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Court of AppealDismissedApplication dated 3rd June 2021 (arising from Nairobi Employment and Labour Relations Court Cause No. 40 of 2020)· [2023] KECA 1421 (KLR)

United Aryan (epz) Limited v Tailors & Textiles Workers Union

Court of Appeal
24 November 2023
2,288 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a wage judgment against an EPZ employer because it proved the union couldn't repay the money.

What this practically means

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Executive summary

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United Aryan (EPZ) Limited applied to the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules and Sections 3A and 3B of the Appellate Jurisdiction Act for stay of execution of a judgment of the Employment and Labour Relations Court (Nderi, J, Cause No. 40 of 2020, delivered 19 May 2021). That judgment directed the applicant to implement the Regulation of Wages (General) (Amendment) Order, 2018 with effect from 1 May 2018 and to pay costs, following a claim by a trade union over failure to implement the minimum wage order. The applicant argued the intended appeal was arguable, principally because the trial judge allegedly failed to follow the Supreme Court's decision in Samuel Kamau Macharia on retrospective application of subsidiary legislation, contrary to Article 163(7) of the Constitution, and that the award offended section 28 of the Interpretation and General Provisions Act and affected accrued rights. The respondent countered that the appeal was not arguable, that no draft memorandum was annexed, and that stay would deny union members the fruits of judgment. The Court applied the two-limb test in Kinyanjui v Ketter. It found the appeal arguable, holding that even one arguable ground suffices and that omission of a draft memorandum of appeal is curable. However, on the nugatory limb, the applicant adduced no evidence that the respondent could not repay the arrears if the appeal succeeded; a bare claim that the amount is colossal is insufficient. Balancing the respondent's entitlement to the fruits of judgment against the applicant's apprehension, the Court dismissed the application with costs to the respondent on 24 November 2023. The decision binds subordinate courts on the evidential burden under the nugatory limb of the Rule 5(2)(b) test.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

Yes. The grounds raised, including retrospective application of the wage order, breach of a binding Supreme Court precedent, section 28 of the Interpretation and General Provisions Act, and decisions on unpleaded matters, are arguable; one arguable ground is sufficient.

Reasoning

The court applied the settled Rule 5(2)(b) test from Kinyanjui v Ketter, confining itself to whether at least one bona fide arguable ground exists. It found the five grounds raised, notably the alleged failure to follow the Supreme Court's decision on retrospective application of subsidiary legislation and the effect on accrued rights, raised bona fide questions fit for full argument on appeal.

p. 4
02

Whether failure to annex a draft memorandum of appeal is fatal

Holding

No. The omission is curable where the applicant has sufficiently set out its grievances on the face of the application, the supporting affidavit and submissions.

Reasoning

Following Somak Travels v Aganyo and Abercombie & Kent v Maina, the court held that while annexing a draft memorandum is desirable, its absence is not fatal. On reading the grounds on the application, affidavit and submissions, the court was satisfied the applicant had set out the key grounds for appeal, and rejected the respondent's argument to the contrary.

p. 4
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Whether the appeal would be rendered nugatory if stay is refused

Holding

No. The applicant produced no evidence that the respondent is impecunious or unable to repay the amounts should the appeal succeed; a bare claim that the sum is colossal is insufficient.

Reasoning

Balancing the respondent's entitlement to the fruits of judgment against the applicant's apprehension, the court required proof that payment is irreversible or uncompensable. The applicant failed to meet the legal requirement of demonstrating that the respondent lacks the means or capacity to repay the debt, so the second prerequisite of the Rule 5(2)(b) test was not satisfied and the application failed.

p. 5

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both that the appeal (or intended appeal) is arguable and that it will be rendered nugatory if stay is refused; even one arguable ground suffices for the first limb.
  • An arguable appeal need not be one that will succeed; it is one that is not frivolous and ought to be argued fully, and the court must not make definitive findings of fact or law at the interlocutory stage.
  • Failure to annex a draft memorandum of appeal to a Rule 5(2)(b) application is not fatal where the grounds are sufficiently set out on the face of the application.
  • A bare allegation that the decretal amount is colossal, without evidence that the judgment creditor cannot repay, does not establish that an appeal will be rendered nugatory.

Court orders

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  1. 1.The applicant's application dated 3rd June 2021 for stay of execution pending appeal is dismissed
  2. 2.The respondent is awarded the costs of the application
On appeal from
Employment and Labour Relations Court, Nairobi
Cause No. 40 of 2020
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules and Sections 3A & 3B of the Appellate Jurisdiction Act

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, "United Aryan (epz) Limited v Tailors & Textiles Workers Union", Case Analysis (2023). Application dated 3rd June 2021 (arising from Nairobi Employment and Labour Relations Court Cause No. 40 of 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1421/eng@2023-11-24

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