George Nyabira Nyatama & 3 Others v Gusii Mwalimu Co-Operative Savings &Credit; Society Ltd [2013] KEELRC 610 (KLR)
The bottom line
#Kenya's employment court ruled a Sacco wrongfully retired staff at 55 when an official circular had raised the retirement age to 60, awarding each employee a year's salary.
What this practically means
#Executive summary
#Key legal issues
#Whether the respondents were justified in retiring the claimants at 55 years
The retirement at 55 was unlawful and unfair because the Commissioner's circular raised the retirement age to 60
The court found that under S.3 of the Co-operative Societies Act Cap 490 the Commissioner has statutory responsibility for the administration and development of co-operative societies, so his circular raising the retirement age from 55 to 60 bound the respondents. The respondents admitted being in some respects under the Commissioner's control, and having accepted that administrative arrangement could not ignore the circulars. The court noted it had reached a similar finding in a prior co-operative society cause.
The distinguishing of the Ex-parte Appl. No. 93/2007 authority relied on by the respondents
That authority was distinguishable because there the Commissioner acted ultra vires Sections 4 and 27 of the Co-operatives Act, whereas here the Commissioner acted within the law
The respondents relied on R v The Commissioner of Co-operative Development & 2 Others, Ex-parte Appl. No. 93/2007 where a decision of the Commissioner was found ultra vires. The court distinguished it on the ground that in that case the Commissioner exceeded Sections 4 and 27 of the Co-operatives Act, whereas the circular here was issued within the Commissioner's statutory powers.
Whether reinstatement until age 60 was a suitable remedy
Reinstatement was refused as impractical and barred by the three-year cap
Although the retirement was found unlawful, the claimants had already been paid their terminal dues up to retirement and had been out of employment for over three years. Section 49(4) of the Employment Act 2007 requires practicality of reinstatement to be considered, and Section 12(3)(vii) caps reinstatement orders at three years from dismissal, so the court instead awarded one year's salary as compensation for the unlawful retirement.
Legal principles established
#- A co-operative society registered under the Commissioner of Co-operatives is bound by administrative circulars lawfully issued by the Commissioner, and cannot both claim to be under that administrative arrangement and ignore the circulars
- Retiring co-operative movement employees at 55 years after the Commissioner's circular raised the retirement age to 60 was unlawful and unfair
Court orders
#- 1.Each claimant to be paid 1 year's salary as per last pay as compensation for unlawful retirement, subject to statutory deductions
- 2.Respondents to pay costs of the case
- Jurisdiction invoked
- Industrial Court jurisdiction over employment claims under the Employment Act 2007; Co-operative Societies Act Cap 490
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "George Nyabira Nyatama & 3 Others v Gusii Mwalimu Co-Operative Savings &Credit; Society Ltd [2013] KEELRC 610 (KLR)", Case Analysis (2013). Cause No. 1A of 2013 (statement of claim filed 26.7.2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/610/eng@2013-06-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.