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Court of AppealPartially AllowedCivil Appeal Nos. 325 & 342 of 2018 (consolidated)

The German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA 894 (KLR)

Court of Appeal
24 July 2023
12,747 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal cut a German School employee's awards by over half, confirming redundancy pay requires consultation but rejecting pension discrimination and speculative back pay claims.

What this practically means

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Executive summary

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The Court of Appeal (Okwengu, Omondi and Mativo JJA) determined two consolidated first appeals against the judgment of Wasilwa J of the ELRC (delivered 17 January 2017 and reviewed on 4 October 2017) in an employment dispute between The German School Society and Helga Ohany, a former chief accountant terminated on grounds of redundancy in 2014. The Court held that the claims for underpayment, back pay and loss of benefits were not time barred under section 90 of the Employment Act because they constituted a continuing wrong that crystallised upon termination, drawing on Indian Supreme Court jurisprudence. It distinguished the Supreme Court's decision in Albert Chaurembo Mumba, holding that the ELRC had jurisdiction since the respondent was never a member of the pension scheme. The Court found the trial judge erred in holding that the existence of the pension scheme was never brought to the respondent's attention; the discrimination award therefore collapsed. On redundancy, the Court held that the 12 June 2014 notice satisfied section 40(1)(a) and (b) but the termination was unfair for want of consultations implied in section 40, read with ILO Convention No. 158, Article 47 of the Constitution and the Fair Administrative Action Act. The 12 months' compensation was reduced to 6 months' gross pay (Kshs. 2,972,670/=). The back pay award of Kshs. 4,975,360/= was set aside as unpleaded and speculative. The cross-appeal on pension and interest failed, the latter having been constructively abandoned. Both appeals partially succeeded; each party was ordered to bear its own costs of the appeals.

Key legal issues

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01

Limitation under section 90 of the Employment Act - continuing injury

Holding

The claims for underpayment, back pay and loss of benefits constituted a continuing wrong within section 90, so the suit filed after termination was in time.

Reasoning

Drawing on Indian Supreme Court authority, the court distinguished a continuing wrong (a single wrongful act creating a continuing source of injury, such as recurring underpayment each month) from recurring wrongs and from the mere continuing effect of a completed wrong. Because the respondent continued to work under unequal pay, the breach was continuing and crystallised on termination; the claim filed in December 2014, after termination in July 2014, was within the limitation period.

p. 10
02

Jurisdiction of the ELRC over pension eligibility disputes

Holding

The ELRC had jurisdiction; the Supreme Court decision in Albert Chaurembo Mumba was distinguishable because the respondent was never a member of the scheme under the Retirement Benefits Act.

Reasoning

Article 163(7) binds all courts to Supreme Court decisions, but a case is only authority for what it decides. Mumba involved members of a retirement benefits scheme governed by the Retirement Benefits Act; here the respondent was not yet a member and her complaint was denial of the opportunity to join. Material differences in facts, including ineligibility by age, distinguished the precedent, and ELRC jurisdiction flows from Article 162(2)(b) of the Constitution.

p. 11
03

Whether the trial court erred in finding the pension scheme's existence was never brought to the respondent's attention, and the discrimination claim

Holding

The finding was against the evidence; the respondent knew of the scheme and never applied in time, so the discrimination award collapsed.

Reasoning

The respondent's own admissions in cross-examination showed she knew of the scheme, that her window to join lapsed in 1997, that she was a trustee and knew joining was voluntary, and that by 2014 she was over 55 and ineligible. Her letter of 12 May 2014 complained of denial of membership, not lack of knowledge of the scheme. The damages for discrimination, being premised on the contrary finding, could not stand.

p. 12
04

Lawfulness of the redundancy

Holding

The notice dated 12 June 2014 met the notification requirements of section 40(1)(a) and (b), but the termination was unfair for want of consultations, which are implied in section 40.

Reasoning

The court adopted Kenya Airways v Aviation & Allied Workers Union: consultation is implicit in the Employment Act, supported by ILO Convention No. 158 and Article 47 of the Constitution and the Fair Administrative Action Act. Although the letter contained the reasons for and extent of the intended redundancy, there was no evidence of any consultations of the kind envisaged, so the trial judge's finding of unfair termination on procedural grounds was upheld.

p. 17
05

Quantum of compensation for unfair termination

Holding

The maximum award of 12 months' salary was excessive; 6 months' gross pay (Kshs. 2,972,670/=) sufficed under sections 49(1)(c) and 49(4) of the Employment Act.

Reasoning

The court must exercise discretion judicially, considering the statutory factors including length of service, expectations of continued employment, prospects of comparable employment, severance already paid and the circumstances of termination. Weighing factors (a), (e), (f), (g), (h) and (m), and noting the respondent had already received notice pay, severance at 15 days per year and accrued leave, 12 months was excessive and 6 months was appropriate.

p. 18
06

Sustainability of the back pay award of Kshs. 4,975,360/= made on review

Holding

The award was set aside: the claim was not specifically pleaded, the period covered was not pleaded or proved, and the award rested on speculation that the respondent could have worked to 2015.

Reasoning

Pleadings set the bounds of a case; evidence cannot cure a plea never made. The statement of claim sought €43,264.55 from 2008 'onwards', an imprecise prayer, while the reviewed award covered 2003 to September 2007, a period neither pleaded nor in evidence. An error of that magnitude is not an error on the face of the record justifying review, and the defence was wrongly dismissed as a mere denial.

p. 22

Legal principles established

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  • A claim premised on a continuing injury under section 90 of the Employment Act must be filed within 12 months after cessation of the injury; underpayments during a subsisting employment contract constitute a continuing wrong
  • A case is binding only for what it actually decides; a precedent is distinguishable where the facts materially differ
  • Consultation between employer and employee is an implied requirement of the redundancy process under section 40(1)(a) and (b) of the Employment Act
  • No amount of evidence can be looked into on a plea never made in the pleadings; a court cannot grant relief not claimed or flow from facts not pleaded
  • An award based on an assumption of future employment is premised on speculation and cannot stand

Court orders

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  1. 1.The award for damages for discriminatory practice in the sum of Kshs. 5,945,340/= is set aside
  2. 2.The damages for unlawful redundancy awarded in the sum of Kshs. 5,945,340/= are reduced and substituted with an award of Kshs. 2,972,670/=
  3. 3.The award of Kshs. 4,975,360/= for back pay (difference between pay earned between 2003 and September 2007) is set aside
  4. 4.The award for unlawful redundancy shall attract interest at the rate of 6% from the date of the judgment of the High Court
  5. 5.Each party shall bear its own costs of these consolidated appeals
On appeal from
Employment and Labour Relations Court at Nairobi
ELRC Cause No. 2197 of 2014
Jurisdiction invoked
First appellate jurisdiction under the Employment and Labour Relations Court Act / Article 164 of the Constitution (first appeal against ELRC judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "The German School Society & another v Ohany & another (Civil Appeal 325 & 342 of 2018 (Consolidated)) [2023] KECA 894 (KLR)", Case Analysis (2023). Civil Appeal Nos. 325 & 342 of 2018 (consolidated). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/894/eng@2023-07-24

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