Maurice Anthony Ewing v Equity Bank Limited [2014] KEELRC 1469 (KLR)
The bottom line
#A Kenyan court ruled that unfairly dismissed employees keep their employer's pension contributions even if they served less than a year.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.The pensionable period applicable to the Claimant
- 2.The quantum of the Claimant's own contribution towards his pension account
- 3.Whether the Claimant is entitled to the employer's contribution and if so the applicable quantum
Key legal issues
#Pensionable period applicable to the Claimant
Pensionable period runs from the end of the 6-month probation (1st May 2012) to termination (15th August 2012), i.e. 3 months and 15 days; no pension accrues for the compensation period or probation
The contract pegged eligibility for the Staff Contributory Pension Scheme on successful completion of the 6-month probationary period. Pension is an accrued monthly earning based on salary and scheme rules, so no pension can be claimed for periods after termination or during probation. Any deductions made during probation were erroneous and must be refunded.
Quantum of the Claimant's own contribution
Respondent's global figure lacked basis; contribution to be recalculated on the monthly salary of US$ 35,000
The parties advanced divergent figures: the Claimant's US$1,750 monthly (5% of US$35,000) and the Respondent's global Kshs 544,958.12. The Respondent provided no basis for its monthly figures and the Court could not verify adherence to the contractual contribution rates, so recalculation on the contractual salary basis was directed.
Entitlement to employer's contribution despite less than one year of service
Claimant entitled to employer's contribution notwithstanding brevity of service because termination was unfair and through no fault of the employee
Regulation 20 of the Retirement Benefits (Occupational Retirement Benefits Schemes) Regulations, 2000 requires full vesting within one year. The Court read the one-year waiting period as encouraging reasonable service but held it cannot penalise an employee whose employment the employer unfairly terminated; the employer cannot benefit from its own wrong.
Legal principles established
#- The one-year vesting period under Regulation 20 cannot be used against an employee whose employment was terminated by the employer through no fault of the employee
- Pension in a contributory scheme is an accrued earning and cannot be claimed for periods not worked
Court orders
#- 1.Claim for pension for any period after termination of employment dismissed
- 2.Respondent directed to rectify erroneous pension deductions made during probation by making appropriate refunds
- 3.Respondent directed to recalculate the Claimant's own contribution on the basis of his monthly salary of US$ 35,000
- 4.Respondent directed to pay the Claimant its (employer's) pension contribution for the pensionable period from the end of probation to the date of termination, based on the monthly salary of US$ 35,000
- 5.Respondent directed to issue the Claimant with a Certificate of Service
- 6.Each party to bear their own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and labour relations jurisdiction (award in unfair termination matter; pension tabulation referred for determination)
Relief refused
#Pension for the 4 months' compensation period and any period after termination of employment
Pension is an accrued earning; an employee cannot claim pension not earned
Costs
Each party will bear their own costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
This limitation cannot however be used against an employee where employment is terminated by the employer through no fault of the employee.
It follows therefore that an employee cannot claim pension which is not earned. Consequently, the Claimant's claim for pension for any period after the termination of his employment is without basis and is dismissed.
I therefore direct the Respondent to pay to the Claimant its contribution for the pensionable period running from the end of the probationary period to the date of termination of the Claimant's employment.
Each party will bear their own costs.
Issues in the judgment
#Judgment does not state the case title, case number or neutral citation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Maurice Anthony Ewing v Equity Bank Limited [2014] KEELRC 1469 (KLR)", Case Analysis (2014). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1469/eng@2014-12-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.