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ELRCPartially AllowedPetition No. 224 of 2013· [2014] KEELRC 107 (KLR)

Trustees Of Telposta Pension Scheme v Attorney General & 5 others [2014] KEELRC 107 (KLR)

Industrial Court (Employment and Labour Relations Court)
21 November 2014
4,240 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~17 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court confirmed tribunal oversight of pension disputes but struck down a tribunal order recalculating pensions on consolidated salary instead of basic salary.

What this practically means

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Executive summary

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The Petitioner, Trustees of the Telposta SACCO Pension Scheme, challenged decisions of the Retirement Benefits Appeals Tribunal directing recalculation of pensions for two retired Telkom Kenya management staff (the 1st and 2nd Interested Parties) based on consolidated salary rather than the basic salary prescribed in the Trust Deed and Scheme Rules. The consolidated pay package had been introduced by a Telkom Kenya circular of 8th May 2000 for management staff only, but the Trust Deed and Rules were never amended, and the circular itself re-affirmed pension contributions at 7.5% of basic salary. The Petitioner sought declarations that the Retirement Benefits Act's silence on appeals to the High Court, and Sections 49(4) and 50(2) purporting to confer High Court status on the Tribunal, were unconstitutional, and that the Tribunal's recalculation direction was discriminatory. The matter was transferred from the High Court (Petition No. 224 of 2013) to the Industrial Court by Majanja J after the High Court had dismissed the Petitioner's appeals for lack of jurisdiction. The Interested Parties opposed, disclosing that the Petitioner had concealed a pending judicial review case on the same issue. The Court framed three issues: constitutionality of Sections 49(4) and 50(2); lawfulness of the Tribunal's decision; and available remedies. It declined to strike down the statutory provisions, holding judicial review remains available under Article 165(6), but found the Tribunal had acted unlawfully, unreasonably and unfairly under Article 47(1), and in violation of Article 27, by awarding pensions exceeding the Trust Deed and Scheme Rules. The petition was partially allowed: the recalculation direction was declared unlawful, the remaining prayers were declined, and costs were awarded against the 1st and 2nd Respondents and 1st and 2nd Interested Parties jointly and severally.

Key legal issues

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01

Constitutionality of Sections 49(4) and 50(2) of the Retirement Benefits Act

Holding

Sections not unconstitutional; judicial review to the High Court remains available

Reasoning

The Court noted consensus that Tribunal decisions are open to judicial review. It held that a specialized appellate tribunal to bring disputes to finality expeditiously is reasonable and soundly founded, and that the existence of judicial review at the High Court, which the Petitioner had not contested (and indeed had concealed), means the Act's policy is not unconstitutional.

p. 7
02

Whether the Tribunal's decision directing recalculation on consolidated salary was lawful

Holding

The Tribunal acted unlawfully, unreasonably and in violation of the Trust Deed and Scheme Rules

Reasoning

The Trust Deed and Rules define pensionable salary as basic salary, and the 8th May 2000 circular re-affirmed contribution on basic salary. Only the Trustees, with employer and Commissioner of Income Tax approval, could amend the deed; no amendment occurred. The Tribunal therefore exercised powers it did not have, and its decision infringed the Petitioner's rights under Articles 47(1) and 27.

p. 9
03

Effect of the Petitioner's non-disclosure of pending Judicial Review Case No. 331 of 2012

Holding

The Petitioner came to Court with unclean hands, though this did not defeat the substantive claim

Reasoning

The Interested Parties demonstrated the Petitioner had concealed the existence of a pending judicial review case in which the same issue was directly in question. The Court condemned this conduct as disingenuous but proceeded to determine the petition on its merits, declining the rest of the prayers.

p. 7

Legal principles established

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  • A specialized appellate tribunal is not unconstitutional merely because the statute is silent on further appeal, since judicial review remains available under the High Court's supervisory jurisdiction
  • Tribunal decisions must meet the rationality standard of Article 47 and the equality test of Article 27; a tribunal that disregards the founding trust documents of a pension scheme acts unlawfully

Court orders

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  1. 1.Declaration that in so far as Retirement Benefits Appeals Tribunal decisions purported to direct recalculation of the retirement benefits for the 1st and 2nd Interested Parties and other parties using a consolidated salary instead of a basic salary, it is disproportionate to their pension contribution and unlawful, unreasonable and in violation of the Trust Deed and Rules of the Telposta Pension Scheme
  2. 2.The rest of the Petitioner's prayers were declined
  3. 3.The 1st and 2nd Respondents and the 1st and 2nd Interested Parties jointly and severally held liable to pay costs of the Petition

Authorities

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Legislation

  • Constitution of Kenya 2010Articles 2, 19, 20(1) & (2), 3(b), 21, 22, 23(1) & (3), 25(c), 27, 47(1), 69(1)(d), 162(2), 165(3)(e), 165(5), 165(6), 169(1)(d)
  • Retirement Benefits Act, Cap 197Sections 3, 46, 47, 48, 49(1), 49(4), 50(2), 52
  • Civil Procedure ActSections 6, 65(1)(b)

Cases cited (4)

  • Joseph Kipkorir Tanui v Telkom Kenya Limited
    Industrial Court Cause No. 254 of 2010
  • Mount Kenya Bottlers Limited & 3 others v Attorney General and others
    Nairobi Petition No. 72 of 2011 [2012]eKLR
  • Tom Kusienya & 7 others v Kenya Railways Corporation and 2 others
    [2013]eKLR
  • Decision of Justice David Onyancha on the Retirement Benefits Appeals Tribunal jurisdiction
Jurisdiction invoked
Articles 22, 23, 47, 162(2) and 165(6) of the Constitution of Kenya 2010 (matter transferred from the High Court by Majanja J)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Trustees Of Telposta Pension Scheme v Attorney General & 5 others [2014] KEELRC 107 (KLR)", Case Analysis (2014). Petition No. 224 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/107/eng@2014-11-21

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