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ELRCOtherCause No 2003 of 2015· [2019] KEELRC 2372 (KLR)

Jimmy R. Kavilu & 16 others v Stanbic Bank Kenya Limited & 7 others [2019] KEELRC 2372 (KLR)

Employment and Labour Relations Court
4 February 2019
MOMaureen Onyango
2,797 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled it cannot decide pension scheme disputes — those must go through the Retirement Benefits Authority's complaint process first.

What this practically means

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Executive summary

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The Respondents filed a preliminary objection on 19th October 2018 contending that the Employment and Labour Relations Court lacks jurisdiction over the retirement benefits dispute, that the Retirement Benefits Act provides an alternative dispute resolution mechanism under sections 46 and 47, and that section 15 of the ELRC Act recognises such mechanisms. The Claimants opposed, arguing the objection was res judicata because Nambuye J. had dismissed a similar objection in HCCC No. 983 of 2004 on 23rd May 2008, and that this was a 'mixed grill case' arising from the employment relationship. The court held the objection was not res judicata since the earlier ruling concerned the unlimited jurisdiction of the High Court under section 60 of the repealed Constitution, whereas the present issue concerns the ELRC's jurisdiction under Article 162(2). Although endorsing the mixed grill principle in Suzanne Achieng Butler v Redhill Heights, the court distinguished it: the bulk of the claim concerns computation of terminal benefits and is against the trustees of the pension scheme, not the employer. Following Abdalla Osman v Standard Chartered Bank, Speaker v Karume and the Court of Appeal's decision in Staff Pension Fund v Anne Wangui Ngugi, the court held that where a statute provides an alternative dispute resolution mechanism, the ELRC must withhold jurisdiction. It declined jurisdiction over the pension claims, save for judicial review of Retirement Benefits Tribunal decisions. The 1st claimant's claim was split: terminal benefits remain before the ELRC; retirement benefits go to the Retirement Benefits Authority. Each party bears their own costs in the ELRC and the High Court.

Key legal issues

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01

Res judicata vis-à-vis the earlier High Court jurisdictional ruling

Holding

The preliminary objection is not res judicata because the earlier ruling concerned the jurisdiction of the High Court under the repealed Constitution, whereas the present issue concerns the jurisdiction of the ELRC under Article 162(2)

Reasoning

Nambuye J. had ruled on whether the Retirement Benefits Authority or the High Court was the proper forum, anchoring her decision on section 60 of the repealed Constitution which vested unlimited original jurisdiction in the High Court. The ELRC is a distinct court constituted under Article 162(2) of the 2010 Constitution, so the jurisdictional question now raised was never previously determined and cannot be res judicata.

p. 3
02

Jurisdiction of the ELRC over pension/retirement benefits disputes

Holding

The ELRC has no jurisdiction to determine disputes concerning pension schemes and their trustees; such disputes must follow the statutory mechanism in sections 46-49 of the Retirement Benefits Act, the only exception being judicial review of Retirement Benefits Tribunal decisions

Reasoning

Section 12(1) of the ELRC Act confines the court's exclusive jurisdiction to employment and labour relations disputes. The bulk of the claim concerns the factor used to compute terminal benefits and is against the decision of the trustees of the scheme, not the employer. The Retirement Benefits Act provides an internal review and appeal mechanism, and under the doctrine of exhaustion, following Speaker v Karume and the Court of Appeal decision in Staff Pension Fund v Anne Wangui Ngugi, the court must decline jurisdiction.

p. 5
03

The 'mixed grill' doctrine

Holding

Although courts of concurrent jurisdiction may adjudicate consequential questions in mixed grill cases, here the claim is predominantly a pension dispute, with only the 1st claimant's terminal benefits claim against the employer remaining

Reasoning

The claimants invoked the mixed grill principle from Suzanne Achieng Butler v Redhill Heights. The court agreed with the principle but distinguished the case: the bulk of the claim concerns the computation of terminal benefits and is directed at the trustees' decision. Only the 1st claimant's complaint about conversion of his six months' notice to terminal leave lies against the employer, so only that portion may remain in the ELRC.

p. 4

Legal principles established

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  • Where an alternative dispute resolution mechanism is provided by statute, the ELRC ought to withhold its jurisdiction in favour of that mechanism in pension disputes

Court orders

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  1. 1.The court declined jurisdiction over the retirement benefits (pension) claims, which are to be pursued under the Retirement Benefits Act dispute resolution mechanism (Retirement Benefits Authority)
  2. 2.The claim of the 1st claimant (Jimmy R. Kavilu) was split: the claim on terminal benefits remains for determination by this court, while the claim for retirement benefits is referred to the Retirement Benefits Authority
  3. 3.Each party to bear their own costs both in this court and in the High Court

Authorities

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Legislation

  • Retirement Benefits Act (No. 3 of 1997)sections 46, 47, 48, 49
  • Employment and Labour Relations Court Actsections 12(1), 15
  • Retirement Benefits Authority Act (No. 3 of 1997)Part VI
  • Constitution of Kenya 2010Article 162(2)
  • Repealed Constitution of Kenyasection 60(1)
  • Civil Procedure RulesOrder 53

Cases cited (11)

  • Agricultural Livestock and Fisheries & 3 Others Ex-parte Douglas M. Barasa, Collins Wafula Makunja and Richard Wamalwa
  • Republic v Karisa Chengi & 2 others
    [2017] eKLR
  • Speaker of National Assembly v James Njenga Karume
    [1992] eKLR
  • Omondi v National Bank of Kenya Limited and Others
    [2001] 1 EA 175
  • Trade Bank Limited v LZ Engineering Limited
    [2000] 1 EA 266
  • Suzanne Achieng Butler & 4 Others v Redhill Heights Investments Limited & another
    [2016]
  • Peter Mutisya Musembi & another v National Bank of Kenya
    (2014) eKLR
  • Dean Patty v Commonwealth Bank of Australia
    2000 FCA 1072
  • Philip Morris Inc. v Adam P. Brown Male Fashions Ltd
    (1981) 148 CLR
  • Abdalla Osman & 628 others v Standard Chartered Bank (K) Limited & others
    ELRC Cause No 59 of 2018
  • Staff Pension Fund & Kenya Commercial Bank Staff Retirement (DC) Scheme 2006 and another v Anne Wangui Ngugi & 524 others
    (2018) eKLR
Jurisdiction invoked
Article 162(2) of the Constitution and Section 12 of the Employment and Labour Relations Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Jimmy R. Kavilu & 16 others v Stanbic Bank Kenya Limited & 7 others [2019] KEELRC 2372 (KLR)", Case Analysis (2019). Cause No 2003 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2372/eng@2019-02-04

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