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ELRCPartially Allowed· [2016] KEELRC 738 (KLR)

Simon Kipkorir Ketter v A.C.K Christian Intermediate Technology Centre & another [2016] KEELRC 738 (KLR)

Employment and Labour Relations Court
21 July 2016
MOMAUREEN ONYANGO
1,811 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 confirmed employers can set their own retirement age, and pension disputes must go to the Retirement Benefits Authority, not the employment court.

What this practically means

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Executive summary

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The Claimant, employed by the Anglican Church of Kenya Eldoret Region in 1984 and later seconded to Christian Community Services and then Christian Intermediate Technology Centre, was served with a retirement notice on 9 January 2012 giving three months' notice. On appeal he was allowed to serve until the expiry of his fixed-term contract on 30 September 2012, when he was retired. He sued, claiming unfair and unlawful retirement, three months' salary in lieu of notice, gratuity from 2003 to 2012, refund of pension contributions invested in the wound-up Stallion Insurance Company Limited with 19% compounded interest, severance pay, general damages, salary up to age 60, a certificate of service, costs and interest, and constitutional declarations under Articles 28, 41(1), 45(2), 47, 48 and 50(1). The Respondents defended the claim, the 1st Respondent asserting a mandatory retirement age of 55 and payment of gratuity in 2003 when the scheme was abolished, and the 2nd Respondent explaining the pension loss through Stallion Insurance's statutory management and subsequent payments through Capital Express Assurance. The court held that retirement age is not regulated by the Employment Act and each employer may set its own; the public service circular extending retirement to 60 did not bind the Respondents, and the Claimant himself had acknowledged the age of 55 and requested the contract extension. It also held it lacked jurisdiction over pension complaints, which lie under the Retirement Benefits Act with the Chief Executive Officer and the Retirement Benefits Tribunal, and that gratuity was neither payable nor proved. The claim was dismissed except for the certificate of service, which the Respondent was ordered to issue within 30 days, with each party bearing its own costs.

Key legal issues

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01

Retirement age applicable to the Claimant

Holding

The retirement age was 55 years as per the Respondents' Terms and Conditions of Service; the public service circular extending retirement to 60 did not apply to private-sector employers.

Reasoning

The Muthaura circular of 20 March 2009 was addressed solely to public service entities and titled 'Review of the Mandatory Retirement Age for Public Servants'. The Claimant himself, in his letter of 24 January 2012, acknowledged the circular applied to the public service and requested to complete his contract to 30 September 2012, which was granted. His retirement at 55 was therefore lawful and fair.

p. 4
02

Entitlement to notice pay

Holding

Not entitled to further notice having been given 3 months' notice and having requested the extension.

Reasoning

The Claimant received a notice of retirement on 9 January 2012 giving 3 months' notice ending 31 March 2012, then successfully appealed to serve to the expiry of his fixed-term contract on 30 September 2012. Having requested and obtained that extension, no further notice was owed.

p. 4
03

Jurisdiction over pension complaints

Holding

The court has no jurisdiction; pension grievances must go to the CEO of the Retirement Benefits Authority and, on appeal, the Retirement Benefits Tribunal.

Reasoning

Under sections 46 and 48 of the Retirement Benefits Act, a person aggrieved by the handling of his pension may complain to the Chief Executive Officer and appeal to the Tribunal. This Court only assumes pension jurisdiction on appeal from the Tribunal, so the pension claim is struck out with advice to file a complaint with the Authority.

p. 4
04

Gratuity and damages

Holding

Gratuity not proved; general damages and payment to age 60 refused as retirement was lawful.

Reasoning

The gratuity scheme was abolished in 2003 when employees were enrolled in NSSF and the Claimant was paid Shs.643,464, a fact he admitted. He did not produce his final contract to prove an entitlement to gratuity. Having failed to prove unlawful or unfair retirement, he is not entitled to general damages or salary up to age 60.

p. 4

Legal principles established

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  • Retirement age is not a term governed by the Employment Act; each employer is free to set its own retirement age of 50 years or above.
  • The ELRC's jurisdiction over pensions is limited to appeals from the Retirement Benefits Tribunal.
  • Gratuity only becomes due if provided for under the employee's contract of employment.
  • A certificate of service is a mandatory requirement under section 51 of the Employment Act.

Court orders

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  1. 1.The prayer for certificate of service succeeds and the Respondent is directed to issue the same to the Claimant within 30 days
  2. 2.The Claim is dismissed save for the prayer for certificate of service
  3. 3.Each party shall bear its costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Retirement Benefits Act (pension matters only on appeal from the Retirement Benefits Tribunal)

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, "Simon Kipkorir Ketter v A.C.K Christian Intermediate Technology Centre & another [2016] KEELRC 738 (KLR)", Case Analysis (2016). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/738/eng@2016-07-21

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