DAVID MWANGI GIOKO & 51 OTHERS V NAIROBI CITY WATER & SEWERAGE COMPANY LIMITED [2013] KEELRC 463 (KLR)
The bottom line
#Kenya's Industrial Court ruled that retiring employees at 55 after the retirement age was raised to 60 was unfair termination, awarding compensation but not full future salaries.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent was bound by the Muthaura Circular raising the retirement age to 60
Yes; as a governmental agency and instrumentality of the Local Authority, the Respondent was a public body covered by the Circular and ought to have implemented it from 1 April 2009
The Court relied on the Eldoret Water and Sanitation decision establishing that water companies are governmental agencies and instrumentalities of Local Authorities. The Respondent was incorporated under the Companies Act but publicly owned. Its claim of confusion about its employees' status was dismissed as weak evidence, since management knew from 2005 that it ran an adjunct of the Local Authority subject to Public Service Regulations.
Whether the early retirement constituted unfair termination
Yes; the retirement was implemented in disregard of the Circular and the CBA adopting 60 years, amounting to unfair termination under Sections 43 and 45 of the Employment Act
The retirement notices issued in January 2009 took effect on 31 December 2009, eight months after the Circular took effect on 1 April 2009. The CBA effective 1 August 2009 adopted the 60-year age. The Respondent had no justification to proceed; the subsequent problems were of its own authorship, and its conduct in paying terminal benefits in fits and starts compounded the unfairness.
What remedies are appropriate
Reinstatement and re-engagement refused; compensation enhanced beyond the Respondent's offer but far below the Claimants' demand for full 5-year salaries and allowances
Applying the principle of a fair go all round, the Court balanced employer and employee interests. Employees who did not contribute labour for 5 years could not claim full salaries and work-facilitating allowances such as soap and gumboots. The Respondent's offer of 2 months' salary per remaining year and a Kshs. 50,000 golden handshake failed to capture the gravity of the injury, so the Court improved it.
Whether constitutional and statutory discrimination claims were established
No; the Article 41 claim failed on timing and the Section 5 Employment Act claim failed for lack of wilful discrimination
Article 41 came into force in August 2010, after the December 2009 retirement, so it could not apply retrospectively. The recruitment of new staff after retirement did not constitute discrimination under Section 5 of the Employment Act; the Respondent may have acted out of ignorance rather than wilful discrimination.
Legal principles established
#- Water and Sewerage Companies are governmental agencies and instrumentalities of Local Authorities, and their employees are subject to Public Service Regulations and Circulars
- A Head of Public Service Circular raising the mandatory retirement age took effect before the retirement notices fell due and had the effect of recalling them
- Compensation in employment disputes must be proportionate and not punitive, guided by the principle of a fair go all round
- Retirement contrary to the applicable retirement age amounts to unfair termination under Sections 43 and 45 of the Employment Act
Court orders
#- 1.Declaration that the premature retirement of the Claimants amounted to unfair termination
- 2.Respondent to pay each un-disputed Claimant 5 months' gross salary in compensation for unfair termination
- 3.Respondent to pay un-disputed Claimants terminal benefits: golden handshake of Kshs. 75,000; 4 months' basic salary for each of the remaining 5 years of service; 1 month basic salary in lieu of notice; Kshs. 75,000 baggage allowance
- 4.Payment within 60 days of delivery of the Award
- 5.Nairobi Provincial Labour Officer directed to investigate bona fides of disputed Claimants, arrears of salaries prior to retirement, and part payments made and their nature
- 6.Respondent to forthwith avail all employment records regarding such employees to the Nairobi Provincial Labour Officer and parties' Advocates
- 7.Nairobi Provincial Labour Officer to file a report in Court within 60 days
- 8.Parties to list the dispute for mention at the end of the 60 days for further orders
- 9.No order on costs
- Jurisdiction invoked
- Industrial Court of Kenya, employment and labour relations dispute
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Hassan Magiya Kiage v Attorney General & another [2017] KECA 203 (KLR)[2017] KECA 203 (KLR)10 Nov 2017
- Kibe v Telkom Kenya Ltd (Civil Appeal 25A of 2013) [2014] KECA 765 (KLR)[2014] KECA 765 (KLR)5 Feb 2014
Cite this brief
#Cite this brief
Caselaw, "DAVID MWANGI GIOKO & 51 OTHERS V NAIROBI CITY WATER & SEWERAGE COMPANY LIMITED [2013] KEELRC 463 (KLR)", Case Analysis (2013). Cause 1722 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/463/eng@2013-03-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.