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ELRCDismissedCause No E009 of 2021· [2023] KEELRC 1606 (KLR)

Local Authorities Provident Fund Board v County Government of Migori & another (Cause E009 of 2021) [2023] KEELRC 1606 (KLR)

Employment and Labour Relations Court
6 July 2023
CBC. N. Baari
1,390 words in judgment
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The bottom line

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Kenya's Employment Court confirmed it can hear pension schemes' claims against employers who fail to remit deducted retirement contributions.

What this practically means

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Executive summary

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This ruling by the Employment and Labour Relations Court at Kisumu (C. N. Baari J) determines a Notice of Preliminary Objection dated 1st April 2022 by which the Respondents sought striking out of the Claimant's suit as incompetent, bad in law and an abuse of process, contending that the claim did not arise from an employer-employee relationship and that the Court therefore lacked jurisdiction. The Claimant, a pension scheme, replied through David Koross that the Kshs. 1,006,098,350.09 claimed was collected by the 2nd Respondent from employees of the 1st Respondent but never remitted to the Scheme since 13th April 2013, and that such deductions arise directly from the employer-employee relationship. The Court framed a single issue: whether it was clothed with jurisdiction. Relying on Owners of Motor Vessel Lilian 'S' and Samuel Kamau Macharia on the centrality and source of jurisdiction, and on Article 162(2) of the Constitution and Section 12(1) of the ELRC Act, the Court acknowledged that the Claimant is neither employer nor employee. However, applying the Supreme Court's decision in Albert Chaurembo Mumba that the core of a pension scheme is the employer-employee relationship, and following Sarah Mang'oli v KEMRI that unremitted pension claims fall within employment disputes, the Court held the claim squarely within its jurisdiction. The Preliminary Objection was dismissed with costs on 6th July 2023.

Key legal issues

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01

Whether the ELRC has jurisdiction over a pension scheme's claim for unremitted employee deductions

Holding

The claim is a dispute arising out of employment between an employer and an employee and is squarely within the Court's jurisdiction.

Reasoning

The Court accepted that the Claimant is neither an employer nor an employee, but adopted the Supreme Court's holding in Albert Chaurembo Mumba that a pension scheme's core is the employer-employee relationship. The sums claimed were deducted by the employer from employees' salaries under the Local Authority Provident Fund Act and the Employment Act, so the dispute arises out of employment under Section 12(1)(a) of the ELRC Act.

p. 4

Legal principles established

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  • At the core of a pension scheme is a relationship between an employer and an employee, so a scheme's claim for unremitted deductions falls within ELRC jurisdiction under Article 162(2) and Section 12(1) of the ELRC Act.

Court orders

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  1. 1.The Respondents' Preliminary Objection dated 1st April 2022 is dismissed
  2. 2.Costs awarded to the Claimant

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2), 162(3)
  • Employment and Labour Relations Court ActSection 12(1)(a)
  • Employment ActSection 19(1), 17(1)
  • County Government ActSection 132
  • Local Authority Provident Fund ActSections 8(1), 8(3), 9(1)

Cases cited (4)

  • Owners of Motor Vessel Lilian "S" v Caltex Oil
    [1989] eKLR
  • Samuel Kamau Macharia vs. KCB & 2 Others, No. 2 of 2011
    [2012] eKLR
  • Albert Chaurembo Mumba & 7 others v Maurice Munyao & 148 others
    [2019] eKLR
  • Sarah Mang'oli v Kenya Medical Research Institute & Another
    [2020] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution and Section 12(1) 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, "Local Authorities Provident Fund Board v County Government of Migori & another (Cause E009 of 2021) [2023] KEELRC 1606 (KLR)", Case Analysis (2023). Cause No E009 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1606/eng@2023-07-06

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