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The Work Injury Benefits Act, 2007 (the Act) provides for compensation to employees for workplace injuries and illnesses.
The Act overhauled the mechanism for determining compensation claims by transferring the power to assess compensation from the courts to the Director of Occupational Safety and Health Services (the Director).
The Law Society of Kenya (the LSK) filed a suit at the High Court in 2008 challenging the transfer of adjudication powers from the courts to the Director. The High Court found in favour of the LSK and declared the transfer of adjudication powers to the Director unconstitutional.
The case was appealed to the Court of Appeal which partly overturned the High Court’s decision. On a further appeal to the Supreme Court (the Court), the Court of Appeals’ decision has been affirmed. The Supreme Court has now definitively held that compensation claims for workplace injury and illnesses are to be adjudicated by the Director.
The main issue for determination by the Supreme Court was whether Sections 16 and 23 of the Act are unconstitutional for unjustifiably restricting employees’ rights to access to justice and fair hearing. These provisions bar employees from filing compensation claims for workplace injury and illness in court. The power to adjudicate the claims is instead assigned to the Director.
The Supreme Court affirmed the Court of Appeals’ finding that Sections 16 and 23 of the Act are constitutional. The Court observed that the intention of the Act is not to limit access to courts but to introduce an alternative dispute resolution mechanism before the Director. The Director’s decision may then be appealed to the Employment and Labour Relations Court (Labour Court).
The Supreme Court reiterated that where the law creates an organ with the power to resolve a given class of disputes, courts must not usurp that power. The Court concluded that compensation claims for workplace injury and illness must be adjudicated by the Director and not the courts.
Notably, the Judges observed that adjudication by the Director offers a faster and simpler procedure which could enhance access to justice by reducing the backlog of cases in court and lowering the cost of accessing justice.
The Supreme Court’s decision also determined the following incidental issues:
The LSK argued that Section 52 of the Act only granted the right of appeal to the Labour Court to one party to the compensation claim and not the other. For this reason, Section 52 was unconstitutional.
The Supreme Court acknowledged that Section 52 of the Act is inelegantly drafted and should be corrected by the Attorney General. However, the Court held that the intention of the law is clear and confirmed that both parties to a dispute have the right to appeal to the Labour Court.
Section 25 of the Act empowers the Director or an employer (with the Director’s approval) to designate a medical practitioner to examine an employee who claims compensation. However, employees do not have a say in the selection of the doctor. On the other hand, employees are entitled to have their own doctor present at the examination – a right which is not available to employers.
The LSK argued that the above differences in treatment of employers and employees are discriminatory and unconstitutional.
The Supreme Court held that Section 25 is not discriminatory as neither employers nor employees are prejudiced by the manner in which medical examinations are conducted. The Court emphasised that medical examinations are supervised by the Director who is a neutral adjudicating party.
Section 58(2) of the Act applies the mechanism for adjudicating claims under the Act to claims arising from accidents or illness occurring before the Act came into effect. The Supreme Court found that this retrospective application is expressly provided for by the law and therefore is not unconstitutional.
However, the Court acknowledged that there is a legitimate expectation that claims which were already pending before the court at the time the Act came into effect would be concluded by the courts under the previous law and not by the Director.
In the end, the Supreme Court found that the LSK’s petition was without merit and dismissed it with no orders as to costs.
The Supreme Court’s decision is welcome as it provides much-needed clarity on the appropriate forum to adjudicate compensation claims arising from workplace injury and illness.
However, the Supreme Court missed an opportunity to offer clear guidance on the fate of cases filed in court during the 11 year period that this suit has been pending determination. The practice of the courts has been to stay these cases pending the determination of this suit.
It is unclear whether the claimants in these suits still retain a right to compensation under the Act given that under certain circumstances, claims for compensation must be filed with the Director within 12 months of an accident or illness.
Employers should keep in mind that the provisions of the Act which had been declared unconstitutional by the Court of Appeal and were not the subject of appeal to the Supreme Court remain nullified.
One such provision is Section 7(1) of the Act which required employers to take out mandatory insurance against liability under the Act with certain pre-approved insurers. Whereas employers are still required to take out mandatory insurance, they may do so with any insurer of their choice.
Section 10(4) of the Act which imposed strict liability on employers even in cases where the employee was at fault also remains unconstitutional. Employers can therefore rely on employees’ misconduct or refusal to follow instructions as a defence to compensation claims for workplace injury or illness.
The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.