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Mulwa v African Medical and Research Foundation (Cause 414 of 2012) [2023] KEELRC 1947 (KLR)

Employment and Labour Relations Court
28 July 2023
485 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~2 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that an employee who retired, rather than being made redundant, cannot claim severance pay if their contract expressly excludes retiring staff.

What this practically means

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Executive summary

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This is a ruling of the Employment and Labour Relations Court at Nairobi delivered by Abuohha J on July 28, 2023, resolving whether a former employee (the claimant) is entitled to severance pay. The dispute arose from earlier rulings: on February 3, 2017 the court found that the claimant's services were not terminated in 2010, that the employer could assign him duties within a sister or subsidiary company, and that he worked until retirement in 2015, drawing salary and allowances from the respondent. The court also observed that clause 19 of the September 27, 2002 service agreement appeared to make severance pay payable on retirement, but misquoted the clause as applying 'in exceptional cases' instead of 'in exception of cases'. Counsel for the respondent moved for review by application dated February 15, 2017, and the court acknowledged and corrected the error under rule 33 of the court's rules, allowing the review. The parties diverged: the claimant's counsel (Mrs. Wetende) contended the review order meant no severance pay was due, while Mr Imanyara maintained his client was declared redundant and entitled to severance pay. The court held that, properly construed, clause 19 excepts a retiring employee from severance pay, and since the claimant retired rather than being declared redundant, he cannot claim severance pay. It is so ordered.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the claimant, having retired rather than been declared redundant, is entitled to severance pay under clause 19 of the service agreement of September 27, 2002

Key legal issues

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01

Entitlement to severance pay upon retirement under clause 19 of the service agreement

Holding

The claimant, who retired in 2015 rather than being declared redundant, falls within the exception in clause 19 and cannot claim severance pay; the earlier ruling's contrary statement rested on a misreading of clause 19 and was corrected on review.

Reasoning

The court's ruling of February 3, 2017 erroneously rendered clause 19's phrase 'in exception of cases' as 'in exceptional cases', altering its meaning. On the respondent's application dated February 15, 2017, the court corrected the error under rule 33. Properly read, clause 19 denies severance pay to a retiring employee; the court had already found the claimant was not declared redundant but continued in employment until retirement, drawing salary and allowances from the respondent.

p. 2

Legal principles established

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  • An employer may assign an employee duties at any site provided those are the duties the employee contracted to perform, including within a sister or subsidiary company.
  • Where clause 19 of the service agreement excepts retiring employees from severance pay, an employee who retires cannot claim severance pay.

Court orders

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  1. 1.Declaration that the claimant, having retired, was excepted from payment of severance pay under clause 19 of the service agreement and cannot claim the same ('It is so ordered.')

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Rule 33 of the Employment and Labour Relations Court (Procedure) Rules (review/correction of the court's own ruling)

Relief refused

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Claim to severance pay

Clause 19 of the service agreement excepted a retiring employee from payment of severance pay; the claimant retired in 2015 and was not declared redundant

p. 2

Costs

No costs order recorded in the judgment

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The consequence therefore is that the claimant having retired was excepted from payment of severance pay as per clause 19 of the service agreement hence cannot claim the same. It is so ordered.
p. 2Final orders - denial of severance pay to a retiring employee
An employer has the discretion to assign an employee duties at any site provided the duties to be performed are those which the employee contracted to perform.
p. 1Employer's discretion over deployment of employees
The court acknowledged the error and exercising it’s powers under rule 33 of the court’s rules corrected the error.
p. 2Correction of the court's own error on review

Issues in the judgment

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material

The judgment does not state the parties' full names, the case number or the petition/suit reference; the claimant is never named.

minor

The opening numbered paragraphs 1 and 2 appear empty/truncated, so the context of the suit is not fully set out.

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, "Mulwa v African Medical and Research Foundation (Cause 414 of 2012) [2023] KEELRC 1947 (KLR)", Case Analysis (2023). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1947/eng@2023-07-28

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