Thelocal Authorities Provident Fund Board v County Government of Mombasa & another (Cause E047 of 2021) [2023] KEELRC 2303 (KLR)
The bottom line
#Kenya's Employment Court struck out LAPFUND's Kshs 2.5 billion pension claim against Mombasa County because affected employees were not joined as parties.
What this practically means
#Executive summary
#Key legal issues
#Whether the claimant has standing to claim unremitted employee contributions without joining the contributor employees
The claimant lacks standing; the 'contributor' is the employee and without the employee the tripartite claim cannot hold, rendering the claim a commercial dispute outside the ELRC's jurisdiction.
The court held that retirement contributions relate to an employment relationship, but the employees - the 'contributors' under Section 2 of the LAPFUND Act - were not parties. Without particulars of any beneficiary, and given employment dynamics such as recruitments, exits, deaths and retirements, a general call to remit a lump sum without recourse to the affected employees negates the claim entirely.
Whether the respondents' procedural objections to the claim and verifying affidavit had merit
The objections were overtaken by events; no objection was raised under Rule 14(5) until the hearing stage, and the respondents sat back despite filing their Notice of Preliminary Objections.
Under Rule 14(5) of the ELRC (Procedure) Rules, 2016 a party may object to a pleading by notice except for want of form. The respondents were served but raised no objection until hearing. Further, under Sections 10(6) and (7), 73, 74 and 75 of the Employment Act the legal duty to file work records rests on the employer, so the claimant's reliance on its statement of account could have been addressed by an application for production of records.
Whether the court should issue a general order for remittance of a lump sum
No; courts do not issue orders in vain and unenforceable general orders cannot issue.
The claim lacked evidence of employee records, the identity of contributors, or those whose benefits were paid. Citing Trusted Society of Human Rights Alliance, the court held that litigation is lost if orders are unenforceable against respondents, so a general order for remittance of Kshs. 2,586,515,277.74 could not issue.
Legal principles established
#- A statutory fund cannot sue an employer for non-remittance of employee contributions where the contributor employees are not parties; such a claim is a commercial dispute outside the ELRC's jurisdiction.
- Courts should not issue orders without any possible chance of enforcement; orders must not issue in vain.
Court orders
#- 1.The claim that the respondents should be ordered to remit Kshs. 2,586,515,277.74 is struck out
- 2.Each party to bear own costs
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution read together with the Employment and Labour Relations Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Thelocal Authorities Provident Fund Board v County Government of Mombasa & another (Cause E047 of 2021) [2023] KEELRC 2303 (KLR)", Case Analysis (2023). Cause No E047 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2303/eng@2023-09-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.