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Court of AppealPartially AllowedCivil Application No. NAI 93 of 2014 (UR 75/2014)

Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union Kenya [2014] KECA 109 (KLR)

Court of Appeal
25 July 2014
1,861 words in judgment
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The bottom line

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Kenya's Court of Appeal paused a Kshs.3.7 million employment award against Co-operative Bank, ruling that a worker's modest salary made recovery practically impossible.

What this practically means

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Executive summary

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This is a single-judge-application ruling of the Court of Appeal at Nairobi (Musinga, M'Inoti and J. Mohammed, JJ.A) under rule 5(2)(b) of the Court of Appeal Rules, in which the Co-operative Bank of Kenya Ltd sought a stay of execution of, and/or stay of further proceedings in, an Industrial Court judgment by Marete, J. dated 24th April 2014 in ICC No. 2071 of 2012. The Industrial Court had held that the dismissal of Ms Hellen Nduta Ngugi, a bank employee blamed for a Kshs.2,451,856 fraudulent loss after she confirmed signatures without a call-back, was wrongful, unfair and unlawful, and ordered her immediate reinstatement with salary arrears of Kshs.2,998,941, compensation of Kshs.727,016 and costs. The application was heard unopposed: the respondent was served but neither appeared nor filed a replying affidavit. The Court found two bona fide arguable issues - whether the termination was unlawful and unfair despite the employee's written admission of careless performance, and whether reinstatement three years after termination was an appropriate remedy. On nugatory-ness, the uncontroverted evidence that the applicant could not recover the total award of Kshs.3,725,957 from an employee earning about Kshs.81,882 monthly satisfied the second limb. The Court stayed the Industrial Court judgment until the hearing and determination of the intended appeal, with costs of the application abiding the appeal.

Key legal issues

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01

Whether the intended appeal from the Industrial Court raises arguable questions of law

Holding

The Court was satisfied the intended appeal raises questions of law and is not frivolous, finding it arguable whether the dismissal was unlawful and unfair and whether reinstatement was the appropriate remedy.

Reasoning

Applying the settled test that an arguable appeal need only raise a serious question of law or reasonable argument deserving consideration, and that one bona fide arguable issue suffices, the Court identified two arguable points: whether the termination was unlawful and unfair given the employee's written admission of careless performance, and whether reinstatement three years after termination was the most viable remedy under the Employment Act and judicial authorities.

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02

Whether the appeal would be rendered nugatory if the Industrial Court decree is not stayed

Holding

The Court was satisfied the appeal would be rendered nugatory, as the applicant would be unable to recover the substantial award of Kshs.3,725,957 from an employee earning about Kshs.81,882 monthly, an averment not controverted.

Reasoning

Relying on Reliance Bank Ltd v Norlake Investments Ltd, the Court held that nugatory-ness must be assessed case by case; long delay and inconvenience in recovering money already paid out is relevant. The uncontroverted affidavit evidence that the decree holder's modest salary would make recovery of the substantial award impracticable, plus the disruption of re-terminating employment if the appeal succeeds, satisfied the second limb of the rule 5(2)(b) test.

p. 3

Legal principles established

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  • An appeal lies from the Industrial Court to the Court of Appeal only on matters of law, and the Court of Appeal will interfere only where the trial court considered matters it ought not to have, failed to consider matters it should have, or was plainly wrong on the evidence as a whole.
  • An arguable appeal is not one which must succeed; it is one which raises a serious question of law or a reasonable argument deserving consideration, and a single bona fide arguable issue suffices under rule 5(2)(b).
  • What may render the success of an appeal nugatory must be considered within the circumstances of each particular case, and long delay and inconvenience in recovering money already paid out is a relevant consideration.

Court orders

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  1. 1.That the judgment of the Industrial Court dated 24th April, 2014 be and is hereby stayed until the hearing and determination of the applicant's intended appeal
  2. 2.That costs of this application shall abide the outcome of the appeal
On appeal from
Industrial Court of Kenya at Nairobi
I C C No. 2071 of 2012
Jurisdiction invoked
Rule 5(2)(b) of the Rules of this Court (Court of Appeal Rules); section 17(2) of the Industrial Court Act, 2011

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union Kenya [2014] KECA 109 (KLR)", Case Analysis (2014). Civil Application No. NAI 93 of 2014 (UR 75/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/109/eng@2014-07-25

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