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ELRCDismissedNot stated in judgment· [2013] KEELRC 713 (KLR)

Nancy Waiyego Irungu v Old Mutual Life Assurance Co Ltd [2013] KEELRC 713 (KLR)

Industrial Court of Kenya
29 July 2013
LNLinnet Ndolo
1,336 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Industrial Court confirmed it can hear employer-employee loan disputes, but refused to stop a property sale because the borrower made no real repayment effort.

What this practically means

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Executive summary

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The Applicant, a former employee of the Respondent since 1994, was retired on medical grounds in December 2009, which she contends was a coerced early retirement - an issue pending in a Petition before the Court. During her employment she obtained successive loans from the Respondent secured by a legal charge over property known as Muguga/Gitaru/1359. After leaving employment she defaulted, with the outstanding balance standing at Kshs. 2,775,159.20, and the Respondent issued a Statutory Notice of Sale on 26th March 2013. She moved the Court by Notice of Motion dated 24th June 2013 seeking a temporary injunction restraining the Respondent from exercising its statutory power of sale under Section 90(1) of the Land Act, 2012. The Respondent objected that the application was defective under the Civil Procedure Rules, was spent, and that land matters fell outside the Industrial Court's jurisdiction. The Court first upheld its own jurisdiction, holding that although the subject matter touched land, the dispute arose out of the employment relationship, following Abraham Nyambane Asiago v Barclays Bank of Kenya Limited. On the merits, applying Giella v Cassman Brown, the Court found the questions of coercion and voluntary retirement were for the hearing of the Petition, that both parties claimed irreparable harm, but that the Applicant had paid only Kshs. 100,000 in four years and shown no effort to ameliorate her default. The injunction was accordingly declined and the Court made no order for costs.

Key legal issues

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01

Jurisdiction of the Industrial Court over land-related disputes between employer and employee

Holding

The Court had jurisdiction because the dispute, though relating to a charged property, arose from the employment relationship - the loan default was linked to the cessation of employment which is the subject of a pending Petition

Reasoning

Article 162(2)(a) and Section 12(1)(a) of the Industrial Court Act confer jurisdiction over disputes relating to or arising out of employment. The employment relationship generates rights and obligations beyond the express contract. Since the Applicant's loan arrears flowed from her alleged coerced retirement, which is the subject of the pending Petition, there is a legal nexus between the application and the employment, making it properly before the Court.

p. 3
02

Whether a temporary injunction against exercise of the statutory power of sale should issue

Holding

The injunction was declined; although both parties claimed irreparable harm, the Applicant showed no effort to ameliorate her default, having paid only Kshs. 100,000 in four years

Reasoning

Applying the Giella v Cassman Brown principles, the Court noted that the questions of coercion versus voluntary retirement were for the full hearing of the Petition. Both parties asserted irreparable harm - loss of land versus carrying a non-performing loan. The decisive factor was the Applicant's lack of effort towards repaying the loan since leaving employment, which disentitled her to the discretionary relief of an injunction.

p. 3

Legal principles established

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  • The jurisdiction of the employment and labour relations court extends to all disputes emanating from the employment relationship, including ancillary matters such as employer-employee loans secured by a charge, so long as there is a legal nexus with the employment relationship
  • In granting an interlocutory injunction the court must be satisfied that the applicant is making effort towards ameliorating the situation complained of

Court orders

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  1. 1.The application for a temporary injunction restraining the Respondent from exercising its statutory power of sale was declined
  2. 2.No order for costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)(a)
  • Industrial Court Act, 2011Section 12(1)(a)
  • Land Act, 2012Section 90(1)
  • Civil Procedure RulesNot specified (relied on by Applicant; objected to as inapplicable in the Industrial Court)

Cases cited (2)

  • Abraham Nyambane Asiago Vs Barclays Bank of Kenya Limited
    [2013] eKLR
  • Giella Vs Cassman Brown & Co Ltd
Jurisdiction invoked
Article 162(2)(a) of the Constitution and Section 12(1)(a) 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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Cite this brief

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Cite this brief

Caselaw, "Nancy Waiyego Irungu v Old Mutual Life Assurance Co Ltd [2013] KEELRC 713 (KLR)", Case Analysis (2013). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/713/eng@2013-07-29

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