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Court of AppealDismissedCivil Appeal (Application) No. 224 of 2014· [2019] KECA 61 (KLR)

Minnie Mbue v Jamii Bora Bank Limited

Court of Appeal
20 December 2019
2,524 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to reconsider its Kshs.38.7 million award to a fired executive, confirming employers must honour contractual pay for unexpired fixed-term contracts.

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 (Musinga, Gatembu & Murgor, JJ.A.) on an application by Jamii Bora Bank Limited seeking review or setting aside of the Court's own judgment of 10th March 2017, in which the appeal of Minnie Mbue was allowed and the Bank held liable to pay her Kshs.38,666,666 in terminal benefits, including Kshs.35,200,000 being salary for the 44 unexpired months of her five-year fixed-term contract. The Bank argued the award was an error on the face of the record because section 49 of the Employment Act caps compensation for unlawful termination at 12 months' salary, and that the termination was a constructive resignation under clause 19.1 of the letter of appointment. The Court dismissed the application. On the preliminary issue, it held annexure of the impugned order was superfluous since the judgment was on the court file. On the merits, the Court reaffirmed that its jurisdiction to review its own decisions is limited and residual, exercised cautiously to correct errors occasioning real injustice. It held that the award was not made under section 49 but was an enforcement of clause 20.1 of the contract, which entitled the employee to the balance of contractual salary for the unexpired term upon unlawful termination by the employer; a court cannot re-write a contract for parties. The termination was not a constructive resignation, the Bank's own letters invoking clauses 19.6 and 20.1 making the true intent clear. The Court held the application was an attempt to re-argue the appeal - a second bite at the cherry - outside the scope of review, and dismissed it with costs to the appellant.

Key legal issues

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01

Whether the review application was incompetent for failure to annex the order sought to be reviewed

Holding

The application was competent; annexing the order was superfluous since the entire judgment was in the court file before the Court.

Reasoning

Counsel for the appellant argued the application was incompetent because the order sought to be reviewed was not annexed. The Court rejected this, noting counsel for the applicant had narrowed the application to one part of the judgment, and the entire judgment was on the court file, so annexing it would have been superfluous. The Court therefore proceeded to determine the application on its merits.

p. 3
02

Whether the termination amounted to constructive resignation under clause 19.1

Holding

It did not; the termination letter cited termination by mutual consent and, in a subsequent letter, termination under clause 19.6 with payment under clause 20.1.

Reasoning

The termination letter did not cite clause 19 or any sub-clause; it stated termination was by mutual consent. The Court rejected the applicant's argument that this amounted to constructive resignation under clause 19.1. The Bank's own subsequent letter expressly invoked clause 19.6 (notice/salary in lieu) and acknowledged liability under clause 20.1 for salary for the remaining 44 months, making the true intent clear.

03

Whether the award of 44 months' salary was an error on the face of the record as contrary to section 49 of the Employment Act

Holding

It was not; the award was not made under section 49 but was an enforcement of clause 20.1 of the contract, which entitled the employee to the balance of contractual salary for the unexpired period upon unlawful termination.

Reasoning

The applicant argued the maximum compensation for unlawful termination is 12 months' salary under section 49, so the award of 44 months exceeded the Court's jurisdiction. The Court held its finding was not based on section 49 but on clause 20.1 of the letter of appointment; where the contract expressly provides for payment of the balance of salary for the unexpired term upon unlawful termination, the court must give effect to the agreed terms. Such payment is contractual enforcement, not a statutory damages award.

p. 4
04

Whether the Court's limited review jurisdiction was properly invoked

Holding

It was not; the application was an attempt to re-argue the appeal and disclosed no basis for review.

Reasoning

Although the Court has residual jurisdiction to review its own decisions to correct errors occasioning real injustice, that jurisdiction is exercised cautiously. The applicant's grounds merely re-agitated arguments it had lost on appeal, particularly on the construction of clause 19. Re-arguing an appeal is outside the province of review; accordingly no basis for review existed and the application was dismissed with costs.

p. 5

Legal principles established

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  • The Court of Appeal has only a limited residual jurisdiction to review its own decisions, exercisable cautiously to correct errors occasioning real injustice, and not to enable a party to re-argue an appeal.
  • Where a fixed-term employment contract expressly provides for payment of the balance of contractual salary for the unexpired period upon unlawful termination by the employer, the court is bound to give effect to that agreed term once it finds the termination unlawful; such payment is contractual, not an award of damages under section 49 of the Employment Act.
  • A court has no power to re-write a contract for parties.

Court orders

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  1. 1.The respondent's application for review is dismissed
  2. 2.Costs of the application are awarded to the appellant
On appeal from
Court of Appeal at Nairobi
Civil Appeal No. 224 of 2014
Jurisdiction invoked
The Court of Appeal's limited residual jurisdiction to review its own decisions (as articulated in Benjoh Amalgamated Limited v Kenya Commercial Bank Limited); the underlying appeal arose from the Employment and Labour Relations Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Minnie Mbue v Jamii Bora Bank Limited", Case Analysis (2019). Civil Appeal (Application) No. 224 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/61/eng@2019-12-20

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