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ELRCPartially AllowedMemorandum of Appeal dated 11th October 2023 (ELRC Appeal, Nakuru)· [2025] KEELRC 823 (KLR)

Automobile Association (AA) of Kenya (Through Jinaro Kipkemoi Kibet-Chairman Milcah Mugo- Vice Chairman Erastus Mwongera- Secretary David Kinyua - Treasurer) v Njoroge (Employment and Labour Relations Appeal E028 of 2023) [2025] KEELRC 823 (KLR)

Employment and Labour Relations Court
14 March 2025
2,690 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Employment Court ruled a retired employee rehired on fixed-term contracts cannot claim loyalty pay under a CBA signed after his retirement.

What this practically means

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Executive summary

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The Appellant employer appealed against a judgment of Principal Magistrate K. Kibelion delivered on 21st September 2023 awarding the Respondent, a former driving school instructor, loyalty service pay of Kshs.478,762/00 under the 2016/2017 CBA between the Appellant and the Kenya Long Distance Truck Drivers and Allied Workers Union. The Respondent was employed in 1995, retired in February 2014, and was re-engaged on fixed-term contracts from 1st March 2014 until 31st December 2017. The appeal was disposed of by written submissions. The Appellant argued that the Respondent served only three years and ten months post-retirement, was not covered by the 2016/2017 CBA, and that the renewal letters' reference to 'earlier letter of appointment' meant the 10th March 2014 contract. The Respondent maintained his service was continuous, union dues were deducted throughout, and the CBA covered him. The court, guided by Peters v Sunday Post on the first appellate duty to re-evaluate evidence, and National Bank of Kenya v Pipe Plastic Samkolit on contractual bindingness, held that the 2016/2017 CBA could not apply retrospectively to a person who retired in 2014, that union dues deductions did not extend the CBA to a retiree, and that the post-retirement contract was an independent fixed-term contract untied to pre-retirement terms. The appeal was allowed; the Kshs.478,762/- loyalty award was set aside. Each party to bear their own costs of the lower court and the appeal. The court conditionally indicated an award of severance pay of 20 days per year up to 2014 absent proof of a pension scheme, and directed a mention on 29th May 2025 for the Appellant to prove whether a pension fund existed.

Key legal issues

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01

Whether a retired employee re-engaged on fixed-term contracts was entitled to loyalty service pay under the 2016/2017 CBA

Holding

No - the CBA post-dated his retirement and the fixed-term contract was independent of pre-retirement employment

Reasoning

The Respondent retired in February 2014 and was re-engaged on a one-year fixed contract dated 10th March 2014 which did not incorporate earlier appointment terms. The renewal letters referred to the 2014 contract, not pre-retirement employment. A CBA effective 2016-2017 cannot apply to a person who retired in 2014, and continued deduction of union dues does not extend CBA benefits to a retiree.

p. 5
02

Interpretation of the clause 'all other terms and conditions of service remain as per your earlier letter of appointment' in the renewal contracts

Holding

It referred to the fixed-term contract dated 10th March 2014, not the pre-retirement letter of appointment

Reasoning

The court read the renewal and extension letters (18th February 2015, 26th January 2017, 22nd August 2017) as referring back to the first post-retirement fixed contract. The post-retirement contract was an independent fixed-term agreement and could not be assumed to be tied to pre-retirement employment terms.

p. 5
03

Whether deduction of union dues bound the Respondent to the 2016/2017 CBA

Holding

No; the argument was not tenable

Reasoning

The court rejected the submission that continued deduction of union dues evidenced coverage by the CBA, holding that a CBA entered into after retirement does not cover a person who had already retired from formal employment.

p. 5

Legal principles established

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  • A court cannot rewrite a contract between parties; parties are bound by their terms unless coercion, fraud or undue influence are pleaded and proved
  • A first appellate court must re-evaluate the evidence and draw its own conclusions while allowing for the trial court's advantage of seeing witnesses

Court orders

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  1. 1.The trial court's award of loyalty service pay of Kshs.478,762/- is set aside
  2. 2.Each party to bear their own costs of the lower court proceedings and of the appeal
  3. 3.Case to be mentioned on 29th May 2025 for the Appellant to provide proof whether there was a Pension fund in favour of the Respondent or not
  4. 4.Severance pay of 20 days' pay per year worked up to 2014 to be awarded absent proof of a pension scheme
On appeal from
Magistrates' Court (Principal Magistrate)
null
Jurisdiction invoked
First appellate jurisdiction over the trial magistrate's judgment (declared appeal disposed of by written submissions); Civil Procedure Act section 78 referenced

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, "Automobile Association (AA) of Kenya (Through Jinaro Kipkemoi Kibet-Chairman Milcah Mugo- Vice Chairman Erastus Mwongera- Secretary David Kinyua - Treasurer) v Njoroge (Employment and Labour Relations Appeal E028 of 2023) [2025] KEELRC 823 (KLR)", Case Analysis (2025). Memorandum of Appeal dated 11th October 2023 (ELRC Appeal, Nakuru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/823/eng@2025-03-14

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