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ELRCDismissedNot stated in the judgment as provided· [2020] KEELRC 587 (KLR)

Alice Okallo v Kenya Medical Research Institute & another [2020] KEELRC 587 (KLR)

Employment and Labour Relations Court
30 July 2020
HWHellen Wasilwa
1,357 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court confirmed it can hear claims against employers who deduct pension money from salaries but fail to remit it.

What this practically means

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Executive summary

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The Respondents filed a Preliminary Objection dated 7/10/2019 and an application dated 2/3/2020 seeking to strike out the Claimant's suit, or alternatively her pension claim, for want of jurisdiction, with costs. The Applicants, the former employer and the manager of its Staff Pension & Life Scheme, argued that the Claimant, a former employee, was pursuing a pension dispute regulated by the Retirement Benefits Act, 1997, whose dispute-resolution mechanisms (Sections 46-49) she had not exhausted, and that the ELRC lacked jurisdiction since she was no longer an employee. The Claimant opposed, contending the claim concerned pension contributions deducted from her salary but never remitted to the scheme, amounting to KShs. 3,748,754.03 as at 30/6/2018, and that it arose from her contract of employment, not from the scheme. She also explained her continued occupation of staff quarters pending settlement of her dues. Justice Hellen Wasilwa accepted that pure pension scheme disputes between a member and a scheme's manager, administrator, custodian or trustee fall to the Retirement Benefits Appeals Tribunal under Sections 46-49. However, the Court distinguished the authorities cited because the Claimant's complaint was the employer's failure to remit deductions - a breach of the employment contract, not a scheme dispute. The Preliminary Objection was dismissed, the claim was directed to proceed before the ELRC, and costs were ordered to be in the cause.

Key legal issues

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01

Jurisdiction of the ELRC over claims for unremitted pension contributions

Holding

The Court has jurisdiction because the dispute is a breach of the employment contract by the employer, not a scheme-membership dispute governed by the Retirement Benefits Act's dispute-resolution mechanism

Reasoning

The Court accepted that pension scheme disputes between a member and a manager, administrator, custodian or trustee fall under Sections 46-49 of the Retirement Benefits Act and the Retirement Benefits Appeals Tribunal. However, the Claimant's complaint was that her employer deducted pension contributions from her salary and failed to remit them to the scheme. That complaint originates in the contract of employment and is distinguishable from authorities where the dispute emanated from failures of the pension scheme administrator.

p. 3

Legal principles established

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  • The ELRC has jurisdiction over a claim by an employee that the employer failed to remit pension contributions deducted from salary, because such a claim arises from the contract of employment rather than from a dispute within the pension scheme under Sections 46-49 of the Retirement Benefits Act

Court orders

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  1. 1.The Preliminary Objection on the Court's jurisdiction is dismissed
  2. 2.The claim proceeds before this Court
  3. 3.Costs in the cause

Authorities

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Legislation

  • Retirement Benefits ActSections 46, 47, 46-49
  • Employment and Labour Relations Court ActSection 12

Cases cited (7)

  • Albert Chaurembo Mumba & 7 Others vs. Maurice Munyao & 148 Others
    [2019] eKLR
  • Samuel Kamau Macharia & Another vs. KCB & 2 Others
    [2012] eKLR
  • Staff Pension Fund & Kenya Commercial Bank Staff Retirement (DC) Scheme 2006 & Another vs. Ann Wangui Ngugi & 524 Others
    [2018] eKLR; Court of Appeal Civil Appeal 20 of 2017
  • Geoffrey Muthinja & Another vs. Emmanuel Muguna Henry & 1756 Others
    [2015] eKLR
  • Bethwell Allan Omondi Okal vs. Telkom (K) Limited (Founder) & 9 Others
    [2017] eKLR
  • Abdullahi Ali Mohammed vs. Kenya Ports Authority & Another
    [2016] eKLR
  • Betty U Chamba vs. Kenya Ports Authority & Another
    [2019] eKLR
Jurisdiction invoked
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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Cite this brief

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Cite this brief

Caselaw, "Alice Okallo v Kenya Medical Research Institute & another [2020] KEELRC 587 (KLR)", Case Analysis (2020). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/587/eng@2020-07-30

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