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ELRCDismissedNot stated in the judgment

Nyaga & 14 others v Laptrust (Umbrella) Retirement Fund Board of Trustees & 2 others (Cause 1849 of 2017) [2024] KEELRC 2669 (KLR)

Employment and Labour Relations Court
31 October 2024
2,098 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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The Employment Court dismissed 14 former council workers' Kshs. 93.7 million claim because they waited until retirement to complain and couldn't prove their case.

What this practically means

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Executive summary

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Fourteen former employees of the defunct Nairobi City Council, who worked in the water department, sued the 3rd Respondent (the entity incorporated in 2004 which took over water and sewerage functions) alleging that on transfer of their services they were demoted, paid inferior salaries and allowances, and denied salary increments under CBAs covering 2005-2015, and claiming Kshs. 93,696,902 in underpayments and arrears, general damages, costs and interest. The 1st and 2nd Respondents had been discharged by amendment in 2021. The 3rd Respondent contended that most claims were time-barred, that it was a new employer with different job classifications entitled to evaluate and place employees, and that all CBAs had been implemented by retirement. The court held that although the 2004 transfer agreement made the 3rd Respondent a successor employer obliged to retain seniority and remuneration, the Claimants failed to prove demotion or inferior terms; the sampled career histories showed substantial salary growth. The CBA limb was wholly unsubstantiated, as the CBAs were not exhibited and the Claimants' Trade Union, which authored them, was neither party nor witness. Most claims were found time-barred, the Claimants having waited until retirement to complain. The transfer agreement also stipulated arbitration for disputes over inferior terms. The claim was dismissed with no order on costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Claimants were demoted upon moving from the Nairobi City Council to the 3rd Respondent
  2. 2.Whether the Claimants are owed and should be paid arrears of salaries arising from such demotion and non-implementation of a series of CBAs concluded between the 3rd Respondent and the Claimants' Trade Union

Key legal issues

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01

Whether the Claimants were demoted upon transfer from the Nairobi City Council to the 3rd Respondent

Holding

Not established; the evidence showed career progression and salary increases after transfer

Reasoning

The 2004 transfer agreement obliged the 3rd Respondent, as successor employer, to retain transferred staff's rights, seniority and remuneration. However, the sampled career histories of the lead claimants showed salary growth and improved grades after transfer. The Claimants did not establish disadvantage, demotion, loss of seniority or inferior remuneration.

p. 4
02

Whether arrears arise from non-implementation of CBAs covering 2005-2015

Holding

No arrears established; CBA increments were reflected in pay slips and the claim was unsubstantiated

Reasoning

The CBAs themselves were not exhibited and no unpaid CBA obligations were demonstrated. The lead witness conceded salary increments exceeding 50% over about 8 years, and the Respondent's witness confirmed CBA payments were made and captured in pay slips. The Trade Union that authored the CBAs was neither party nor witness.

p. 5
03

Limitation - whether claims made outside the statutory period of 3 years are time-barred

Holding

Most of the claims appear time-barred, the Claimants having waited until retirement to sue

Reasoning

The Claimants accepted the new contracts and worked under them without complaint for years after the 2004 transfer, raising grievances only upon retirement. The court held grievances should have been raised at or soon after transfer per statutory timelines, and that most claims appear time-barred as submitted by the Respondent.

p. 4
04

Whether disputes over dishonour of the transfer agreement were referable to arbitration

Holding

The transfer agreement stipulated that disputes over inferior terms be resolved through arbitration

Reasoning

The court noted that if the 3rd Respondent dishonoured the transfer agreement by offering inferior terms, the agreement stipulated arbitration as the dispute resolution mechanism, undermining the suit as framed. The parties to the transfer agreement and CBAs were necessary parties or witnesses.

p. 5

Legal principles established

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  • A transferee employer under a transfer agreement that mandates retention of seniority and remuneration is a successor employer and cannot offer transferred employees inferior terms and conditions of employment
  • A transferred employee who accepts new contracts and works without complaint until retirement, challenging terms many years later, risks having the claim declared time-barred
  • A claimant asserting non-implementation of a CBA negotiated by a trade union should join the union or its evidence, as the union authored the CBA and claims of non-implementation cannot rest on the beneficiaries alone

Court orders

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  1. 1.The Claim is declined
  2. 2.No order on the costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court (employment claim arising from transfer of employees from the defunct Nairobi City Council to the 3rd Respondent)

Relief refused

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Declaration that the 3rd Respondent's refusal to pay superior rates on transfer and salary arrears under the CBAs was unconstitutional, illegal, null and void

The Claimants did not establish demotion or inferior terms on transfer

Underpayments and salary arrears of Kshs. 93,696,902 arising from un-implemented CBAs

Wholly unsubstantiated; CBAs not placed before the Court

p. 5

General damages, costs and interest

The Claim as a whole was found to have no merit

p. 5

Costs

No order on the costs (each party to bear own costs implied by 'No order on the costs')

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It is ordered: a. The Claim is declined. b. No order on the costs.
p. 5Final orders/disposition
While the 3rd Respondent was a new Employer as pleaded, it was also, a Successor Employer.
p. 4Successor employer doctrine on transfer of undertakings
If the terms ofiered by the 3rd Respondent were inferior, the time to raise the grievance, and approach the Court, was at the time of transfer, or soon thereafter, in accordance with the timelines prescribed by the law.
p. 4Limitation and delay in raising employment grievances
They Claimants were merely beneficiaries, of the CBAs, not the authors, and would only be in a position to give substandard evidence to the Court, with regard to a document they did not author or execute.
p. 5Evidential weight of beneficiaries of CBAs without the union
The parties in, and authors of, the transfer agreement and CBAs relating to the Claim, were necessary parties or witnesses, in establishing the Claim.
p. 5Necessary parties
The Claim has no merit.
p. 5Overall finding on the claim

Issues in the judgment

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minor

The judgment does not state the case file number, neutral citation, or the full name of the parties/3rd Respondent; the 3rd Respondent is referred to only by role

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, "Nyaga & 14 others v Laptrust (Umbrella) Retirement Fund Board of Trustees & 2 others (Cause 1849 of 2017) [2024] KEELRC 2669 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2669/eng@2024-10-31

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