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)
The bottom line
#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
#Executive summary
#Key legal issues
#Whether a retired employee re-engaged on fixed-term contracts was entitled to loyalty service pay under the 2016/2017 CBA
No - the CBA post-dated his retirement and the fixed-term contract was independent of pre-retirement employment
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.
Interpretation of the clause 'all other terms and conditions of service remain as per your earlier letter of appointment' in the renewal contracts
It referred to the fixed-term contract dated 10th March 2014, not the pre-retirement letter of appointment
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.
Whether deduction of union dues bound the Respondent to the 2016/2017 CBA
No; the argument was not tenable
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.
Legal principles established
#- 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
#- 1.The trial court's award of loyalty service pay of Kshs.478,762/- is set aside
- 2.Each party to bear their own costs of the lower court proceedings and of the appeal
- 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.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
#Practical implications
#Frequently asked questions
#Cite this brief
#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.