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ELRCDismissedNot stated in the judgment· [2019] KEELRC 2559 (KLR)

Awuor v Telepost Co-operative Sacco Society Limited & another (Petition 109 of 2017) [2019] KEELRC 2559 (KLR)

Employment and Labour Relations Court
24 May 2019
ANAbuodha J. N.
5,035 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~20 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out a Sacco CEO's challenge because he skipped the required appeal to the Cabinet Secretary before going to court.

What this practically means

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Executive summary

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The petitioner, formerly Chief Executive Officer of a deposit-taking SACCO Society, petitioned against his suspension and removal from office and a prohibition from serving as a Sacco officer, as well as the freezing of his FOSA savings of approximately KShs 900,000, alleging violation of articles 27(1), 47(1) and 50(2) of the Constitution. The 1st respondent (SASRA), the statutory regulator of Saccos, denied the violations, asserting that it issued a notice to show cause on 9th December 2016, considered the petitioner's written response of 10th January 2017, and on 2nd February 2017 directed his removal and prohibition under section 51(c) of the Sacco Societies Act and Regulations 66, 67 and 72 of the 2010 Regulations. The respondents also objected that the petitioner had a parallel suit before the Co-operatives Tribunal (Case No. 30 of 2017) and had failed to exhaust statutory remedies, including an appeal to the Cabinet Secretary. The court framed four issues: jurisdiction, prematurity, constitutional violations and remedies. It held it had jurisdiction over the removal as an employment matter, with the FOSA claim brought in under accrued or consequential jurisdiction. However, the petition was premature because the petitioner had not appealed his removal to the Minister under regulation 72(8). On the merits, the court found the regulator accorded the petitioner a hearing and exercised its statutory powers lawfully; removal required justifiable reasons, not proof of guilt. The petition was dismissed with costs.

Key legal issues

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01

Jurisdiction of the ELRC versus the Co-operatives Tribunal

Holding

The court has jurisdiction over the removal of the petitioner as CEO because it is an employment matter; the frozen FOSA savings claim is consequential to the removal and falls within accrued or consequential jurisdiction.

Reasoning

The petitioner was an employee, so his suspension, resignation and removal are employment matters for the ELRC. Although the frozen FOSA deposits alone would belong to the Co-operatives Tribunal, their close nexus to the suspension, removal and prohibition from holding Sacco office brings them within the court's accrued or consequential jurisdiction.

p. 10
02

Prematurity of the petition

Holding

The petition was prematurely brought because the petitioner did not appeal his removal to the Minister/Cabinet Secretary as required by regulation 72(8).

Reasoning

Regulation 72(8) provides for an appeal to the Minister by a person aggrieved by a removal order. The respondent raised the point and the petitioner did not refute or justify the failure to appeal, so the court assumed no appeal was filed. Statutory interlocutory steps must be exhausted before coming to court.

p. 10
03

Alleged violation of articles 27(1), 47(1) and 50(2) of the Constitution

Holding

No constitutional violation was established; the 1st respondent lawfully exercised its statutory supervisory powers after notifying the petitioner and considering his response.

Reasoning

The 1st respondent, a statutory supervisor of Saccos, issued a notice to show cause listing the allegations, the petitioner replied, and the respondent then exercised its statutory removal powers. The petitioner did not show how the exercise of lawful powers violated his rights; removal as an employee can be for justifiable reasons not requiring proof of guilt.

p. 11

Legal principles established

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  • Where a statute or regulation prescribes an interlocutory step such as an appeal to the Minister before filing suit, that step must be taken before the suit is filed.
  • An employee may be removed for justifiable reasons which need not reach the threshold of guilt but must be reasons for which a reasonable employer would remove the employee.

Court orders

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  1. 1.The petition is dismissed with costs

Authorities

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Legislation

  • Constitution of KenyaArticle 27(1)
  • Constitution of KenyaArticle 47(1)
  • Constitution of KenyaArticle 50(2)(f),(g),(k)
  • Sacco Societies Act (Cap 490B)Section 51(c) / 51(a)
  • Sacco Societies (Deposit-taking Sacco Business) Regulations, 2010Regulations 66, 67, 72 (incl. 72(3), 72(6), 72(8))
  • Co-operative Societies ActNot specified

Cases cited (2)

  • Stephen Muchuki Kiunga vs Nkuru M’tunichu & 2 others
    [2013] eKLR
  • JSC Vs Gladys Boss Shollei & another
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment dispute (removal of a CEO) - accrued or consequential jurisdiction

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, "Awuor v Telepost Co-operative Sacco Society Limited & another (Petition 109 of 2017) [2019] KEELRC 2559 (KLR)", Case Analysis (2019). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2559/eng@2019-05-24

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