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ELRCStruck OutELRC Cause at Nakuru (statement of claim dated March 4, 2022)· [2023] KEELRC 1977 (KLR)

Local Authorities Provident Fund Board v County Government of Narok & another (Cause E008 of 2022) [2023] KEELRC 1977 (KLR)

Employment and Labour Relations Court
31 July 2023
4,104 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court struck out LAPFUND's KES 1 billion claim against Nakuru County, holding only the High Court can hear such debt disputes.

What this practically means

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Executive summary

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LAPFUND, a statutory provident fund for local authority employees, sued the County Government of Nakuru and an officer of the county claiming over Kes 1.01 billion in unremitted statutory contributions deducted from employees' earnings, and sought an order for future remittances under Section 8(3) of the Local Authorities Provident Fund Act, plus costs and interest. The Respondents, who entered appearance but filed no defence, raised a preliminary objection contending that the ELRC lacked jurisdiction under Section 12 of the ELRC Act because there was no employer-employee relationship between the parties and the Claimant fit none of the categories entitled to lodge claims in the court. The court identified the single main issue as its own jurisdiction. It reviewed the contested jurisprudence between the liberal, purposive approach (including Majanja J's LAPFUND v Kisii County Government decision) and the restrictive Court of Appeal line in National Social Security Fund Board of Trustees v Kenya Tea Growers Association and in the appeals from Nderitu J's own Nakuru rulings, which bind this court and restrict ELRC jurisdiction to the parties and matters expressly listed in Section 12. Finding uncontested that no employer-employee relationship existed, that the employees were not parties, and that LAPFUND was neither a trade union nor an employers' organization, the court held the claim - essentially enforcement of a statutory and contractual obligation - belonged in the High Court. Following the Supreme Court in Albert Chaurembo and Phoenix of EA Assurance, it declined to transfer the cause, holding a court without jurisdiction cannot transfer. The cause was struck out with each party bearing its own costs.

Key legal issues

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01

Whether the ELRC has jurisdiction over a claim by LAPFUND against a county government for non-remittance of provident fund contributions

Holding

The court has no jurisdiction; the dispute is not between employer and employee and the Claimant does not fall within Section 12 categories

Reasoning

The court found there is no employer-employee relationship between the Claimant and the Respondents, the employees are not parties, and the Claimant is neither a trade union nor an employers' organization. Following binding Court of Appeal decisions restricting ELRC jurisdiction to Section 12, the claim to enforce a statutory/contractual obligation falls outside the court's jurisdiction and belongs in the High Court.

p. 7
02

Whether a court without jurisdiction may transfer the cause to a competent court

Holding

No; a court without jurisdiction cannot order transfer as that would sanitize an illegality

Reasoning

Following the Supreme Court in Albert Chaurembo and the Court of Appeal in Phoenix of EA Assurance, the court held that once it lacks jurisdiction it must down its tools; nothing is before it capable of transfer, so the cause is struck out rather than transferred to the High Court.

p. 8
03

Whether the preliminary objection was properly founded on law

Holding

Yes; the PO raised pure questions of law on jurisdiction

Reasoning

Applying the Mukisa Biscuits test, the court held that the objection was based purely on points of law (jurisdiction under Section 12 of the ELRC Act) discernible without calling evidence, and was therefore properly before the court for determination in limine.

p. 8

Legal principles established

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  • A preliminary objection must be based on pure points of law, not contested facts
  • A court without jurisdiction cannot order transfer of a cause to another court
  • The ELRC's jurisdiction is restricted to the parties and matters specifically provided for under Section 12 of the ELRC Act

Court orders

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  1. 1.A declaration that the cause is improperly before the court for lack of jurisdiction
  2. 2.The cause is struck out
  3. 3.Each party to meet own costs

Authorities

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Legislation

  • Local Authorities Provident Fund ActSection 8(3)
  • Employment and Labour Relations Court ActSections 3, 12; preamble
  • Constitution of KenyaArticles 22, 162(2), 258
  • Employment ActNot specified (provisions on work benefits, provident fund, gratuity, pension as terms of employment)

Cases cited (14)

  • Re: The Matter of Interim Independent Electoral Commission
    (2011) eKLR
  • Samuel Kamau Macharia & Another v Kenya Commercial Bank Limited & 2 Others
    (2012) eKLR
  • Albert Chaurembo Mumba & Others v Maurice Munyao & Others
    (2019) eKLR
  • Local Authorities Provident Fund Board (LAPFUND) v Kisii County Government
    (2018) eKLR
  • Amos O. Chuchu & Others v Retirement Benefits Authority & 2 Others
    (2015) eKLR
  • Samuel Oduar Okeyo v Postal Corporation of Kenya Staff Pension Scheme
    (2017) eKLR
  • Kirigiti Thathi-Ini Mugumo Water Co. Ltd v Kiambu Water & Sewerage Co. Ltd
    (2013) eKLR
  • Kenneth Odongo v Nakuru County Public Service Board & Others
    Nakuru ELRC Petition E016 of 2022 (2022) eKLR
  • Stephen Michael Oduor Ogutu v The Speaker, Nakuru County & Others
    Nakuru ELRC E17 of 2022 (2022) eKLR
  • Civil Appeal E136 of 2022 consolidated with E137 of 2022 (appeals from the above petitions)
  • National Social Security Fund Board of Trustees v Kenya Tea Growers Association & Others
    (2023) eKLR
  • Mukhisa Biscuits Manufacturing Co. Ltd v East End Distributors Ltd
    (1969) EA 696
  • Owners of the Vessel "Lillian S" v Caltex (K) Limited
  • Phoenix of EA Assurance Company Limited v M. Thiga t/a Newspapers Service
    (2019) 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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Cite this brief

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Cite this brief

Caselaw, "Local Authorities Provident Fund Board v County Government of Narok & another (Cause E008 of 2022) [2023] KEELRC 1977 (KLR)", Case Analysis (2023). ELRC Cause at Nakuru (statement of claim dated March 4, 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/1977/eng@2023-07-31

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