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ELRCDismissedNot stated in judgment (formerly subject of Civil Appeal No. 129 of 2017, Court of Appeal)· [2024] KEELRC 1931 (KLR)

Ringo v Kenya Railways Corporation (Cause 1585 of 2013) [2024] KEELRC 1931 (KLR)

Employment and Labour Relations Court
26 July 2024
3,053 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 dismissed a former Kenya Railways employee's KShs 17.5 million claim because he filed it seven years too late, after his employment transferred to another company.

What this practically means

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Executive summary

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The Claimant, a former Employee of Kenya Railways Corporation, claimed Kshs. 17,567,537 in salary arrears, house and other allowances, service pay, golden handshake, transport allowance and pension, contending that the Respondent wrongfully transferred his services to Rift Valley Railways under a 2006 Concession Agreement instead of interdicting him over pending disciplinary matters, and that unpaid retrenchment dues kept him an Employee of the Respondent. The Respondent admitted the Concession and transfer but maintained the Claimant's contract terminated on his acceptance of employment with the Concessionaire on fresh terms, that he was paid his retrenchment package under the Inter-Ministerial Committee's recommendations, and that the Claim, filed in 2013, was hopelessly out of time. The Claimant had earlier had the Claim dismissed for limitation, but the Court of Appeal in Civil Appeal No. 129 of 2017 directed the limitation issue be determined afresh at trial. The Court held that transfer of service terminated the Claimant's contract with the Respondent on 30th October 2006; that there was no provision for reversion to the Respondent after Rift Valley Railways terminated his probationary contract on 15th December 2006; that the Inter-Ministerial Committee's extension of retrenchment benefits was a collective extra-legal remedy that did not revive his claims; that the Claim was time-barred under Section 87 of the Kenya Railways Corporation Act and the six-year period in the Limitation of Actions Act; and that the pension claim lay against the Scheme Trustees under the Retirement Benefits Act, not the Respondent. The Claim was declined with no order on costs, delivered on 26th July 2024 by James Rika, Judge.

Key legal issues

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01

Limitation of actions

Holding

The Claim was time-barred both under Section 87 of the Kenya Railways Corporation Act (12 months) and the Limitation of Actions Act (6 years for contract claims)

Reasoning

Employment with the Respondent ceased on transfer of service on 30th October 2006. Grievances had to be brought within 12 months under Section 87 of the Kenya Railways Corporation Act or 6 years under the Limitation of Actions Act. The Claim was only instituted in 2013, 7 years after employment ceased, depriving the Court of temporal jurisdiction.

p. 5
02

Effect of transfer of service on the contract of employment

Holding

The Claimant's contract with the Respondent was terminated upon transfer of service to Rift Valley Railways on 30th October 2006

Reasoning

The Concession Agreement provided for transfer of employees who would receive letters of employment from Rift Valley Railways on terms no less favourable. On accepting the appointment as Principal Accountant effective 1st November 2006, the Claimant ceased to be the Respondent's employee and became subject to fresh terms set by the Concessionaire.

p. 4
03

Reversion to the Respondent after termination by the Concessionaire

Holding

There was no provision in the Concession Agreement for reversion of transferred employees, and no evidence the Claimant reverted to the Respondent

Reasoning

The Claimant had not been seconded but transferred on fresh terms; termination of his probationary contract by Rift Valley Railways ended his employment. The Inter-Ministerial Committee's extension of retrenchment packages to all who exited within 3 years was a collective benefit, not evidence of reversion to the Respondent's employment.

p. 5
04

Pension claims and proper forum

Holding

The pension claim was misdirected; liability for computation and payment rests with the Scheme Trustees under the Retirement Benefits Act, not the Respondent

Reasoning

Following the Court of Appeal's advice in the earlier judgment between the parties and the Supreme Court's decision in Albert Chaurembo Mumba, pension disputes are not employer-employee disputes for the E&LRC but disputes between Trustees and Beneficiaries to be pursued under the Retirement Benefits Act.

p. 7
05

Payment of retrenchment and terminal dues

Holding

The Claimant received his entitlements: Kshs. 310,891 in 2009 and Kshs. 431,886 in 2015, including severance, golden handshake and transport allowance

Reasoning

The Respondent's Finance Manager's letter of 7th September 2018 recorded payments including severance based on 10 years' service at Kshs. 283,100, golden handshake at Kshs. 120,000 and transport allowance at Kshs. 10,000, with a further refundable retainer of Kshs. 100,000 awaiting clearance forms the Claimant never completed.

p. 7

Legal principles established

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  • Transfer of service under a concession agreement terminates the employee's contract with the original employer; the employee begins a fresh contract with the new employer on a clean slate
  • Non-payment of terminal dues does not extend or revive a terminated contract of employment
  • Pension disputes are not employer-employee disputes for the E&LRC but disputes between Trustees and Beneficiaries of a Pension Scheme, to be pursued under the Retirement Benefits Act
  • An extra-legal government mechanism such as an Inter-Ministerial Committee offering retrenchment benefits does not revive terminated employment claims

Court orders

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  1. 1.The Claim is declined
  2. 2.No order on the costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and its Procedural Rules (Rule 21 of the Court's Procedural Rules applied); limitation considered under Section 87 of the Kenya Railways Corporation Act and the Limitation of Actions Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ringo v Kenya Railways Corporation (Cause 1585 of 2013) [2024] KEELRC 1931 (KLR)", Case Analysis (2024). Not stated in judgment (formerly subject of Civil Appeal No. 129 of 2017, Court of Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1931/eng@2024-07-26

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