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ELRCAllowedNot stated in judgment· [2016] KEELRC 1568 (KLR)

Henry Kamau Ngare v Teachers Service Commission & another [2016] KEELRC 1568 (KLR)

Industrial Court (Employment and Labour Relations Court)
11 March 2016
BOByram Ongaya
3,197 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that a dismissed teacher could not be stripped of his pension because accrued pension is protected property.

What this practically means

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Executive summary

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The claimant, a teacher employed by the Teachers Service Commission from 1971 and on permanent and pensionable terms from 1983, was dismissed effective 1.03.2005 for alleged carnal knowledge of a pupil, shortly before his compulsory retirement at 55 years on 31.08.2005. He sued seeking computation and payment of his terminal benefits, a declaration of entitlement, costs and interest. The 1st respondent argued the dismissal was valid and fair after due process, and relied on Regulation 82(2) of the TSC Code and the Pensions Act, under which a dismissed teacher forfeits all pension claims; it also raised a preliminary objection on capacity and cause of action. The 2nd respondent, the Director of Pensions, joined on the court's own order, sought dismissal of the claim. The court found the dismissal procedurally fair but held that pension benefits, once crystallized, are property which cannot be withheld without due compensation; section 113 of the former Constitution required PSC concurrence for withholding pensions, which was not obtained. Regulation 82(2) was declared unconstitutional as contravening the former Constitution and, persuasively, Articles 40, 41 and 43 of the 2010 Constitution. The preliminary objection failed. The court set aside the dismissal, substituted retirement in the public interest effective 1.03.2005, ordered computation and payment of pension benefits, awarded the claimant costs against the 1st respondent, and directed the 1st and 2nd respondents to bear their own costs.

Key legal issues

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01

Law applicable to granting and denying pension benefits

Holding

Pension benefits once due are property protected by the former Constitution (ss. 70, 75, 113); forfeiture on dismissal under Regulation 82(2) of the TSC Code was unconstitutional.

Reasoning

The court held pension is a right in the nature of property compensating past service. Section 113 of the former Constitution required PSC concurrence before withholding or reducing pension benefits, which was not obtained. Regulation 82(2), which forfeited pension on dismissal, contravened the former Constitution and would contravene Articles 40, 41 and 43 of the 2010 Constitution, and was therefore unconstitutional.

p. 4
02

Rationale for payment of pension benefits

Holding

Pension recognizes and compensates service already rendered; once the employee is eligible, it vests and is payable as of right.

Reasoning

The court reasoned that pension or service pay compensates the employee for service already given, is a property right and fair labour practice, and is consistent with the right to social security under Article 43(1)(c). Denying it amounts to unjust enrichment of the employer. Denial for misconduct should be pursued, if at all, through the criminal justice system rather than deprivation of pension.

p. 5
03

Entitlement to remedies

Holding

Claimant entitled as prayed; dismissal set aside and substituted with retirement in the public interest effective 1.03.2005 with pension benefits under the Pensions Act.

Reasoning

Although the dismissal was established to be procedurally fair and for a valid reason, the consequence of total forfeiture of pension was unconstitutional. The court held the appropriate action was retirement in the public interest, which terminates employment while protecting accrued pension benefits as the former Constitution required.

p. 5
04

Preliminary objection

Holding

Preliminary objection failed; the 1st respondent was a proper party since its dismissal decision caused the denial of pension benefits.

Reasoning

The 1st respondent had made the dismissal decision whose consequence was denial of pension benefits, so it could not escape liability notwithstanding cooperation between respondents in pension payment under the Pensions Act.

p. 5

Legal principles established

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  • Pension benefits or service pay is a right in the nature of property which, once crystallized, cannot be withheld, denied, diminished or taken away without due compensation.
  • It is unfair labour practice for an employer to deny, withhold or reduce accrued pension or service pay on account of misconduct or other adverse ground attributable to the employee.
  • Statutory or contractual provisions attaching disciplinary action to deprivation of accrued pension benefits are unconstitutional as unfair deprivation of property.

Court orders

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  1. 1.Declaration that the dismissal with consequence that the claimant forfeits pension benefits is set aside and substituted with retirement in the public interest effective 1.03.2005, with pension benefits payable under the Pensions Act, Cap. 189
  2. 2.Respondents compelled to compute, declare and file in court an account of the claimant's legal terminal (retirement) benefits and schedule of payment (Kshs. 4,539.00 monthly pension and Kshs. 363,195 commuted lump sum gratuity) or other due computation under the Pensions Act, by 1.05.2016
  3. 3.Declaration that the claimant is entitled to his legal terminal benefits, payable by 1.07.2016 failing which interest at court rates from date of judgment until full payment
  4. 4.1st respondent to pay the claimant's costs of the suit
  5. 5.1st and 2nd respondents to bear their own costs of the suit
  6. 6.Parties to mention the matter on a convenient date to confirm compliance

Authorities

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Legislation

  • Teachers Service Commission ActCap 212 section 3(b)
  • Teachers Service Commission Code of Regulations for TeachersRegulations 70(2)(a), 73, 82(2)
  • Pensions Actsections 5, 6
  • Employment Act, 2007sections 35(5), 40(1)(g)
  • Constitution of Kenya (former)sections 70, 75, 113(1), 113(5)
  • Constitution of Kenya, 2010Articles 40, 41(1), 41(2)(b), 43(1)(c)

Cases cited (3)

  • National Bank of Kenya Limited –Versus- Pipeplastic Samkolit (K) Limited and Another
    [2001]eKLR
  • Director of Pensions –Versus- Abdul Majid Cocker
    Civil Appeal No. 50 of 1999
  • Kenneth Njoroge Gitau- Versus- Attorney General and Another
    [2012]eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction of the Industrial Court; former Constitution sections 70, 75 and 113 considered

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Henry Kamau Ngare v Teachers Service Commission & another [2016] KEELRC 1568 (KLR)", Case Analysis (2016). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1568/eng@2016-03-11

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