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Court of AppealDismissedCivil Appeal No 316 of 2013· [2020] KECA 840 (KLR)

Marete v Teachers Service Commission (Civil Appeal 316 of 2013) [2020] KECA 840 (KLR)

Court of Appeal
6 March 2020
RNR. NambuyeDMD. MusingaJMJ. Mohammed
4,272 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that unfairly terminated employees get statutory compensation capped at twelve months' salary, not future earnings until retirement age.

What this practically means

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Executive summary

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The appellant, a Senior Principal Legal Officer employed by the Teachers Service Commission from November 2003 to February 2009, was retired in the public interest with immediate effect. The Industrial Court (Rika, J.) found that retirement in the public interest is a form of involuntary termination governed by the Employment Act, and that the respondent had not justified the retirement, rendering the termination unfair under Sections 43 and 45. The trial court awarded compensation of twelve months' gross salary under Section 49, plus travel and accommodation and two days' salary, but dismissed the claims for anticipatory salaries and allowances of about Kshs 26 million and for general, punitive, exemplary and aggravated damages, and ordered no costs. On appeal, the Court of Appeal re-evaluated the evidence as a first appeal and framed two issues: entitlement to anticipatory remuneration to age 60, and entitlement to general, punitive, exemplary and aggravated damages. The Court affirmed the trial court's exercise of discretion. Relying on Elizabeth Wakanyi Kibe v Telkom Kenya and Engineer Francis N. Gachuri v Energy Regulatory Commission, it held that no employment is permanent and there is no provision for damages to the date of retirement, so the anticipatory benefits claim was not anchored in law. On damages, it held that the twelve-month compensatory award was the statutory maximum, that the appellant failed to lay a basis for general damages, and that the Rookes v Barnard categories for exemplary damages were not satisfied, since the dispute was a purely employment matter and the respondent's conduct was not arbitrary or oppressive, the appellant having secured judicial appointment shortly after termination. The appeal was dismissed with no order as to costs, each party bearing its own costs.

Key legal issues

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01

Entitlement to anticipatory remuneration until mandatory retirement age

Holding

A claim for anticipatory salaries and benefits for the unexpired term of employment is not anchored in law; permanent and pensionable terms do not guarantee employment to retirement age

Reasoning

Relying on Elizabeth Wakanyi Kibe v Telkom Kenya and Engineer Francis N. Gachuri v Energy Regulatory Commission, the Court held that employment, like any other contract, provides for exit, and that damages for termination are limited to compensation for unprocedural or unjustified termination, not lost future earnings to age 60. Section 49(f) and 49(g) factors, including mitigation, are the relevant considerations.

p. 4
02

Entitlement to general damages for breach of contract over and above the statutory compensation

Holding

General damages are unavailable where the employee has already received the statutory compensatory award for unfair termination under Section 49 of the Employment Act

Reasoning

The Court found the appellant had been granted his alternative prayer of compensation for unfair termination at twelve months' gross salary, the maximum under the Act, and had failed to lay a basis for further compensation. Section 49 affords a fair, adequate and reasonable remedy; no special circumstances warranted an additional award.

p. 5
03

Entitlement to exemplary and aggravated damages for allegedly arbitrary and oppressive conduct by a public employer

Holding

The Rookes v Barnard categories were not satisfied; the dispute arose from an ordinary employment relationship and the respondent's conduct was not so arbitrary or oppressive as to justify exemplary damages

Reasoning

Although the respondent is a public body and agent of Government, the dispute is purely an employment relationship governed by the Employment Act. The Court, guided by Godfrey Julius Ndumba Mbogori v Nairobi City County and Obonyo v Municipal Council of Kisumu, found the Rookes v Barnard categories not made out, and noted the appellant's swift re-employment as a mitigating factor under Sections 49(f) and (g).

p. 5
04

Standard of appellate interference with the trial court's exercise of discretion on quantum of remedy

Holding

An appellate court will not interfere with the exercise of judicial discretion unless the judge misdirected himself, arrived at a wrong decision, or was clearly wrong and occasioned injustice

Reasoning

The Court adopted the statement in Kenya Revenue Authority v Darasa Investments Limited, and reinforced the principle with Kenfreight (E.A.) Limited v Benson K. Nguti, holding that compensation for unfair termination is discretionary and must be exercised judiciously, and that the appellant failed to demonstrate grounds for disturbing the trial court's award.

p. 3

Legal principles established

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  • Remedies for unfair termination are those provided under Section 49 of the Employment Act 2007, capped at twelve months' gross salary; anticipatory earnings to retirement age are not payable as damages because no employment is permanent
  • Exemplary damages may only be awarded in the categories set out in Rookes v Barnard, and an award of compensation for unfair termination is an exercise of judicial discretion that an appellate court will not disturb absent misdirection or injustice
  • On a first appeal, the Court of Appeal re-evaluates, re-assesses and re-analyses the evidence and draws its own conclusions, while making due allowance for not having seen or heard the witnesses

Court orders

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  1. 1.Appeal dismissed
  2. 2.Each party to bear its own costs

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 45
  • Employment ActSection 49, including 49(1)(c), 49(f), 49(g)
  • Employment ActSection 50
  • Labour Relations Act (South Africa)Sections 193 and 194
  • Constitution of KenyaArticle 159
  • Employment and Labour Relations Court legislationSection 12(3)(vi) and (vii)

Cases cited (10)

  • Kenya Ports Authority vs. Kuston (Kenya) Limited
    [2009] 2 EA 212
  • Kenya Revenue Authority & 2 others v Darasa Investments Limited
    [2018] eKLR (Civil Appeal No. 24 of 2018)
  • Hema Hospital v Wilson Makongo Marwa
    [2015] eKLR (Kisumu Civil Appeal No 72 of 2014)
  • Le Monde Luggage cc t/a Pakwells Petze vs. Commissioner G. Dun and others, Appeal Case No. JA 65/205
  • Elizabeth Wakanyi Kibe v Telkom Kenya Ltd
    [2014] eKLR (Civil Appeal No. 25A of 2013)
  • Engineer Francis N. Gachuri v Energy Regulatory Commission
    [2013] eKLR (Industrial Cause No. 203 of 2011)
  • Obonyo & Another v Municipal Council of Kisumu
    [1971] EA 91
  • Rookes v Barnard and Others
    [1964] AC 1129
  • Godfrey Julius Ndumba Mbogori & another V. Nairobi City County
    [2018] eKLR
  • Kenfreight (E.A.) Limited v Benson K. Nguti
    [2016] eKLR (Civil Appeal 31 of 2015)
On appeal from
Industrial Court at Nairobi (now Employment and Labour Relations Court)
Industrial Cause No 379 (N) of 2009
Jurisdiction invoked
First appeal to the Court of Appeal under its appellate jurisdiction (the judgment does not cite the specific constitutional/statutory provision)

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, "Marete v Teachers Service Commission (Civil Appeal 316 of 2013) [2020] KECA 840 (KLR)", Case Analysis (2020). Civil Appeal No 316 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/840/eng@2020-03-06

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