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Court of AppealDismissedCivil Appeal No. 59 of 2012· [2019] KECA 1008 (KLR)

Peter Wangai Kiama v Lawrence Gelmon & 2 others [2019] KECA 1008 (KLR)

Court of Appeal of Kenya
8 February 2019
2,297 words in judgment
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The bottom line

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The Court of Appeal threw out a Kshs. 98 million employment claim because it was filed years too late and without first following the required dispute-resolution steps.

What this practically means

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Executive summary

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The Court of Appeal (Ouko, P., Kiage and Murgor, JJ.A) dismissed this first appeal against the Industrial Court's (Mukunya, J.) dismissal of the appellant's claim of Kshs. 98,021,700 for accrued leave, salary arrears, gratuity, house allowance and terminal benefits arising from the termination of his employment with the University of Manitoba. The termination by letter dated 27 November 2002 was triggered by the appellant's decision to contest the Juja Parliamentary seat in the 2002 General Elections, which the respondents said conflicted with their obligation to remain scrupulously non-political in Kenya. The Court held the suit, filed nearly eight years after termination, was time-barred under section 90 of the Employment Act and, in any event, under the six-year contractual limitation in the Limitation of Actions Act; the time-bar issue was also res judicata having been determined in the earlier struck-out case, Industrial Case No. 751(N) of 2009. Further, under the Trade Disputes Act (repealed) the dispute ought to have been reported to the Minister for conciliation before suit; failure to exhaust this mechanism rendered the suit premature and incompetent. On the merits, the Court construed the 'five year renewable' contract as remaining a five-year contract with no guarantee of renewal, rendering the multi-million claim fanciful, and found the termination lawful, the appellant having been paid two months' salary in lieu of notice, more than his entitlement. The decision below was affirmed and the appeal dismissed with costs.

Key legal issues

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01

Time bar of the employment claim

Holding

The suit filed nearly eight years after termination was hopelessly out of time under both section 90 of the Employment Act (three years) and section 4/section 16 of the Limitation of Actions Act (six years), and the time-bar issue was res judicata having been determined in the earlier struck-out case

Reasoning

The termination occurred on 27 November 2002 and the suit was filed on 24 September 2010, nearly eight years later. Section 90 of the Employment Act bars suits after three years. Even applying the more favourable six-year contractual limitation period, the claim was out of time. An earlier dispute on the same matter, Industrial Case No. 751(N) of 2009, had been struck out as time-barred, making the issue res judicata. The suit was therefore incompetent and ought to have been struck out.

p. 3
02

Exhaustion of statutory dispute-resolution mechanisms under the Trade Disputes Act

Holding

Under the Trade Disputes Act a suit could not be filed before a report was first made to the Minister, who would appoint a conciliator; the appellant made no such report, so the suit was premature and incompetent

Reasoning

The Trade Disputes Act required a dispute to be commenced by reporting it to the Minister who would appoint a conciliator. It was common ground that no such report was made. The court rejected the appellant's argument that this was a minor procedural omission, holding that statutory pre-action mechanisms must first be exhausted and that a suit filed before exhaustion flounders for unripeness.

p. 3
03

Construction of a 'five year renewable' contract

Holding

The contract was a five-year contract with no guarantee of renewal; the claim for Kshs. 98 million based on a ten or fifteen-year assured term was fanciful

Reasoning

The court construed the term 'five year renewable' as meaning only that the parties could agree to enter into another contract for a similar term after expiry of the current term. Before any renewal happens the contract remains a five-year contract, with no warranty or guarantee of extension. The appellant's reasoning that 'a five year renewable contract means ten years' was unrealistic and could not ground the multi-million claim.

p. 3
04

Lawfulness of the termination

Holding

The termination was lawful; the appellant was paid two months' salary in lieu of notice, more than he was entitled to, and his pursuit of elective politics justified the respondents' action

Reasoning

The respondents' regulations and their agreements obliged them to remain scrupulously non-political in their work in Kenya. The appellant's decision to run for the Juja Parliamentary seat created a conflict of interest, leaving the respondents no choice but to terminate. He was paid two months' salary in lieu of notice, which exceeded his entitlement, so nothing unlawful attended the termination.

p. 3

Legal principles established

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  • A suit under section 90 of the Employment Act cannot be brought after three years have lapsed from the events giving rise to the dispute; under the general law of contract the six-year limitation in the Limitation of Actions Act applies
  • Where statutory mechanisms and procedures are in place for pre-action settlement of disputes, those mechanisms must first be exhausted; a suit filed before such exhaustion is premature and incompetent
  • A 'five year renewable' contract is a five-year contract with no warranty or guarantee of renewal; renewal requires fresh agreement of the parties
  • On a first appeal the court re-evaluates the evidence afresh but is slow to interfere with the trial judge's conclusions unless they are based on no evidence, proceed from a misapprehension of the evidence, or are plainly wrong

Court orders

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  1. 1.The appeal is dismissed with costs to the respondents

Authorities

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Legislation

  • Limitation of Actions Actsection 4
  • Limitation of Actions Actsection 16
  • Employment Actsection 90
  • Employment Actsection 16
  • Trade Disputes Act (repealed)section 7
  • Labour Institutions Act, 2007transitional provisions
  • Court of Appeal RulesRule 29

Cases cited (2)

  • PETERS vs. SUNDAY TIMES
    [1958] EA 424
  • SELLE vs. ASSOCIATED MOTOR BOAT CO.
    [1968] EA 123
On appeal from
Industrial Court of Kenya at Nairobi
Industrial Cause No. 1170 of 2010
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules from the Industrial Court of Kenya

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Peter Wangai Kiama v Lawrence Gelmon & 2 others [2019] KECA 1008 (KLR)", Case Analysis (2019). Civil Appeal No. 59 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/1008/eng@2019-02-08

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