Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedIndustrial Court Cause No. 1113 of 2010· [2013] KEELRC 859 (KLR)

Samuel Cheruiyot v Kericho Municipal Council & another [2013] KEELRC 859 (KLR)

Industrial Court of Kenya
15 May 2013
5,305 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
Three consolidated claims (Causes 1113, 1112 and 1110 of 2010) by Samuel Cheruiyot, Philip Bii and Willy Kipsang Ngeno against Kericho Municipal Council and Kericho Water & Sanitation Company Ltd. The claimants, originally municipal council employees engaged between 1976 and 1978, were transferred in 2003 to the newly formed water company under an agency agreement and retired on 31st December 2009 at age 55, before a Head of Public Service circular of 20th March 2009 raised the public service retirement age to 60. The 1st respondent did not participate; the 2nd respondent denied the claim. The court framed four issues. On the first, it held, following Republic v Eldoret Water & Sanitation Co Ltd, Kenya Local Government Workers v WASPA and David Mwangi Gioko, that the claimants remained public servants, so the circular applied to them. On the second, it held that the transfer and agency agreement left their terms and conditions intact, since the council's statutory water functions could not be delegated to a private company without ministerial consent. On the third, while finding the retirement at 55 unlawful and calling for compensation, the court applied the fair go all round principle and refused the full five years' salary, awarding instead a golden handshake of Kshs.125,000 plus one year's gross salary to each claimant (Kshs.424,220, Kshs.327,236 and Kshs.544,880 respectively). On the fourth, it declined default judgment against the 1st respondent. Costs were awarded to the claimants against the respondent.

Key legal issues

#
01

Whether the claimants were public servants covered by the Head of Public Service circular raising retirement age to 60

Holding

Yes. Employees of water companies established under the Water Act, 2002 remained public servants and employees of the parent local authorities, so the circular of 20th March 2009 applied to them.

Reasoning

Relying on Republic v Eldoret Water & Sanitation Co Ltd, the Kenya Local Government Workers v WASPA decision and David Mwangi Gioko, the court held that water companies though registered as separate commercial entities are wholly owned by their parent councils in a principal-agent, parent-subsidiary relationship, so the distinction is only in name and legal regime. The claimants therefore fell within the Muthaura circular enhancing retirement age from 55 to 60 years.

p. 5
02

Whether the transfer and agency agreement varied the claimants' terms and conditions of service

Holding

No. The transfer was temporary under an agency agreement and the claimants remained on their original terms and conditions of service.

Reasoning

The 2nd respondent is a private company limited by shares, but it acted as agent and subsidiary of the 1st respondent for water supply. Section 178(i) of the Local Government Act vests water supply in municipal councils, and such duties could not be delegated to a private company without the authority and consent of the Minister for Local Government. The letter of transfer intended the terms of service to remain intact.

p. 5
03

Whether the claimants were entitled to the reliefs sought

Holding

Partly. Retirement at 55 was unlawful given the enhanced retirement age of 60, but compensation was limited to a golden handshake and one year's salary rather than the full five years of unserved service.

Reasoning

The retirement at 55 on 31st December 2009 deprived the claimants of five years of service through the 2nd respondent's negligence and callousness. However, applying the fair go all round principle from Maria Kagai Ligaga v Coca Cola, compensation must redress economic injury proportionately and cannot be based on the entire remainder of years of service where no labour was contributed. Conflicting evidence also showed some claimants had accessed pensions or opted for early retirement.

p. 7
04

Whether judgment in default should issue against the 1st respondent

Holding

No. Judgment in default was declined because the issue was raised too late and would unjustly truncate the determination of the issues between the intertwined respondents.

Reasoning

The 1st respondent filed no pleadings, but the request for default judgment was raised only in submissions after the close of proceedings, without giving the respondents an opportunity to address it. Entering such judgment would benefit the claimants on a technicality and would oust the 2nd respondent's defence, since the court found the respondents intertwined and the same in law.

p. 9

Legal principles established

#
  • Employees transferred from local authorities to water companies under agency arrangements remain public servants and employees of the parent councils.
  • An agency agreement transferring staff does not vary the transferred employees' terms and conditions of service.
  • Compensation for unfair termination must be proportionate and based on the principle of a fair go all round, not on the full remainder of years of service.

Court orders

#
  1. 1.Award to Willy Kipsang Ng'eno of a golden handshake of Kshs.125,000.00 plus one year gross salary out of the five years unserved period (Kshs.24,935.00 x 12 = Kshs.299,220.00), totalling Kshs.424,220.00
  2. 2.Award to Philip Bii of a golden handshake of Kshs.125,000.00 plus one year gross salary out of the five years unserved period (Kshs.16,853.00 x 12 = Kshs.202,236.00), totalling Kshs.327,236.00
  3. 3.Award to Samuel Cheruiyot of a golden handshake of Kshs.125,000.00 plus one year gross salary out of the five years unserved period (Kshs.34,990.00 x 12 = Kshs.419,880.00), totalling Kshs.544,880.00
  4. 4.Costs of the claim to be borne by the respondent
  5. 5.Decline to enter judgment in default of appearance and defence against the 1st respondent

Authorities

#

Legislation

  • Constitution of Kenya, 2010Article 234(5)
  • Repealed Constitution of KenyaSection 107
  • Local Government ActChapter 265, sections 112 and 178(i)
  • Water ActNo. 8 of 2002 (also cited as No. 48 of 2002)
  • Companies ActChapter 486, Laws of Kenya

Cases cited (4)

  • Republic Vs Eldoret Water and Sanitation Co. Ltd.
    High Court Civil Application No. 970 of 2003
  • Kenya Local Government Workers & Another Vs Water Services Providers Association (WASPA) and 3 others
    Industrial Court CA No. 213 of 2010
  • David Mwangi Gioko and 51 Others Vs Nairobi City Water & Sewerage Company Limited
    Industrial Court Cause No. 1722 of 2011 (unreported)
  • Maria Kagai Ligaga Vs Coca Cola East and Central Africa Ltd.
    Industrial Court Cause No. 661 of 2009
Jurisdiction invoked
Original jurisdiction of the Industrial Court of Kenya under its establishing legislation over employment and labour relations disputes

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Samuel Cheruiyot v Kericho Municipal Council & another [2013] KEELRC 859 (KLR)", Case Analysis (2013). Industrial Court Cause No. 1113 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/859/eng@2013-05-15

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