The term gross salary used in the Employment Act, 2007 as the remedy of compensation for unfair termination includes basic salary and any other allowances
Postal Corporation of Kenya v Andrew K Tanui
Civil Appeal 127 of 2015
Court of Appeal at Nairobi
P N Waki, D K Musinga, P O Kiage, JJA
July 19, 2019
Reported by Ian Kiptoo
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Employment Law– termination of employment – unfair termination – payment of compensation – where court awarded compensation of 12 months at the rate of the gross monthly salary – where the Employment Act did not define gross wages or gross salary – where Employment Act defined remuneration only – where gross salary terminology was used in the Act as the remedy of compensation for unfair termination - whether the term gross salary used in the Employment Act, 2007 as the remedy of compensation for unfair termination included basic salary and any other allowances – Employment Act, sections 17-25
Employment Law – termination of employment – gratuity – payment of – where employee was unfairly terminated – premature termination of an employment contract – where appellant committed to pay the respondent gratuity at the rate of 25% of basic salary earned - whether an employee that was unfairly terminated was entitled to payment of gratuity by an employer
Employment Law – termination of employment – gross misconduct – applicable procedure – required minimum standards - what were the minimum standards required for a hearing before termination on grounds of misconduct to be considered fair - Employment Act, section 41
Civil Practice and Procedure – damages – award of damages – award of damages in employment cases – where Employment Act provided considerations for a court to consider - whether a court ought to take into account the considerations under section 49 (4) of the Employment Act before making an award of damages for unfair termination – Employment Act, sections 49 (1) (c), (4)
The matter before the court was an appeal from the findings and orders of the High Court. The appellant challenged the decision of the trial court on grounds that gratuity by definition, was a reward given at the option of the employer and was not a contractual term; that the respondent was not entitled to payment of allowances as part of the award arising from the award of compensation of 12 months at the rate of the gross monthly salary; and that there was no obligation placed on the appellant by law to explain the charges to the employee, call evidence in showing the truthfulness of the allegations or allow the claimant the opportunity to question the employer’s witnesses. Such requirements did not exist. Furthermore, there was no statutory obligation for the employer to advise the employee on his right to be accompanied to the disciplinary hearing.
- Whether an employee that was unfairly terminated was entitled to payment of gratuity by an employer.
- Whether the term gross salary used in the Employment Act, 2007 as the remedy of compensation for unfair termination included basic salary and any other allowances.
- What were the minimum standards required for a hearing before termination on grounds of misconduct to be considered fair?
- Whether a court ought to take into account the considerations under section 49 (4) of the Employment Act before making an award of damages for unfair termination.
Relevant Provisions of the Law
“20. Itemised pay statement
(1) An employer shall give a written statement to an employee at or before the time at which any payment of wages or salary is made to the employee.
(2) The statement specified in subsection (1) shall contain particulars of -
(a) the gross amount of the wages or salary of the employee;
(b) the amounts of any variable and subject to section 22, any statutory deductions from that gross amount and the purposes for which they are made; and
(c) where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment".
- The trial court could not be faulted in the manner it evaluated the evidence on record. It was true that the initial letter of offer dated October 2, 2007 stated the gross salary as Sh.348, 000. However, when the claim was filed two years later in October 2009, the respondent stated his gross salary in paragraph 3 as Sh.355, 500. In his documents in support of the claim, he specified that there was airtime allowance paid to him at Sh.7, 500 per month, making the total Sh.355, 500. Indeed the salary slip attached to the claim by the respondent confirmed that figure, just as the oral evidence adduced by the respondent which was not challenged.
- The reason for not challenging it was obviously because the appellant had the employment records of the respondent and could have easily challenged the figure at any stage if there was no truth in it. But from the very beginning when filing its defence in January 2010, the appellant admitted paragraph 3 of the claim. Needless to say, parties were bound by their pleadings. It would therefore be idle to raise the issue at the stage, when in reality it was always a non-issue. The issue was raised without any factual or legal basis, and was therefore rejected.
- There was no reason to disturb the reasoning of the trial court on award of gratuity to the respondent. In the letter of appointment, the appellant committed to paying The appellant also reserved the right to terminate the contract prematurely. That did not mean that gratuity would not be payable just because the employer, out of its own choice, ended the contract. Proportionate gratuity would have been earned during the period and would be payable. The only reason why it would not be payable was where the employee was guilty of gross misconduct.
- The definitions of wages and allowances were different and they were not interchangeable. There was no definition of gross wages or gross salary in the Employment Act, 2007. The only definition was on remuneration which was the total value of all payments in money or in kind, made or owing to an employee arising from employment of that employee. The Act, nevertheless, used the terminology wages and salary interchangeably in Part IV of the Act - sections 17 to 25. In section 18, it referred to wages and allowances as separate payments upon termination of employment. But in prescribing the manner of payment of wages and salaries in section 20, the terminology gross wages was employed for the first time in the Act. Reference to wages, allowances, gross wages or gross salary were all separate elements of the remuneration of an employee. Interest in the case was gross monthly wage or salary which was the terminology used in the Act as the remedy of compensation for unfair termination.
- The construction that inclusive of allowances resonated with common sense. In common parlance, basic salary was the base income of an individual, the fixed part of one’s compensation package; while an allowance was the amount received by the employee for meeting service requirements. It was provided in addition to the basic salary and varied from employer to employer. Some employers could well offer allowances that were clearly predicated on actual performance of the contract but which did not form part of the gross salary of an employee.
- Gross salary would then be the amount calculated by adding up one’s basic salary and allowances, before deduction of taxes and other deductions. Each case had to be examined to identify the nature of the allowances given and whether they formed part of the gross salary. Therefore, gross wages or gross salary did include any allowances and was the same as the basic salary or basic wages.
- The focus of the charges laid against the respondent was his handling of the Postapay product, not his overall leadership of the appellant or the Finance and Strategy docket. But clearly, he laid evidence before the trial court that he applied himself to mitigating the enormous damage caused by those who had initiated and launched the product without due diligence. He showed that there was only so much he could do as an individual after advising on what needed to be done by the appellant as an institution. There was no allegation that he was involved in any stealing or pilfering of the appellant’s funds. On the contrary, he was involved in the process of automating the processes to ensure that there was no pilferage. The trial court, which saw and heard him, found him a trustworthy and credible witness. Therefore, there was no reason to doubt that assessment.
- The onus was on the appellant to show that the dismissal was justifiable after the response made by the respondent both in his documentary and oral evidence. The employer failed to sufficiently discharge the burden of proof placed on it, and there was no reason to disturb the findings of the trial court on that aspect of the case.
- There had been considerable debate as to what amounted to a fair hearing or procedure in disciplinary proceedings. The appellant had cited the Kenya Revenue Authority vs Menginya Salim Murgani  eKLRwhere the Court held that the fairness of a hearing was not determined solely by its oral nature and that a hearing could be conducted through an exchange of letters as happened in the case. It also held that whether an oral hearing was necessary would depend on the subject matter and circumstances of the particular case and upon the nature of the decision to be made
- Section 41 provided the minimum standards of a fair procedure that an employer ought to comply with. The section provided for notification and hearing before termination on grounds of misconduct. Four elements had to be discernible for the procedure to pass muster:-
- an explanation of the grounds of termination in a language understood by the employee;
- the reason for which the employer was considering termination;
- entitlement of an employee to the presence of another employee of his choice when the explanation of grounds of termination was made; and
- hearing and considering any representations made by the employee and the person chosen by the employee.
- In the instant case, the letter inviting the respondent to appear before the Board was only two lines containing the date and venue. It said nothing about the reasons for such invitation and about the respondent appearing with another employee of his choice. The retort that an employer had no obligation to ask the employee to be accompanied did not avail the appellant because the law required that such other person be present to hear the grounds of termination and if so inclined, make representations thereon. A hearing not so conducted was irregular.
- At the Board meeting, there was no evidence that an explanation of the grounds of termination was made to the respondent, and if so, in what language. The Board had in its possession the very document that formed the basis of the charges framed against the respondent but kept it away from him. Even in criminal trials, which were more serious in nature, an accused was entitled to the statements that supported the charges laid against him. That was the essence of fairness even outside a judicial setting. The respondent faced serious indictments which could torpedo his entire career and destroy his future. That was a matter in which oral hearing was necessary, but none was held. Instead, all the respondent had was a technical appearance of less than five minutes with the Board, which evidence was not seriously challenged. For all those reasons, the procedure adopted by the appellant was short of a fair one.
- The award of damages was made under section 49 (1) (c) of the Act. The Court had in several previous decisions decried the awarding of maximum compensatory damages for wrongful or unfair termination without a firm factual and legal foundation for such awards. While the considerations by the trial court were relevant in the overall award of damages, the award lacked a sense of balance. The balance was introduced by section 49 (4) which listed a raft of considerations for a court to take into account. The trial court made no mention of those provisions.
- It was necessary to have considered not only the effect of the dismissal on the respondent, but the intention of Parliament in capping compensatory awards. It was also relevant to consider other comparable awards made in similar circumstances but none was considered. The respondent had already been given compensatory awards for the wrongful termination of his employment in terms of gratuity, notice, leave, thus converting it to a normal termination. He had only 15 months of his contract to serve and giving him his gross salary for 12 months would virtually be paying him for the term he had not served. At any rate it was doubtful that injured feelings and difficulty to find alternative employment were relevant considerations in determining compensation.
- The award was inordinately high and was not based on a balanced consideration of the applicable principles. An interference with the award to the extent that it was set aside and substituted with an award of six months gross salary; Sh.355,500 x 6 = Sh.2,133,000.
Appeal partly allowed with no order as to costs.
Case Updates Issue 037/2019
|| Teachers acting as head of institutions (head teachers and principals) are unionisable employees
Teachers Service Commission v Kenya National Union of Teachers (KNUT); Ministry of Labour & Social Protection (Interested Party)  eKLR
Petition 151 of 2018
Employment and Labour Relations Court at Nairobi
B Ongaya, J
July 12, 2019
Reported by Ian Kiptoo
Labour Law - labour relations - Industrial Relations Charter - applicability of – where parties relied on recognition and collective bargaining agreement - when could the provisions of the Industrial Relations Charter be applicable where there was a recognition agreement and a collective bargaining agreement
Labour Law - trade unions - membership to a trade union - unionisable employees - headmasters and principals - where recognition agreement provided that teachers employed by the TSC would be members of KNUT – where recognition agreement and the labour relations Act provided for scope of unionisable teachers - whether teachers who were head of institutions were barred from joining, being members and participating in trade unions - whether conflict of interest was a valid reason for barring teachers acting as head of institutions (head teachers and principals) from joining, being members and participating in trade unions – Constitution of Kenya, 2010 article 27 (1); Labour Relations Act, sections 2, 4, 5 (1) and (3), 8, 27, 34 (1) and 54; Code of Regulations of Teachers, regulations, 3, 190 (1) and (2)
Constitutional Law – national values and principles of governance – participation – where TSC sought to change transfer policy affecting teachers - employers obligation or duties to consult, negotiate, inform, and confer employees due process - whether the Teachers Service Commission (TSC) was under a constitutional and statutory obligation to involve the Kenya National Union of Teachers (KNUT) in the establishment, institution or change of the transfer policy or any other human resource policy – Constitution of Kenya, 2010, articles 10, 41 and 232; Labour relations Act, sections 3(1) (2) and 5
Statutes – interpretation of statutes – interpretation of section 35 (2) (a) of the Teachers Service Commission Act – where section 35 (2) (a) required every registered teacher to undertake career progression and professional development programmes - intelligible and delegation principle – where regulation 48(1) of Code of Regulations of Teachers (CORT) provided that every teacher would undertake the TPD programme - whether the requirement for teachers to undertake the Teacher Professional Development (TPD) modules under regulation 48 (1) of the Code of Regulations of Teachers (CORT) ought to have been by way of regulation from the TSC- Constitution of Kenya, 2010 articles, 232(1) (a); Teachers Service Commission Act, section 35 (2) (a); Public Officers Ethics Act, section 9; Code of Regulations of Teachers, regulation 48 (1)
The petitioner’s (Teachers Service Commission) case in the instant petition was that: its functions were provided in the Constitution of Kenya, 2010 (Constitution) including to promote and transfer teachers; that as a constitutional commission, it was subject only to the Constitution and the law and was independent and not subject to direction or control by any person or authority and that institutional administrators should not be unionisable at all.
On the other hand, the respondent (Kenya National Union of Teachers) relied on regulation 190 of the Code of Regulations of Teachers (CORT) for the position that institutional administrators were unionisable subject to limitations that there should be no interference or conflict to performance of their duties.
- When could the provisions of the Industrial Relations Charter be applicable where there was a recognition agreement and a collective bargaining agreement?
- Whether teachers who were head of institutions were barred from joining, being members and participating in trade unions.
- Whether conflict of interest was a valid reason for barring teachers acting as head of institutions (head teachers and principals) from joining, being members and participating in trade unions.
- Whether the Teachers Service Commission (TSC) was under a constitutional and statutory obligation to involve the Kenya National Union of Teachers (KNUT) in the establishment, institution or change of the transfer policy or any other human resource policy.
- Whether the requirement for teachers to undertake the Teacher Professional Development (TPD) modules under regulation 48 (1) of the Code of Regulations of Teachers (CORT) ought to have been by way of regulation from the TSC.
- Whether deducting fees and/or charges from the salary payable to teachers for the partial or full funding of TPD programmes was lawful.
Relevant Provisions of the Law
Teachers Service Commission Act, 2012
1) The Commission shall take all necessary steps to ensure that persons in the teaching service comply with the teaching standards prescribed by the Commission under this Act.
2) For purposes of subsection (1), the Commission shall:
a) require every registered teacher to undertake career progression and professional development programmes as may be prescribed by regulations made under this Act;
b) require every registered teacher to take out a teaching certificate as prescribed by regulations made under this Act;
c) enter into agreements with any institution, body, department or agency of the Government pursuant to its functions and powers prescribed under this section; and
d) appoint an agent or designate a member or staff of the Commission who may enter any educational institution and make an enquiry in that regard.
3) A teacher who fails to:
a) undertake a prescribed career and professional development programmes; or
b) take out a teaching certificate under section 35(2) (b) of this Act, shall be dealt with in accordance with the regulations.
Labour Relations Act
4. Employee’s right to freedom of association
(1) Every employee has the right to:
a) participate in forming a trade union or federation of trade unions;
b) join a trade union; or
c) leave a trade union.
(2) Every member of a trade union has the right, subject to the constitution of that trade union to:
a) participate in its lawful activities;
b) participate in the election of its officials and representatives;
c) stand for election and be eligible for appointment as an officer or official and, if elected or appointed, to hold office; and
d) stand for election or seek for appointment as a trade union representative and, if elected or appointed, to carry out the functions of a trade union representative in accordance with the provisions of the Act or a collective agreement.
Code of Regulations of Teachers
1) Every teacher shall undertake the professional teacher development programmes prescribed or recommended by the Commission from time to time.
2) The Commission shall approve training institutions to conduct teacher development programmes.
3) The approved institutions shall issue certificates to teachers upon completion of the programme.
1) Every teacher has a right to fair labour practices as enshrined in the Constitution.
2) Where an industrial action or any other disturbance leading to stoppage of work occurs:
a) the teacher shall ensure the safety of all the learners, colleagues, members of the public and the property and facilities within the educational institution; and
b) the administrative staff shall continue to undertake such duties as are necessary to ensure the safety and security of school property and to safeguard the welfare of learners;
c) a teacher is expected at all times during an industrial action to conduct himself in a manner that befits the dignity of the teaching profession and avoid behaviour that may bring the profession into disrepute.
Public Officer Ethics Regulations, 2003,
“11.The personal interests of a public officer do not conflict with the official duties with respect to a matter, for purposes of section 12 of the Act, if the following are satisfied-
a) the personal interests of the public officer are not specific to the public officer but arise from the public officer being a member of a class of persons who all have personal interests in the matter;
b) it would be impractical for the public officer and all other public officers who have personal interests in the matter to refrain from participating in deliberations with respect to the matter; and
c) either the personal interests of the public officer are obvious or the public officer declares his personal interests to his superior or other appropriate body or person.”
- The Labour Relations Act, 2007 defined Industrial Relations Charter to mean a tripartite agreement between the Government, the most representative employers’ organisation and the most representative employees organisation for the regulation of labour and industrial relations in Kenya. Therefore, the Industrial Relations Charter was undisputedly a tripartite agreement. Article 24 (1) of the Constitution of Kenya, 2010 (Constitution) provided that a right or fundamental freedom in the Bill of Rights (such as article 41 on Labour Relations) would not be limited except by law, and then only to the extent that the limitation was reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including:
- the nature of the right or fundamental freedom;
- the importance of the purpose of the limitation;
- the nature and extent of the limitation;
- the need to ensure that the enjoyment of rights and fundamental freedoms by any individual did not prejudice the rights and freedoms of others; and
- the relation between the limitation and its purpose and whether there were less restrictive means to achieve the purpose.
- The Industrial Relations Charter was a tripartite agreement and fell short of law or legislation. Thus the provisions of the Industrial Relations Charter could not serve as a limitation of the rights conferred under article 41 of the Constitution. However, the Charter drew its relevance and binding force by reason of the parties’ agreement or consent and where the tripartite contracting and consenting parties desired that any content of the Industrial Relations Charter amounted to a limitation of any of the rights in the Bill of Rights such as article 41 of the Constitution, such limitation had to be enacted into law as contemplated and envisaged in article 24(1) of the Constitution.
- The Industrial Relations Charter was an agreement of general application for the regulation of labour and industrial relations in Kenya. The provisions of the Charter applied where the recognition agreement and collective bargaining agreement (CBA) were silent and had not specifically provided for the issue at hand or the Charter served by way of filling the gaps not agreed upon by the parties and further as a point of reference in concluding the recognition agreement and CBA in individual cases. Therefore, where the employer and the trade union had considered the provisions of the Industrial Relations Charter and concluded their specific provisions on the matter at hand in their individual recognition agreement and CBA, the overriding and applicable provision was as per the recognition agreement and the CBA in the individual cases and not the general provision in the Industrial Relations Charter.
- The prevailing Industrial Relations Charter was agreed upon and concluded on April 30, 1984 long before the coming into operation of the Constitution of Kenya, 2010 and its provisions would therefore need to be aligned to the provisions of the Constitution. The Charter was not law but an agreement and it was therefore not part of law in force immediately before the effective date of the Constitution of Kenya 2010 as envisaged in section 7 of the Sixth Schedule to the Constitution. An urgent and important assignment was for the parties to the tripartite agreement to review the Industrial Relations Charter with a view of aligning it to the Constitution and keeping pace with the changed employment and labour relations environment.
- In the instant dispute, the CORT and the CBA concluded between the parties appeared to resolve the issue at hand. Regulation 3 defined head of institution to mean the lead educator or administrator in a public educational institution appointed by the Commission as such and responsible for the implementation of the educational policy and professional practices. Regulation 190 (1) provided that a teacher serving in an administrative capacity could be a member of a trade union provided that such membership would not interfere or in any way conflict with the performance of the teacher’s assigned duties. Regulation 190(2) provided that in event of an industrial action or any other disturbances leading to stoppage of work, the administrator would ensure the safety of all the learners, colleagues, members of the public and the property and facilities within the educational institution.
- The recognition agreement between the parties showed that the agreement was made on May 15, 1968 between the petitioner and the respondent and prior to the preamble the agreement stated that, whereas the Union was the organisation appearing to the Minister for Education to represent teachers in the teachers’ service. In the preamble, manager meant any person or body of persons responsible for management and conduct of a school including a Board of Governors.
- The CBA signed between the petitioner and the respondent dated October 25, 2016 defined head of institution to mean the lead educator or administrator in a public educational institution appointed by the Commission as such and responsible for the implementation of the educational policy and professional practices. Further, the CBA defined teacher would have the meaning assigned to it under the Teachers Service Commission Act. Clause 18 of the CBA on industrial action provided that in event of an industrial action; parties would adhere to Part VIII and Part X of the Labour Relations Act. Further, it provided that with a view to maintain nobility of the teaching profession, parties agreed that in event of an industrial action; they would conduct themselves with dignity, civility and decorum.
- Section 2 of the Labour Relations Act, 2007 defined unionisable employee in relation to any trade union to mean the employees eligible for membership of that trade union. Further, section 4 of the Labour Relations Act conferred the employee’s right to freedom of association. Section 5 (3) of the Act provided that no person would give an advantage or promise to give an advantage, to an employee or person seeking employment in exchange for the person not exercising any right conferred by the Act or not participating in any proceedings in terms of the Act; provided that nothing in the section would prevent the parties to a dispute from concluding an agreement to settle the dispute. Section 5(1) of the Act provided that no person would discriminate against an employee or any person seeking employment for exercising any right conferred by the Act.
- Under section 8 of the Labour Relations Act, the respondent was entitled, subject to provisions of the Act, to determine its own constitution and rules and, to hold elections to elect its officers. The recognition agreement between the parties upheld the provisions of section 8. Section 27 of the Act provided for procedure for changing the name of a trade union or constitution of a trade union and it entailed a resolution by the trade union in that regard and notifying the Registrar of trade unions as prescribed in the section. Section 34 (1) of the Act provided that election of officials of a trade union would be conducted in accordance with the registered constitution of the trade union. Section 54 of the Act provided that the terms of recognition of a trade union by an employer would be in a recognition agreement. The section further provided that an employer could apply to the labour board to terminate or revoke a recognition agreement.
- The parties had agreed as per the recognition agreement and the CORT that all persons employed by the petitioner including principals or head-teachers in the teaching service would be members of the respondent trade union. In that regard, the CORT and the recognition agreement had put in place measures to manage any conflict of interest that could emerge taking into account the special role played not only by the principals or head-teachers but also by the teachers generally. There was no established basis to interfere with the parties’ conscious, voluntary, lawful, constitutional and binding recognition agreement, CBA and the provisions of the CORT in that respect as related to membership in the respondent by principals or head-teachers and persons playing their roles in the schools. The parties were bound by their recognition agreement and the CBA accordingly together with applicable legislative provisions in that regard.
- Principals and head-teachers had to enjoy equal rights like other members of the respondent including participation in the respondent’s elections as candidates or voters as prescribed in the cited provisions of the Labour Relations Act, 2007. Once a head of institution was a member of the union as already agreed between the petitioner and the respondent in the recognition agreement and the CBA and as provided for in the CORT, the head of institution had to then enjoy equal membership rights as other members and as conferred by relevant statutory provisions and in line with the mandatory provisions of article 27(1) of the Constitution.
- The conferment upon the head-teachers, principals and other senior teachers of super scale salaries under the CBA could not justify denial of union membership or election rights to such teachers as the parties did not agree as much in the CBA and the same would amount to a disadvantage or advantage on account of not being a member of the union or not participating in union activities. Such were matters carefully and decisively addressed against in the cited provisions of the Labour Relations Act, 2007 and no unionisable employee could be conferred or denied a benefit by the employer as a consideration or ground for withdrawal of union membership or not participating in union elections or other lawful activities.
- The recognition agreement was clear that the respondent determined its union officials and appointed them in accordance with its constitution and notified the petitioner accordingly. Thus, eligibility of a head of institution to be a candidate in the respondent’s election was a matter which could only be determined by the respondent’s constitution and the Court would respect and uphold the statutory provision and as agreed upon by the parties in the recognition agreement.
- The recognition agreement had clear provisions on the amendment of its provisions and the Labour Relations Act, 2007 had elaborate provisions on the revocation of a recognition agreement. The contractual and statutory provisions applied and parties were bound accordingly including on the issue of the scope of unionisable employees who were subject of the recognition agreement. The Court could not vary or alter the lawful provisions of the recognition agreement on the scope of eligible union membership or scope of unionisable teachers.
- In the complex structure of management of schools and similar learning institutions in the public service, there was a deliberate structure whereby teachers were carefully subjected to appropriate managers of the schools or institutions. Thus the recognition agreement stated that the manager of a school was the Board of Governors. The Boards of Management were the ones who managed schools and they could assign teachers such responsibilities through the head of institution (principal or head-teacher) as could be appropriate or necessary and as envisaged in the recognition agreement. The operative arrangements in the CBA, the CORT, and the recognition agreement was not avoidance of the apparent conflict of interest but management of the conflict of interest as could attach and which was already mutually known to the petitioner and the respondent to exist so that measures for handling the same had been instituted accordingly.
- Conflict of interest could exist but the law provided for its management and it could not therefore constitute a valid ground for locking out all heads of institutions (principals and head-teachers) and teachers playing such roles one way or the other from trade union membership and participation. Avoidance of the conflict of interest was desirable but in practice the primary focus was not avoidance but managing or handling situations of conflict of interest through measures such as declaration of interests; disqualification where appropriate; and undertaking remedial or mitigating measures as appropriate. In the instant case, the heads of institutions satisfied all the three prescribed grounds nullifying the conflict of interest as prescribed in regulation 11 of the Public Officer Ethics Regulations, 2003.
- The petitioner was subject only to the Constitution and law, and, law in that respect included statutory provisions that were not inconsistent with the Constitution. Thus, the respondent was bound by statutory provisions on employment and labour relations unless it was established that such provisions were inconsistent with the Constitution or their application to the respondent was expressly barred. Section 3(1) of the Employment Act, 2007 provided that the Act would apply to all employees employed by any employer under a contract of service and section 3(2) provided that the Act bound the Government. Section 3 of the Labour Relations Act, 2007 provided that the Act would not apply to any person in respect of his employment or service in the armed forces or any reserve force thereof; and in the Kenya Police, the Administrative Police Force, the Kenya Prisons Service and the National Youth Service, or in any reserve force or service. The petitioner not having been expressly exempted, the Act obviously applied.
- The statutes were replete with provisions that imposed upon the employers the obligation or duties to consult, negotiate, inform, and confer employees due process as opposed to making of unilateral or arbitrary decisions in the employment environment and relationship. Therefore, the petitioner was bound accordingly and the respondent was entitled to participate and raise concerns about the transfer decisions or change in the transfer policies by the petitioner – and raising such concerns within the prevailing recognition agreement, CORT, and CBA that were binding upon the parties.
- It was by such statutory provisions and as partly flowing from the national values and principles of governance in article 10 and the values and principles of public service in article 232 of the Constitution that the petitioner was bound to involve the respondent by way of information, consultation, negotiation and agreement so that such involvement was not founded on the petitioner’s tokenism or mere gesture of goodness and goodwill–it was a constitutional imperative that evolved into an obligation on the part of the petitioner. In establishing or instituting or changing the transfer policy or other human resource policies within its constitutional and statutory mandate, the petitioner was enjoined to inform, consult, negotiate in good faith and reach an agreement or otherwise resolve the matter as envisaged in the provisions of the Labour Relations Act, 2007 and other relevant legislation and tenets of fair labour practices as envisaged in article 41 of the Constitution and other enabling statutory provisions.
- Clause 4 of the CBA provided that the CORT and the Code of Conduct and Ethics for Teachers would form an integral part of the CBA. Part VI of the CORT from regulation 73 to 81 had elaborate provisions on the promotion of teachers. Regulation 73 in particular provided for promotion of teachers in accordance with the existing schemes of service. Regulation 74 provided that the promotions would be in accordance with the schemes of service which provided for common cadre establishment promotion; and competitive promotion. Part VI of the CORT provided for other criteria and considerations in undertaking teacher promotion.
- Clause 12 of the CBA on career progression provided that the parties agreed that career progression in the teaching service would be implemented as provided under Part VI of the CORT. Clause 19 of CBA provided that parties would be bound by provisions under regulation 16 of the CORT on non-discrimination. Section 5 of the Employment Act, 2007 provided for equality of opportunity and elimination of discrimination in employment.
- A consideration of the provisions of section 5 of the Employment Act, 2007, the CBA, the recognition agreement and the provisions of the Labour Relations Act, 2007 that no employee could be disadvantaged on account of joining or not joining a union and participating or not participating in union activities. On that account, the petitioner would undertake teacher promotion in accordance with the relevant provisions of the CORT and the schemes of service with respect to all unionisable teachers eligible to join the respondent trade union.
- The parties could seriously consider reviewing the prevailing schemes of service with a view of bringing them into alignment with the prevailing CBA pay structure as would be necessary and without derogating from the provisions of the CORT on teacher promotion. The Circular in issue was clearly outside the CORT on teacher promotion and was liable to revocation with respect to all unionisable teachers eligible to join the respondent trade union and was revocable generally for inconsistency with the CORT.
- Clause 11 of the CBA on performance management and evaluation provided that annual performance evaluation would be undertaken by the employer through tools to be developed with the participation of the parties to the CBA. It was the petitioner’s constitutional and statutory obligation to inform, consult, negotiate in good faith and reach an agreement or otherwise resolve the matter as envisaged in the provisions of the Labour Relations Act, 2007 and other relevant legislation and tenets of fair labour practices as envisaged in article 41 of the Constitution and other enabling statutory provisions. In any event, the parties agreed upon participation of the both parties in developing the tools. The respondent could not therefore turn around and abandon the agreement as the provision in the CBA was binding accordingly.
- The respondent participated in the development of the tools by way of meetings and benchmarking studies. The only remaining aspect was final validation and issuance of final performance tools. Further, it was considered that the respondent would put in place through its administrative channels appropriate measures of availing the tools to individual teachers and returning completed tools at the petitioner’s resources. Thus, the petitioner would convene validation meetings for finalising the performance measurement tools by December 1, 2019 for a roll out in January 2020; and the petitioner would institute administrative steps for availing the tools to the individual teachers and returns being made at the petitioner’s resources.
- Section 35 of the Teachers Service Commission Act, 2012 provided for compliance with teaching standards. Article 232 (1) (a) of the Constitution provided that the values and principles of public service included high standards of professional ethics. Section 9 of the Public Officer Ethics Act, 2003 on professionalism set out standards of professionalism to be upheld by public officers like the teachers serving in the petitioner’s teaching service. Therefore, the Teacher Professional Development (TPD) modules programmes were a positive initiative that was already aligned to the relevant constitutional and statutory provisions.
- Section 35 (2) (a) was clear that the petitioner would require every registered teacher to undertake career progression and professional development programmes as could be prescribed by regulations made under the Act. The TPD programmes were to be prescribed by regulation. The TPD programmes in dispute in the instant case had not been issued by way of a regulation as no such regulation had been exhibited. The provisions of section 35(2) (a) were not satisfied when the CORT in regulation 48 (1) simply provided that every teacher would undertake the professional teacher development programmes prescribed or recommended by the Commission from time to time.
- Regulation 48(1) could not take away the intelligible principle in section 35(2) (a) by giving the petitioner a wide discretion to prescribe the TPD programmes otherwise by way of the regulations prescribed in the enabling statute. Thus, regulation 48(1) had to be read to mean that the petitioner was reminded that it was to prescribe the TPD programmes and when the petitioner came to do so, it had to comply with the intelligible principle or safeguard that it would do so by regulation.
- Parliament did not delegate its legislative powers unless there was a clear safeguard in the enabling statutory provision for the authority exercising the delegated power to comply with in putting flesh or filling the gaps in the law made by Parliament by way of subsidiary legislation. Section 35(2) (a) was clear that it was by regulation that the petitioner could issue the TPD programmes. It was the making of regulations that was the parliamentary safeguard within the intelligible principle that the petitioner had to comply with in exercising the parliamentary delegated power to make the TPD programmes. The TPD programmes applied to all registered teachers and not only the members of the respondent or the teachers in the employment of the petitioner and the more reason the safeguard by way of regulations had to be complied with.
- The Statutory Instruments Act, 2013 under section 2 defined statutory instrument to mean any rule, order, regulation, direction, form, tariff of costs or fees, letters patent, commission, warrant, proclamation, by-law, resolution, guideline or other statutory instrument issued, made or established in the execution of a power conferred by or under an Act of Parliament under which that statutory instrument or subsidiary legislation was expressly authorised to be issued. The petitioner was expressly authorised to issue the TPD programmes by way of a regulation and such regulations were a statutory instrument as provided in the Statutory Instruments Act, 2013.
- Part II of the Statutory Instruments Act made it mandatory for consultations to be undertaken before making statutory instruments. Section 8 (1) of the Act provided that before a regulation making authority (such as the petitioner in the instant case) made a statutory instrument, the regulation-making authority would make consultations with persons who were likely to be affected by the proposed instrument. Section 8(2) provided for a test for determining if consultations undertaken were appropriate to include the extent to which the consultation drew on the knowledge of persons having expertise in fields relevant to the statutory instrument; and if the consultations ensured that persons likely to be affected by the proposed statutory instrument had an adequate opportunity to comment on its proposed content.
- Consultation with the affected community or representatives of those affected (such as the respondent) and the experts in the area was mandatory. There being no regulation promulgated by the petitioner on the TPD programmes as envisaged in section 35 (2) (a) of the Teachers Service Commission Act, 2012, there was no valid TPD programme for implementation by the petitioner. Further, section 25 of the Statutory Instruments Act, 2013 was clear that a statutory instrument could provide for the imposition of fees and charges in respect of any matter with regard to which provision was made in the enabling legislation. The petitioner had not shown a provision in the Teachers Service Commission Act, 2012 or other law permitting it to impose fees and charges against teachers with respect to TPD programmes.
- If the TPD programmes were envisaged to have significant costs on the teachers as envisaged in section 6 of the Statutory Instruments Act, 2013, then the petitioner would mandatorily be required to prepare regulatory impact statement about the regulations on TPD programmes. Further, if it was desired that any charges or fees were deducted from the salary payable to teachers with respect to partial or full funding of TPD programmes as could be necessary or appropriate, then such deductions would have to be shown to be in compliance with the provisions of Part IV of the Employment Act, 2007 on protection of wages.
- Under section 17(1) of the Employment Act, the general principle was that an employer would pay the entire amount of the wages earned by or payable to an employee in respect of work done by the employee in pursuance of a contract of service. Section 19 of the Act provided for instances and permissible deductions an employer could deduct from a wage or salary. Section 19(f) of the Employment Act was clear that an employer could deduct any amount which was authorised by any written law for the time being in force, collective agreement, wage determination, court order or arbitration award. Therefore, a statutory provision expressly permitting the petitioner to deduct out of teachers’ salaries towards partially or fully funding of TPD programmes as could be necessary or appropriate would be mandatory in that regard. Under section 25 of the Act, it amounted to a criminal offence to deduct salaries except as provided in Part IV of the Act.
- Parliament had not given out its constitutional legislation making powers and functions to constitutional commissions, independent offices and indeed any other authority. Conferment of one or other constitutional power and function to such commissions, independent offices or other authorities did not amount to conferment of the legislative powers and functions that were constitutionally vested in the Parliament. Subsidiary legislation had to therefore comply with and be within the confines of the delegation doctrine and the intelligible principle. Every constitutional commission, independent office and indeed any other authority should consistently caution themselves that administrative policy could not substitute a prescribed statutory instrument such as regulations in the instant case.
Petition partly allowed with each party to bear their own costs.
- The petitioner would undertake transfer of teachers being members but non-officials of the respondent in accordance with the provisions of the Code of Regulations of Teachers (CORT).
- The teachers being non-institutional administrators and being the respondent’s officials would be transferred within respective geographical areas they were elected as such to represent.
- The institutional administrators or heads of institutions (principals or head-teachers) or teachers performing roles of a head of institution one way or the other were unionisable employees under the recognition agreement in place and were entitled to participate as candidates or voters and to be elected and appointed as trade union officials in accordance with the respondent’s constitution and the relevant provisions of the Labour Relations Act, 2007; and where they were so elected or appointed and serving as respondent’s officials, they would therefore be liable to be transferred only within respective geographical areas they were elected as such to represent.
- The petitioner would undertake teacher promotion in accordance with the relevant provisions of the CORT and the schemes of service with respect to all unionisable teachers eligible to join the respondent trade union; and parties could within the CBA and recognition agreement consider reviewing the prevailing schemes of service with a view of bringing them into alignment with the prevailing CBA pay structure and related matters as would be necessary and without derogating from the provisions of the CORT on teacher promotion – as the policy circular of May 2, 2018 on Career Progression Guidelines and purporting to abolish and replace the prevailing three schemes of service would not apply accordingly.
- The petitioner would convene validation meetings for finalising the performance measurement tools by December 1, 2019 for a roll out in January 2020; and the petitioner would institute administrative steps for availing the tools to the individual teachers at their respective stations of deployment and returns of completed tools being made at the petitioner’s resources.
- The Teacher Professional Development (TPD) modules in dispute would not be implemented as they fell short of professional development programmes as could be prescribed by the petitioner by regulation and pursuant to section 35 (2) (a) of the Teachers Service Commission Act, 2012; and in prescribing the career progression and professional development programmes by way of regulation under section 35(2) (a) of the Act, the petitioner would comply with the provisions of the Statutory Instruments Act, 2013.
- The dispute at hand having been resolved by way of the conciliation proceedings, the bipartite negotiations, the parties’ points of agreement in the joint memorandum filed on April 8, 2019 and the findings in the judgment, a declaration was issued that the Notice of Withdrawal of Labour by teachers in the public service dated December 19, 2018 was set aside or spent.
|| Compelling students to register and undertake courses they had already been exempted from in order to graduate violates their right to legitimate expectation
Jane Kiongo and 15 others v Laikipia University and 6 others
Petition No 596 of 2017
High Court at Nairobi
Constitutional and Human Rights Division
E C Mwita, J
July 5, 2019
Reported by Ian Kiptoo
Constitutional Law – fundamental rights and freedoms – legitimate expectation – enforcement of - where representation arose from a private contract – where university made representations that students were qualified for credit transfers – where university students were admitted on basis of internal guidelines - whether compelling students to register and undertake courses they had already been exempted from in order to graduate violated their right to legitimate expectation
Statutes – guidelines – issuance of guidelines – where guidelines touched on transfer of credits by university students – where guidelines were neither gazetted nor were they in form of a Legal Notice - whether guidelines on the transfer of credits by university students that were neither gazetted nor were they in form of a Legal Notice were valid
The petitioners were admitted to the 1st respondent university in 2015 to pursue degree courses. At the time of admission, the petitioners held diploma certificates from various institutions. On being admitted, they were given credit transfers and went on to pursue their studies for the degree of Bachelor of Commerce. However, when they were due to graduate in 2017, their names were omitted from the graduation list. The 1st respondent informed the petitioners through a notice issued in May 2017 that their credit transfers had been revoked and, therefore, they had to re-take the concerned units in order to qualify for graduation. The reason advanced for the action was that the credit transfer had been done irregularly.
The petitioners stated that the 1st respondent’s decision to revoke their credit transfers was a direct discrimination against them and violated their legitimate expectation, their right to education, right to fair administrative action and hearing under the Constitution of Kenya, 2010 (Constitution).
On the other hand, the respondents argued that that those who were admitted to the 1st respondent university were irregularly given credit transfers; that credit transfers could only be from one degree to another and that the petitioners sought to rely on credit transfers which had been done irregularly but which had however since been corrected.
- Whether guidelines on the transfer of credits by university students that were neither gazetted nor were they in form of a Legal Notice were valid.
- Whether compelling students to register and undertake courses they had already been exempted from in order to graduate violated their right to legitimate expectation.Read More...
- The 1st respondent was a Public university established under the Universities Act (Act) and whose mandate was stipulated under the Act. Under the Act, the Senate had power to decide the persons to admit for purposes of studies leading to award of degrees and certificates of that institution.
- The guidelines were introduced in 2014, a year the petitioners were admitted. The 1st respondent was aware of the guidelines at the time it admitted the petitioners and allowed credit transfers. The 1st respondent was not contending that it was not aware of the guidelines. In fact, the credit transfers were based on an internal policy that had been in use since the 1st respondent’s inception. That was a policy that the 1st respondent had perfected and the petitioners were not the only beneficiaries of that internal policy. The 4th respondent had not stated when, if at all, the guidelines were made known to the 1st respondent given that at the time the petitioners were admitted the guidelines were said to have been in use yet the 1st respondent used an internal policy which allowed credit transfer.
- The 4th respondent’s mandate was stipulated under sections 5 and 5A of the Act. That included to 5 (c) promote, advance, publicise and set standards relevant in the quality of university education, including the promotion and support of internationally recognised standards; and (5) (f) develop policy for criteria and requirements for admission to universities. However, what was interesting was the fact that the 1st respondent applied its internal policy on transfer of credits when according to the 1st respondent; there were guidelines in place on the issue. The 4th respondent had not shown when those guidelines took effect and became applicable. It was one thing to have guidelines and another to have them implemented.
- The guidelines were neither gazetted nor were they in form of a Legal Notice to give them the force of law. The 4th respondent had not demonstrated how the guidelines were disseminated for purposes of compliance yet they were to be followed by consequences in default. The guidelines though formulated as an instrument of implementing the 4th respondent’s mandate under the statute should have been made public for purposes of compliance by not only the 1st respondent as an institution but also those to be affected including the petitioners and other members of the public. Without that, the petitioners would not know what was expected of them at the time they were admitted to the 1st respondent institution and should not have been applied to them at the tail end of their studies given that other students had gone through the 1st respondent in a similar process. Therefore, its action against the petitioners at that late stage of their studies amounted to unjustifiable discrimination.
- Legitimate expectation was based on legitimate representation made by an authority which had power to make such representation that certain actions would be done in a particular way without any qualification. Such representation gave rise to legitimate expectation and the authority or institution was thus bound by that representation. Representations would be considered sufficiently precise for purposes of the doctrine of legitimate expectations if, had they been made in the context of a private law contract, they would be sufficiently certain to be capable of enforcement.
- The 1st respondent admitted the petitioners on the basis of internal guidelines approved by its Senate responsible for determining those who should be admitted as students for purposes of qualifying for award of the 1st respondent’s degrees and certificates. The 1st respondent further made a representation to the petitioners that they were qualified for credit transfers and indeed went ahead to do so. On that basis the petitioners proceeded with their studies to conclusion only for the credit transfers to be reversed when they were waiting to graduate which had been admitted by the 1st respondent. The 4th respondent had not demonstrated that the 1st respondent’s Senate did not have power to do what it did or that its decision violated an existing law on admission and credit transfer.
- The 1st respondent’s representation had been made in the context of a private contract between it and the petitioners against which they went on to pay fees and attended studies thus became capable of enforcement. That being the case, the 1st respondent violated the petitioners’ legitimate expectation.
Petition allowed with costs to be borne by the 1st respondent.
- Declaration issued that the respondents actions against the petitioners of compelling the petitioners to register and undertake the courses exempted in the 1st and 2nd years of study as a result of the credit transfer system embraced by the 1st respondent was discriminatory and violated the petitioners’ right to freedom from discrimination and equal protection of the law guaranteed under article 27(1) and (2) of the Constitution.
- Declaration issued that the 1st respondent’s action of revoking the credit units already transferred to the petitioners violated the petitioners right to legitimate expectation.
- An order of mandamus was issued compelling the 1st respondent to include the petitioners’ names for its next graduation ceremony.
- For avoidance of doubt, the orders would only apply to the petitioners named.
||The National Land Commission does not have the initial and exclusive mandate of dealing with claims of historical injustices
Safepak Limited v Henry Wambega & 11 others  eKLR
Civil Appeal No. 8 of 2019
Court of Appeal at Mombasa
A Visram, S G Kairu & A K Murgor, JJA
July 11, 2019.
Reported by Kakai Toili
Constitutional Law – constitutional commissions – National Land Commission – mandate of - dealing with claims of historical injustices - whether the National Land Commission had the initial and exclusive mandate of dealing with claims of historical injustices – Constitution of Kenya, 2010, article 67(2); National Land Commission Act, section 15 (3) (b)
Jurisdiction – jurisdiction of the Environment and Land court - jurisdiction to entertain claims of historical injustices - whether the Environment and Land Court had jurisdiction to entertain claims of historical injustices- Constitution of Kenya, 2010, article 67(2); National Land Commission Act, section 15 (3) (b)
Constitutional Law – constitutional petitions-institution of constitutional petitions – timelines for institution of constitutional petitions – reasonable time - what were the factors to consider in determining whether a constitutional petition had been instituted within a reasonable time - Limitation of Actions Act, section 7
Civil Practice and Procedure – striking out of suits – exercise of the power of striking out of suits - what was the nature of the power to strike out a suit
The 1st to 5th respondents on their own behalf and on behalf of many other persons petitioned the Environment and Land Court (ELC) seeking among others declarations that their right to property and their right to dignity had been violated. The respondents contended that prior to colonization, the suit properties were communal and were occupied by their forefathers and that the occupants of the properties were forcefully evicted therefrom. They further contended that by virtue of their ancestors having been the original occupiers of the properties, their right to the properties had crystallized through the doctrine of ancestral domain or alternatively through an implied inter-generational trust on the land.
The respondents applied to the ELC for a temporary injunction order to restrain the appellant from dealing with the suit premises in any manner, whatsoever detrimental to the rights and interest of the respondents pending the hearing and determination of the petition. In its ruling, the ELC held that the respondents were guilty of abuse of court process. It then proceeded to grant the respondents 30 days to elect between that petition and ELC case Nos 13 & 142 (both of 2014 consolidated) which they wished to pursue. In default of exercising such an election, the petition would stand dismissed. Aggrieved by that decision the appellant filed the instant appeal.
- Whether the National Land Commission had the initial and exclusive mandate of dealing with claims of historical injustices.
- Whether the Environment and Land Court had jurisdiction to entertain claims of historical injustices.
- What were the factors to consider in determining whether a constitutional petition had been instituted within a reasonable time?
- What was the nature of the power to strike out a suit? Read More...
- Jurisdiction was everything and without it the court had to down its tools. If indeed the Environment and Land Court (ELC) was, by reason of article 67 of the Constitution and section 15 of the National Land Commission Act, divested of jurisdiction, then the ELC should have declined jurisdiction.
- A court had jurisdiction to hear and determine any claim relating to historical injustice whether or not the 12th respondent, the National Land Commission (NLC), was seized of the matter. Article 67(2) (e) of the Constitution provided that the NLC could investigate present or historical land injustices. If the NLC had initial and exclusive mandate, it would mean that all present cases on land injustices could only be handled by the NLC and not courts. That would prima facie render the ELC redundant. It was not intended to be so, section 15 (3) (b) of the National Land Commission Act permitted the ELC to deal with historical injustice claims capable of being addressed through the ordinary court system. There was nothing in the Constitution or in the National Land Commission Act ousting the jurisdiction of the High Court or barring a person from presenting a petition before a court in relation to a claim founded on historical injustice.
- Where there was a clear procedure for the redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be followed provided that the remedy thereunder was effectual.
- Based on the material placed before the Court, it would appear that the petitioners did indeed refer the claim to the NLC. The record of appeal was however silent on the outcome of the intervention by the NLC, which though privy to the instant appeal did not participate in the hearing of the appeal. In those circumstances, whether, and to what extent the NLC dealt with the petitioners grievances was a matter of evidence with which the ELC would have to address at the hearing of the petition. The ELC had jurisdiction over the matter.
- Article 67 of the Constitution did not place a time limit within which redress under that provision could be sought. That did not mean that time for seeking redress for constitutional violation was forever at large. Whether a constitutional petition had been instituted within a reasonable time was a question for determination based on the particular circumstances of each case having regard to such considerations as the;
- length of delay;
- explanation for such delay;
- availability of witnesses; and
- considerations as to whether justice would be done.
In the instant case, section 7 of the Limitation of Actions Act did not apply. The Court did not have a basis for interfering with the ELC’s decision that the claim was not defeated under the doctrine of laches.
- A court seized of an application to strike out a suit should act cautiously, carefully and should aim at sustaining a suit rather than terminating it by summary dismissal. Undoubtedly the power and the remedy of striking out a suit had its place and a court should not shy away from giving it in the warranted circumstances. The power to strike out pleadings was not mandatory but permissive, it was a discretionary power. It was a power to be exercised sparingly, it should only be exercised in the clearest of cases. It was a remedy that was sometimes considered to be draconian and unless a case was absolutely clear, that remedy should not be granted.
- The consequence of the finding that the pursuit of relief by the petitioners in different suits in different forums over the same cause of action was an abuse of the process of the court was a matter entirely in the discretion of the ELC. Striking out of the petition was not the only remedy that could be granted by the ELC. It was a proper exercise of discretion by the ELC to direct the petitioners to elect, within the time the ELC stipulated, which of the actions to pursue and which to discontinue.
- The record showed that the petitioners elected to pursue the petition and discontinue the parallel consolidated suit in the ELC No. 13 and 142 of 2014 which had since been withdrawn with costs. It had not been demonstrated by the appellant what prejudice it had thereby suffered. The circumstances in the instant case did not warrant interference of the ELC’s discretion.
Appeal and cross appeal dismissed with no orders as to costs.
- The petition before the ELC to be placed for mention before that court within 14 days from the date of delivery of the judgment with a view to giving directions for an expedited hearing and determination of the petition
|INTELLECTUAL PROPERTY LAW
||Only a bona fide proprietor of a trade mark used or proposed to be used can apply for its registration
L.A Group (PYT) Ltd v Wardrobe Collections  eKLR
Miscellaneous Case 225 of 2017
High Court at Nairobi
F. Tuiyott, J.
June 28, 2019
Reported by Chelimo Eunice & Moses Rotich
Intellectual Property Law – trade marks - registration and protection of trade marks - locus standi - requirements for an applicant to have locus standi to apply for registration of a trade mark - whether an applicant who was not a bona fide proprietor of a trade mark had locus standi to apply for registration of the trade mark – where it was claimed that the applicant did not have authority or consent from the licensor to register the trade mark ‘CLASSIC POLO’ in Kenya - Trade Marks Act, section 20(1).
Intellectual Property Law – trade marks - registration and protection of trade marks - similarities in the registration of marks - the test to be used in determining whether two or more trade marks were similar-whether the mark “CLASSIC POLO” was so similar to ‘POLO’ and ‘POLO PONY’ that it was likely to cause confusion in contravention of the provisions of section 15(1) of the Trade Marks Act - whether the appellant’s trade mark ‘POLO’ was a well-known mark deserving protection under the law - Trade Marks Act, section 15.
Civil Practice and Procedure - quasi-judicial tribunals – proceedings before the Registrar of Trade Marks - procedure for filing opposition proceedings before the Registrar of Trade Marks - whether a party could be allowed to raise new matters after the filing of the counter-statement and statutory declaration by the opponent - whether the Registrar of Trade Marks could use his/her knowledge and information of facts and law to make a determination on an issue that had not been raised by the parties - Trade Mark Rules, rules 46, 47, 48, 49, 50, 51 & 52.
Jurisdiction – appeals – appeals from decisions of the Registrar of Trade Marks - appellate jurisdiction of the High Court - what was the role of the High Court in determining appeals arising from the decisions of the Registrar of Trade Marks - Trade Marks Act, section 21(6), (7), (8), (9) & (10).
Words and phrases-classic-definition of classic- judged over a period of time to be of the highest quality (of a garment) of a simple, elegant style not greatly subject to changes in fashion-remarkably typical; the classic symptoms of flu-a work of art of recognized and established value-a very good example of its kind - Concise Oxford Dictionary, 12th Edition.
Words and Phrases-polo-definition of polo- a game of Eastern origin with rules similar to hockey, played on horseback with a long-handled mallet - Concise Oxford Dictionary, 12th Edition.
Words and Phrases - polo shirt - definition of polo shirt-a casual short-sleeved cotton shirt with a collar and several buttons at the neck - Concise Oxford Dictionary, 12th Edition.
The appeal challenged the Assistant Registrar of Trade Mark’s decision to allow Wardrobe Collection Limited (respondent) to register the trade mark “CLASSIC POLO” (words and device) while dismissing opposition proceedings by L.A Group (PTY) Limited (the appellant). The appellant had opposed the registration of the respondent’s proposed trade mark, “CLASSIC POLO” arguing that it was identical and resembled their registered trade marks ‘POLO’ and ‘POLO PONY’ (word and device).
Although the Registrar found that the two marks were conceptually similar, she held that the element ‘POLO” when used with respect to goods in class 25 could be said to be distinctive of the goods and that other marks comprising the element “POLO” had been allowed to co-exist in the register, thus concluded that the trade mark ‘POLO’ did not deserve protection as a well-known product in accordance with the provision of section 15(1), (4) and 15A of the Trade Marks Act. Aggrieved by the Registrar’s decision, the appellant lodged the instant appeal.
- What was the role of the High Court in determining appeals challenging the decisions of the Registrar of Trade Marks?
- What was the procedure for filing opposition proceedings to registration of a trade mark before the Registrar of Trade Marks?
- Whether an applicant who was not a bona fide proprietor of a trade mark had locus standi to apply for registration of the trade mark.
- What was the test used to determine whether trade marks were similar?
- Whether the Registrar of Trade Marks could use his/her knowledge and information of facts and law to make a determination on an issue that had not been raised by the parties.
- Whether the mark “CLASSIC POLO” was so similar to ‘POLO’ and ‘POLO PONY’ that it was likely to cause confusion in contravention of the provisions of section 15(1) of the Trade Marks Act.
- Whether the trade mark ‘POLO’ was a well-known mark deserving of protection under section 15A of the Trade Marks Act.
Relevant Provisions of the Law
Trade Marks Act, 1956
(1) Subject to the provisions of subsection (2), no trade mark shall be registered in respect of any goods or description of goods that is identical with or nearly resembles a mark belonging to a different proprietor and already on the register in respect of the same goods or description of goods, or in respect of services, is identical with or nearly resembles a mark belonging to a different proprietor and already on the register in respect of the same services or description of services.
(2) In case of honest concurrent use, or of other special circumstances which in the opinion of the court or the Registrar make it proper so to do, the court or the Registrar may permit the registration of trade marks that are identical or nearly resemble each other in respect of the same goods or description of goods by more than one proprietor subject to such conditions and limitations, if any, as the court or the Registrar may think it right to impose.
(3) Where separate applications are made by different persons to be registered as proprietors respectively of trade marks that are identical or nearly resemble each other, in respect of the same goods or description of goods or in respect of the same services or description of services, the Registrar may refuse to register any of them until their rights have been determined by the court, or have been settled by agreement in a manner approved by him or on an appeal by the court, as the case may be.
Trade Mark Rules
(1) Within thirty days after the receipt of the statutory declaration of the applicant under rule 50, the opponent may leave with the Registrar evidence, by way of statutory declaration, confined strictly to matters in reply.
- Section 21 of the Trade Marks Act (the Act) provided for the appellate jurisdiction of the High Court to determine appeals from the Registrar of Trade Marks (the Registrar). As the Registrar was a specialized quasi-judicial tribunal, the court ought to grant some deference to his/her decision unless there was a compelling cause to depart.
- Rules 46 to 52 of the Trade Marks Rules (the Rules) set out the procedure for opposition to registration of trade marks before the Registrar. From a reading of the Rules, the grounds of opposition would ordinarily be in the statement accompanying the notice of opposition as provided in rule 47. Rule 48 of the Rules then required the applicant to set out the grounds they relied on in support of their application. Ideally, the statement accompanying the notice and the counterstatement constituted the pleadings in opposition proceedings.
- New matters arising after the filing of the statement and counterclaim, when placed before the Registrar for determination ought to be taken as properly pleaded for determination. After the filing of the counterclaim, rule 49 of the Rules required the opponent to leave with the Registrar evidence by way of statutory declaration in support of his/her opposition, which would then be served on the applicant. Subsequently, the applicant was permitted by rule 50 of the Rules to file evidence in support of his/her application.
- Rule 51 of the Rules allowed the opponent to file a further statutory declaration confined strictly to new matters raised in evidence in support of the application. In the instant matter, the first time that the issue of proprietorship came up was in the evidence in support provided by the respondent. The appellant then took it up as a point of contention when it filed its further statutory declaration. As such, proprietorship was raised as a further ground when the statutory declaration in reply was filed and served upon the respondent. Rule 52 of the Rules allowed either party to adduce further evidence with leave of the Registrar. Rule 52 of the Rules afforded the respondent an opportunity of confronting the new issue by way of evidence. Accordingly, the issue as to whether the respondent was a bona fide proprietor of the proposed trade mark was a matter that was properly before the Registrar for determination. The Registrar, therefore, fell into error in not making any finding on it.
- With regard to locus standi, section 20(1) of the Act required a person claiming to be the proprietor of a trade mark to have the mark registered by the Registrar. For an applicant to have locus standi to apply for registration of a mark, that person had to have a claim to proprietorship of the mark. If an applicant could not claim to be a proprietor of the mark, then it could not have a standing to apply for its registration.
- The respondent lodged its application on August 28, 2014, but it was not until April 1, 2015, that it was given express authority or licence to distribute and deal with the ‘CLASSIC POLO’ branded apparel by Royal Classic Mills PYT Ltd which was said to be the registered trade mark owner in India and Singapore. Thus, not being a licencee as at August 20, 2014, the respondent could not claim to be a proprietor of the mark sought to be registered as at the date of application. That conclusion would still stand even on the assumption that a license to a mark hoisted on the applicant a right of a claim of proprietorship of the mark for purposes of registration of the mark in circumstances where the licensor had granted sanction to the application.
- The appellant was the proprietor of the trade marks ‘POLO’ and ‘POLO PONY’ (word and device). It also held both trade marks in class 25 on clothing, footwear, headgear, parts, accessories and accoutrements related to those products. Accoutrement was an uncommon word which meant personal clothing or accessories. The application by the respondent was for registration of ‘CLASSIC POLO’ logo in class 25 over clothing, footwear and headgear. Evidently, it was an application in respect to a trade mark over the same goods in which appellant was already a registered proprietor. It being so, section 15(1) of the Trade Marks Act prohibited the registration of the mark of the respondent if it was identical with or nearly resembled the marks belonging to the appellant, unless the appellant could demonstrate concurrent use or other special circumstances to deserve exemption under section 15(2) of the Act.
- The Kenya Industrial Property Institute Trademark Manual of Examination Procedures, at paragraph 565, set out the criteria for examining similarity where marks had a common element. It provided that in determining whether marks were similar, an overall impression of the mark ought to be considered; visual, phonetic and conceptual similarity. It required that global appreciation of the visual, aural or conceptual similarity of the marks in question had to be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components.
- In the instant matter, the mark ‘POLO’ was the common element in the marks. The word ‘CLASSIC’ in the respondent’s mark was ordinarily a descriptive word. Accordingly, the element was descriptive or at least not distinctive of clothing, footwear or headgear which were the subjects of the application by the respondents.
- ‘POLO’ meant a game of Eastern origin with rules similar to hockey, played on horseback with a long-handled mallet. Polo shirt meant a casual short-sleeved cotton shirt with a collar and several buttons at the neck. In the instant matter, ‘polo shirt’ was irrelevant. What was under contention was the element ‘POLO’. In that sense, the word ‘POLO’ was not a generic word. It was distinctive.
- There was a third element to the respondent’s mark. It was a pictorial element between the words ‘CLASSIC’ and ‘POLO’. The element was not striking and might not be distinctive enough as to catch the attention of an average customer. The element was literally the same size as the letter ‘O’ on the word ‘POLO’ in the logo and did not stand out with any sufficiency. It was not distinctive.
- Neither the word ‘CLASSIC’ nor the pictorial element was distinctive while on the other hand the element ‘POLO’ in relation to clothing was distinctive. For that reason, in respect to the mark ‘CLASSIC’ (words and device), trade mark ‘POLO’ (word) and ‘POLO PONY’ (device), the common element ‘POLO’ was distinctive and dominant. While the marks might not have a visual and aural similarity, they nevertheless were conceptually similar. The word ‘CLASSIC’ which would have provided a dissimilarity in the marks was merely descriptive. It could be understood to be describing the mark ‘POLO’ as being elegant or of quality. It might not be understood as being a different brand. The word ‘CLASSIC’ did not distinguish the two marks. For that reason, the competing marks nearly resembled each other.
- Once an opponent to registration had demonstrated that an impugned mark was similar or nearly resembled his/her registered mark in respect to the same goods or services, then an applicant who wanted to benefit from the provisions of section 15(2) of the Act bore the burden of proving that circumstances existed that brought the application within the ambit of the exemptions.
- In the proceedings before the Registrar, the respondent had raised the issue of co-existence of the ‘POLO’ mark in other jurisdictions and not Kenya. The Registrar, being an expert in trade mark matters, would have knowledge and information of facts and law which he/she could bring to bear in deciding a matter. However, the Registrar should not use matters which had not been raised by the parties, and which were of decisive nature in deciding the dispute, before giving the parties an opportunity of making observations or reacting to them. That was because the parties might feel that they have not been accorded a fair hearing in respect to the new matter and they might have information which could successfully challenge the view or facts held by the Registrar.
- The Registrar fell into an error of principle in holding that the mark of the appellant was not strong on the basis of evidence not before her and whose veracity could not be checked by the court in the instant matter. The respondent did not demonstrate the existence of circumstances that would warrant the Registrar to permit the registration of its mark under the provisions of section 15(2) of the Act. The trade marks of the appellant were protected by registration. Allowing registration of the respondent’s mark would run afoul the provisions of section 15 of the Act.
- The decision of the Assistant Registrar of Trade Marks dated March 17, 2017 rejecting the appellant’s opposition and allowing the registration of Trade Mark No. 84273 ‘CLASSIC POLO’ (word and device) in the name of the respondent was set aside.
- The Certificate of Registration issued in respect to the Trade Mark No. 84273 ‘CLASSIC POLO’ (word and device) was cancelled and the mark removed from the Trade Marks register.
- Costs of the appeal and the opposition proceedings were awarded to the appellant.
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