Telkom Kenya Limited v Ngokonyo & 2 others (Civil Appeal 394 of 2017) [2024] KECA 880 (KLR)
The bottom line
#Kenya's Court of Appeal threw out huge termination payouts to three ex-Telkom workers, ruling courts can't award future salaries to retirement age or decide pension sums.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction over pension computations
Both the High Court and the Court of Appeal lack jurisdiction to determine pension computations at first instance; the statutory review mechanism under section 46(1) of the Retirement Benefits Act is the first port of call.
Computation of pension is a matter left to professionals. The Retirement Benefits Act provides a review mechanism through the Chief Executive Officer of the scheme. Relying on the Supreme Court's decision in Albert Chaurembo Mumba, once an employee becomes a pensioner the relationship is trustee-beneficiary, not employer-employee, and the ELRC has no jurisdiction over such disputes. The statutory forum must be approached first before court intervention.
Applicable statute - retrospectivity
The applicable law was the repealed Employment Act, Cap 226, not the Employment Act, 2007, because laws do not apply retrospectively absent express provision.
The cause of action accrued in 1991 and the suit was filed in 1992, both before the Employment Act, 2007 was enacted. Following Samuel Kamau Macharia vs Kenya Commercial Bank, statutes are prima facie prospective and retrospective effect requires express words or necessary implication. Therefore provisions such as section 49(1) of the 2007 Act could not be applied to this dispute.
Anticipatory salaries and allowances to retirement age
The award of anticipatory salaries and allowances up to retirement age was wrong in law and was set aside; such awards amount to unjust enrichment.
There is no right to work for life and no guarantee an employee works to retirement age. A blanket grant of anticipatory salaries reinstates the employee or pays for work not done. Salary is payable only for services rendered, and allowances are for serving employees. The correct measure under the repealed Act and the personnel circular was payment in lieu of notice, gratuity and pension, which the respondents admitted receiving.
Duty to mitigate
Employees wrongfully terminated have a duty to mitigate their loss and must move on rather than await anticipatory remuneration.
Applying Southern Highlands Tobacco vs McQueen and Elizabeth Wakanyi Kibe vs Telkom Kenya, the court reaffirmed that a wrongfully dismissed employee must do what he can to mitigate his loss and cannot sit back hoping to enjoy anticipatory remuneration. However, section 49(1) of the Employment Act, 2007 could not be applied retrospectively to this 1991 dispute.
Failure to consider authorities
The trial judge properly distinguished the appellant's authorities; the ground that they were ignored failed.
While a court must consider all cited authorities, a judgment need not be a transcript of submissions; it must only embody the authorities found relevant. The judge had summarized the issues, distinguished the authorities and arrived at reasoned findings, so the trial court applied its mind to the law and evidence.
Long service bonus
A long service bonus is a special damages claim that must be specifically pleaded and proved; the 1st respondent omitted it from the amended plaint and the 2nd and 3rd respondents failed to prove eligibility.
Bonus is payable on merit at the employer's discretion and is not awarded as a matter of course. The claim was pleaded in the original plaint but omitted from the amended plaint of 12th April 2006. The 2nd and 3rd respondents' names did not appear in the employer's letter of 23rd September 1991 listing staff who qualified for long service awards.
Legal principles established
#- Anticipatory salaries and allowances up to retirement age are not awardable for unlawful termination or retirement, as this amounts to unjust enrichment and paying for work not done.
- Courts lack jurisdiction to determine the computation of pension benefits, which must first go through the statutory review mechanism under the Retirement Benefits Act.
- The Employment Act, 2007 does not apply retrospectively to causes of action that accrued before its enactment.
- A court must consider all authorities cited by the parties, but a judgment need not embody every authority - only those found relevant.
- Where a statute expressly provides a mechanism for addressing a dispute, courts ought to be slow to intervene except where the statutory body refuses to perform its functions.
Court orders
#- 1.The appellant's ground contending that their submissions were disregarded is dismissed for being devoid of merits
- 2.The judgment delivered on 20th December 2013 by Havelok, J and all consequential orders is set aside and substituted with an order dismissing the respondents' suit
- 3.The respondents' notice of cross-appeal dated 23rd April 2019 is dismissed for want of merits
- 4.Each party shall bear own costs in this appeal
- On appeal from
- High Court of Kenya
- Nairobi Civil Suit No. 357 of 1992 consolidated with Civil Suit Nos. 412 of 1992 and 811 of 1992
- Jurisdiction invoked
- First appeal to the Court of Appeal against the judgment and decree of the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Telkom Kenya Limited v Ngokonyo & 2 others (Civil Appeal 394 of 2017) [2024] KECA 880 (KLR)", Case Analysis (2024). Nairobi Civil Suit No. 357 of 1992 consolidated with Civil Suit Nos. 412 of 1992 and 811 of 1992 (appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/880/eng@2024-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.