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Court of AppealPartially AllowedCivil Application No. NAI 93 of 2014 (as inferred from the ruling; the judgment itself describes an application under Rule 5(2)(b) arising from Employment and Labour Relations Cause No. 1982 of 2013)

Co-operative Bank of Kenya Ltd v Banking Insurance & Finance Union (Kenya (Civil Application 133 of 2015) [2015] KECA 353 (KLR)

Court of Appeal of Kenya
2 October 2015
EGE. M. GithinjiSKS. Ole KantaiPhilomena Mbete MwiluP. M. Mwilu
9,066 words in judgment
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The bottom line

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Kenya's Court of Appeal paused a bank employee's court-ordered reinstatement to a sensitive position pending appeal, confirming employers who comply under compulsion don't lose stay rights.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi on a motion under Rule 5(2)(b) of the Court of Appeal Rules, 2010 by Co-operative Bank of Kenya Limited seeking stay of execution of the judgment of the Employment and Labour Relations Court (Mbaru J, 19th May 2015) and stay of proceedings in ELRC Cause No. 1982 of 2013 pending an intended appeal against the reinstatement of a summary dismissed graduate clerk/ATM custodian. Three judges delivered separate rulings. Githinji, JA, with Kantai, JA concurring, found the intended appeal arguable on points of law, including whether summary dismissal was justified under section 44 of the Employment Act and clause A5 of the Collective Bargaining Agreement, and whether the trial judge applied correct principles under sections 49 and 50 in ordering reinstatement. The majority held that reinstatement effected under compulsion of the decree to avoid contempt did not waive the employer's right to seek a stay, and that reinstating the grievant to the sensitive position would render a successful appeal nugatory. The application was accordingly allowed insofar as the reinstatement order is stayed pending appeal, with costs in the appeal; the monetary and proceedings limbs were not considered afresh, the trial court having already granted conditional stay. Mwilu, JA dissented on the reinstatement limb, finding the bank's apprehension of disruption unsupported by evidence, articulating six factors for such applications, and declining the stay. The majority decision binds subordinate courts and the Employment and Labour Relations Court on the propositions that compelled compliance with a reinstatement decree is not voluntary and does not defeat a stay application, and that nugatory value is assessed case by case.

Key legal issues

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01

Arguability of the intended appeal

Holding

The draft memorandum raised arguable points of law: whether the bank could summarily dismiss under section 44 of the Employment Act and clause A5 of the Collective Agreement, and whether the judge applied the correct principles under sections 49 and 50 in ordering reinstatement.

Reasoning

Appeals from the Industrial Court lie only on matters of law under section 17(2) of the Industrial Court Act. The court found the questions whether the judge applied correct principles in ordering reinstatement, and whether summary dismissal was justified, to be issues of law. The respondent filed no affidavit explaining why the grounds on the main findings were not arguable, and even one arguable point suffices.

p. 4
02

Whether reinstatement already effected in compliance with the decree is capable of being stayed

Holding

Yes, where the compliance was compelled by the decree and done to avoid contempt; such compliance does not deprive the court of jurisdiction to stay, nor does it waive the employer's appeal rights.

Reasoning

The applicant reinstated the grievant by letter dated 29th May 2015 in compliance with the judgment and before the due date, having filed a notice of appeal and a stay application. The court held this was reinstatement by compulsion, not a voluntary act, and the grievant had not resumed duty as ATM custodian. Precedent of this court (Co-operative Bank v BIFU, 2014) supported staying reinstatement even after compliance.

p. 5
03

Nugatory value of the appeal if reinstatement is not stayed

Holding

Reinstatement to the same sensitive ATM custodian position would render a successful appeal nugatory: the grievant would have to be dismissed again, disrupting operations and possibly exposing the bank to unrecoverable financial loss.

Reasoning

The grievant held a position of trust as ATM co-custodian; a loss of Kshs. 531,000 had occurred and been refunded by the co-custodian who was dismissed. The judge reinstated him to the same position at a different branch. If the appeal succeeded, dismissal would already have been effected, and recovery of any losses from the grievant would be difficult.

p. 4
04

Reinstatement as a statutory remedy to be granted only in exceptional circumstances (dissent)

Holding

Mwilu, JA, dissenting, noted that reinstatement under section 49(3) and 50 of the Employment Act and section 12(3)(vii) of the ELRC Act is a statutory remedy granted in exceptional circumstances, and found the applicant's apprehension of disruption unsupported by evidence.

Reasoning

The applicant alleged disruption and loss of trust but the grievant had not reported for duty, so disruption could not be assessed; the applicant failed to discharge the evidentiary burden under section 112 of the Evidence Act on a balance of probabilities. The bank was a large institution capable of redeployment with adequate checks and balances, and reinstatement was no immunity against future discipline.

p. 14

Legal principles established

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  • An employer who reinstates an employee in compliance with a decree to obviate contempt proceedings, where the reinstatement timeframe does not allow a stay application, does not waive the right to seek a stay of execution or to appeal
  • Whether an appeal would be rendered nugatory if successful depends on the peculiar circumstances of each case
  • Where reinstatement to a sensitive position of trust is in issue and the appeal is arguable, reinstatement pending appeal may render a successful appeal nugatory because the employee would have to be dismissed again, disrupting the employer's operations and risking unrecoverable loss
  • Under Mwilu, JA's dissent, a stay of reinstatement already effected should be considered against enumerated factors including whether reinstatement has been effected, whether the parties are public bodies, redeployability, intensity of interaction, demonstrated obstacles, and the employee's willingness to be reinstated (dissenting position, not the binding majority)

Court orders

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  1. 1.Execution of that part of the judgment of the Employment and Labour Relations Court ordering the reinstatement of the grievant is stayed pending appeal
  2. 2.Costs of the application shall be costs in the appeal
On appeal from
Employment and Labour Relations Court
Employment and Labour Relations Cause No. 1982 of 2013
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2010; appeals from the Industrial Court lie to the Court of Appeal on matters of law under 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 (7)

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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 (Civil Application 133 of 2015) [2015] KECA 353 (KLR)", Case Analysis (2015). Civil Application No. NAI 93 of 2014 (as inferred from the ruling; the judgment itself describes an application under Rule 5(2)(b) arising from Employment and Labour Relations Cause No. 1982 of 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/353/eng@2015-10-09

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