employment until compulsory retirement on 31st December 2001. He sued claiming various terminal dues, and the Industrial Court (Nzioki Wa Makau, J) found in a judgment dated 23rd June 2014 that he had accepted the new terms and was entitled only to Kshs. 93,294.35 in gratuity. On appeal, the Court of Appeal held that the redundancy was averted and never took effect, and that the appellant did not enter a new contract but continued under the existing contract on revised terms. His duress allegation failed for want of proof, making him estopped from claiming underpayment. The limitation objection raised by the respondents failed because limitation was never specifically pleaded as required by Order 2 rule 4 of the Civil Procedure Rules, and in any event the cause of action arose on retirement in 2001, within six years of the 2006 suit. The court awarded unpaid leave for 1993-1996, unpaid salary for January-March 1998, salary arrears, five months' salary in lieu of the short retirement notice, unpaid service gratuity, and staff terminal benefits, but refused the claims for underpayment and headquarters gratuity. The appeal partially succeeded; each party was ordered to bear their own costs in both courts.

Key legal issues

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01

Whether the appellant was declared redundant in 1998

Holding

The redundancy notice was revoked when the appellant signed the revised employment letter of 27th March 1998; the redundancy was averted and never took effect.

Reasoning

The court found the redundancy notice of 6th January 1998 specified a notice period expiring 31st March 1998, but before its expiry the parties negotiated and the appellant signed a letter revising his terms on 27th March 1998. The impending redundancy was thereby overtaken. The trial court's finding that the letter was deemed revoked was correct. Consequently no termination by redundancy occurred.

p. 5
02

Whether the appellant entered into a new contract of employment

Holding

The appellant did not enter a new contract; he exercised the option to continue in employment under the existing contract on revised terms.

Reasoning

The letter of 27th March 1998 acknowledged the appellant's continued employment with the Union on a reduced salary. The court characterized it not as a fresh contract but as a revision of the existing contract's terms. The appellant's claim that he signed under duress failed for want of proof; the contract was revised voluntarily of his own free will.

p. 5
03

Whether the claim was time barred under the Limitation of Actions Act

Holding

The suit, filed in 2006, was within the six-year limitation period because the cause of action arose on retirement on 31st December 2001, not on the averted 1998 redundancy.

Reasoning

The court held that limitation was not specifically pleaded in the respondents' defence as required by Order 2 rule 4 of the Civil Procedure Rules, but was raised only in submissions, and was an afterthought since the respondents' case was that no redundancy occurred. In any event, since the appellant remained in continuous employment until retirement on 31st December 2001, only five years had elapsed when suit was filed in 2006.

p. 7
04

Whether the appellant was entitled to the various heads of claim

Holding

The appellant was awarded unpaid leave for 1993-1996, unpaid salary for January-March 1998, salary arrears, five months' salary in lieu of short retirement notice, unpaid service gratuity and staff terminal benefits, but his claims for underpayment and headquarters gratuity failed.

Reasoning

Claims uncontroverted by evidence from the respondents succeeded: the leave claim, unpaid salaries, and salary increments under the circular. The retirement notice of one month contravened the circular requiring six months' notice, entitling the appellant to five months' salary in lieu. Service gratuity was awarded on the appellant's unrebutted computation. Headquarters gratuity and underpayment failed for lack of evidential basis and estoppel respectively.

p. 9

Legal principles established

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  • A first appellate court must re-evaluate the evidence and draw its own conclusions, while making allowance for the fact that it did not see or hear the witnesses
  • Statutory limitation must be specifically pleaded in a defence or reply to counterclaim; a court cannot act on an unpleaded limitation defence
  • In the absence of fraud, duress, undue influence or mistake, courts will enforce a bargain freely entered into even if one-sided or harsh

Court orders

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  1. 1.The 1st respondent to pay the appellant a total sum of Kshs. 985,626.91, being unpaid salary for January, February and March 1998 (Kshs. 27,167/-), unpaid leave for 1993-1996 (Kshs. 285,487.86), salary arrears January–March 1998 (Kshs. 104,552.85), unpaid service gratuity (Kshs. 271,879.20), five months salary in lieu of retirement notice (Kshs. 134,795/-), and unpaid staff terminal benefits (Kshs. 161,745/-)
  2. 2.Each party to bear their own costs both in the Industrial Court and in this Court

Authorities

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Legislation

  • Labour Relations Act
  • Employment Actsection 40
  • Limitation of Actions Actsection 4(1)(a)
  • Civil Procedure RulesOrder 2 rule 4

Cases cited (8)

  • David Wanjau Muhoro vs Ol Pejeta Ranching Ltd
    Nairobi Industrial Cause No. 1813 of 2013
  • Attorney General vs Andrew Maina Githinji
    [2016] eKLR
  • Eveready Batteries (K) Limited Vs. Simon Kinyua
    Civil Appeal No. 281 of 2004
  • Selle V. Associated Motor Boat Company
    [1968] E.A. 123
  • Jivanji vs. Sanyo Electrical Company Ltd
    [2003] KLR 425
  • Behange vs School Outfitters (U) Ltd
    2000 1 EA 20
  • Achola & Another vs Hongo & Another
    LLR No. 4007 [CAK]
  • Abdullahi Ibrahim Ahmed (Suing as The Personal Representative of The Estate Of Anisa Sheikh Hassan (Deceased)) vs Lem Lem Teklue Muzolo
    [2013] eKLR
On appeal from
Industrial Court of Kenya at Nairobi
Industrial Cause No. 1902 of 2011
Jurisdiction invoked
First appeal to the Court of Appeal from the Industrial Court (now Employment and Labour Relations Court)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Patrick Nyakundi v Kenya National Union of Teachers (KNUT Headquaters) & another [2017] KECA 200 (KLR)", Case Analysis (2017). Civil Appeal No. 252 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/200/eng@2017-11-10

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