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ELRCPartially AllowedEmployment and Labour Relations Cause (Statement of Claim filed 4 February 2013) - Mombasa· [2014] KEELRC 424 (KLR)

Gideon Ngao Fondo v Municipal Council of Malindi [2014] KEELRC 424 (KLR)

Employment and Labour Relations Court of Kenya
13 June 2014
3,632 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court made Malindi's county government pay for a worker's pension it failed to set up for nearly 20 years.

What this practically means

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Executive summary

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The Claimant, formerly a civil servant in the Office of the President, was appointed Senior Market Master by the Municipal Council of Malindi (since dissolved, with the County Government of Malindi continuing pending actions under section 59 of the Urban Areas and Cities Act, 2011). He sought unremitted employer contributions to the Kenya Local Government Officers' Superannuation Fund, unpaid salaries from retirement, leave and leave allowance, with interest. The Respondent denied liability and pleaded a pending suit, Malindi CMCC No. 377 of 2012, but produced no evidence of it, so the Court declined to consider that issue. The Court found, on the strength of the Respondent's letter of 27 November 1984, that the Claimant was appointed on permanent and pensionable terms, and that the Claimant did his part by completing and signing Superannuation Fund forms which the Respondent never certified or processed. Applying the Local Government Act cap 265, the 1963 Pensions Regulations and Rules, and clause 13 of the 1983 Collective Bargaining Agreement, the Court held the Respondent was under an obligation to register the Claimant and was negligent in failing to do so between 1983 and 2002, when the Claimant belonged to neither the Superannuation nor Provident Fund. Between 2002 and 2007 the Claimant was a Provident Fund/NSSF member and was paid his benefits (Kshs 474,898/80) on retirement. The Court ordered the parties to calculate and file the unremitted contributions for 1983-2002 within 7 days. Claims for unpaid salaries, leave and leave allowance were declined for lack of evidential and statutory foundation, the Court finding section 16A of the Pensions Act inapplicable to local authority employees. The Claimant was awarded costs and interest from filing. Judgment delivered at Mombasa on 13 June 2014 by Radido Stephen, Judge.

Key legal issues

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01

Whether the Claimant was appointed on permanent and pensionable terms

Holding

Yes, based on the Respondent's Clerk's letter of 27 November 1984 confirming permanent and pensionable employment notwithstanding the appointment letter's silence

Reasoning

The appointment letter dated 10 October 1983 did not expressly state permanent and pensionable terms, but correspondence between the Permanent Secretary and the Respondent's Clerk confirmed the transfer was on condition of appointment to a permanent and pensionable post. The Respondent's own letter of 27 November 1984 confirmed this, and the Court was satisfied on that basis.

p. 4
02

Whether the Respondent was under a legal obligation to register the Claimant with the Superannuation Fund

Holding

Yes; the statutory regime (Local Government Act cap 265 and the 1963 Pensions Regulations and Rules) and the 1983 Collective Bargaining Agreement imposed the obligation

Reasoning

Section 151 of the Local Government Act empowered local authorities to establish and contribute to pension funds; the 1963 Regulations established the Superannuation Fund with compulsory membership for employees on pensionable posts; and clause 13 read with the agreement's terms created positive obligations. The Respondent failed to process the Claimant's completed application.

p. 5
03

Whether pending proceedings in Malindi CMCC No. 377 of 2012 barred the suit

Holding

The issue was not considered because the Respondent produced no evidence of the pending suit

Reasoning

The Respondent pleaded that a suit between the same parties over the same issues was pending, but adduced no material to substantiate the plea, so the Court declined to consider the issue.

p. 4

Legal principles established

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  • An employer who is under a statutory and contractual obligation to register an employee with a pension scheme and fails to do so is negligent and liable to make good the benefit the employee would have been entitled to for the period of default.

Court orders

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  1. 1.Declaration that the Respondent was negligent and in breach of the law in failing to process/register the Claimant as a member/contributor to any pension scheme between 1983 and 2002
  2. 2.Respondent ordered to pay unremitted contributions to the Superannuation Fund between 1983 and 2002, to be calculated and filed in Court within 7 days
  3. 3.Claims for leave, leave allowance and unpaid salaries to retirement dismissed
  4. 4.Claimant awarded costs and interest at Court rates from time of filing of Claim

Authorities

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Legislation

  • Urban Areas and Cities Act, 2011section 59
  • Pensions (Amendment) Act, 2003section 2 (actually section 16A of the Pensions Act)
  • Pensions Actsection 16A
  • Local Government (Local Authorities Trust) Rules, 2007rule 49
  • Local Government Act, cap 265section 151; preamble
  • Kenya (Local Government)(Pensions) Regulations, 1963regulations 5 and 8
  • Nairobi Municipality (Superannuation Fund) Rules, 1950established fund
  • Kenya Local Government Officers' Superannuation Fund Rules, 1963rule 5; rule 8
  • Local Authorities Pensions Trust Rules, 2007rule 49
  • Local Authorities Provident Fund Act, cap 272section 8
  • National Social Security Fund Actretirement benefits terms
Jurisdiction invoked
Original employment and labour relations jurisdiction (Employment and Labour Relations Court); Respondent substituted for dissolved Municipal Council of Malindi pursuant to section 59 of the Urban Areas and Cities Act, 2011

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, "Gideon Ngao Fondo v Municipal Council of Malindi [2014] KEELRC 424 (KLR)", Case Analysis (2014). Employment and Labour Relations Cause (Statement of Claim filed 4 February 2013) - Mombasa. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/424/eng@2014-06-13

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