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Court of AppealAllowedCivil Application No. 96 of 2019· [2020] KECA 212 (KLR)

Telkom Kenya Limited v Communication Workers Union [2020] KECA 212 (KLR)

Court of Appeal
6 November 2020
HOHannah OkwenguMohamed Abdulahi WarsameM. WarsameJMJ. Mohammed
936 words in judgment
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The bottom line

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The Court of Appeal halted collection of a Kshs 25.3 million award against Telkom Kenya until its appeal is heard, because recovering the money later could prove impossible.

What this practically means

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Executive summary

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Telkom Kenya Limited moved the Court of Appeal at Nairobi under Rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution of the judgment of the Employment and Labour Relations Court (Ongaya, J.) dated 28th November 2018 in ELRC No. 2105 of 2015. That judgment declared that Telkom's failure to pay bonuses in line with its HR policy contravened section 5(2) of the Employment Act, sections 5(2) and (3) of the Labour Relations Act and Article 41 of the Constitution, and ordered payment of all outstanding bonuses; the Union computed the sum due as Kshs 25,347,718.08. Telkom argued the appeal was arguable and that, as the means of the Union and its 930 members were unknown, payment would render a successful appeal nugatory. The Union countered that the decretal sum was defined and recoverable from its assets or members' salaries. Applying the settled twin principles from Stanley Kangethe Kinyanjui v Tony Ketter, the court found the draft memorandum raised arguable points, including whether bonuses could be computed without a performance appraisal. On the nugatory limb, relying on National Industrial Credit Bank Ltd v Wasike, it held the evidential burden shifted to the respondent to show its resources; since the financial status of the respondent and its members remained unknown, the applicant would suffer substantial loss if execution proceeded. The court allowed the application, staying execution pending appeal, with no orders as to costs.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The appeal is arguable; it is not frivolous and raises, among others, whether the respondents' members' bonuses could be computed without a performance appraisal process.

Reasoning

The court perused the draft memorandum of appeal without making any final determination on the merits. It found that the draft appeal raised arguable points, in particular whether the bonuses could be computed absent a performance appraisal process. A single arguable point suffices on the first limb of the Rule 5(2)(b) test.

p. 2
02

Whether the appeal would be rendered nugatory if execution proceeds

Holding

The applicant would suffer substantial loss because recovery of the decretal sum of Kshs 25,347,718.08 might prove difficult given the unknown financial status of the respondent and its members; stay was granted.

Reasoning

The respondent asserted the decretal sum could be recovered from its assets or members' salaries. Invoking the principle in National Industrial Credit Bank Ltd v Wasike, the court held the evidential burden lay on the respondent to demonstrate its resources. As the financial status of the respondent and its members remained unknown, execution risked rendering a successful appeal nugatory.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must establish the twin principles that the intended appeal is arguable and that, if successful, it would be rendered nugatory unless stay is granted.
  • Once an applicant shows a respondent would be unable to repay the decretal sum, the evidential burden shifts to the respondent to show what resources he has.

Court orders

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  1. 1.Stay of execution of the judgment of the ELRC (Ongaya, J.) dated 28th November 2018 pending the hearing and determination of the appeal
  2. 2.No orders as to costs

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Constitution of KenyaArticles 27(5), 41, 41(1) and (2)(c)
  • Employment ActSection 5(2)
  • Labour Relations ActSections 5(2) and (3)

Cases cited (2)

  • Stanley Kangethe Kinyanjui vs. Tony Ketter & Others
    [2013] eKLR
  • National Industrial Credit Bank Limited vs. Aquinas Francis Wasike & Another
    Nairobi Civil Application No. 238 of 2005
On appeal from
Employment and Labour Relations Court at Nairobi
ELRC No. 2105 of 2015
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Telkom Kenya Limited v Communication Workers Union [2020] KECA 212 (KLR)", Case Analysis (2020). Civil Application No. 96 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/212/eng@2020-11-06

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