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ELRCPartially AllowedELRC Cause No. 234 of 2018· [2018] KEELRC 912 (KLR)

Banking, Insurance & Finance Union (K) v Bank of Baroda (K) Ltd & another [2018] KEELRC 912 (KLR)

Employment and Labour Relations Court of Kenya
4 October 2018
HWHellen S. Wasilwa
3,649 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Employment Court ruled that retiring some bank employees at 55 and others at 60 based on origin was discrimination, and retirement age must be negotiated.

What this practically means

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Executive summary

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The Banking, Insurance & Finance Union (K) (BIFU) sued Bank of Baroda (K) Ltd and the Kenya Bankers Association seeking a declaration that all employees of the 1st Respondent bank retire at 60 years (with an early retirement option at 50) and that retirement age be adopted as a negotiable item for inclusion in future CBAs. The Claimant argued that Asian-origin employees of the bank retire at 60 while Kenyan employees retire at 55, amounting to discrimination under Article 27 of the Constitution, Section 5(2) of the Employment Act and ILO Convention No. 111, and that only 3 of about 43 KBA member banks retire staff at 55. The Respondents countered that there is no constitutional or statutory mandatory retirement age in the private sector; retirement age is a contractual matter tied to pension schemes and is one of the non-negotiable items under the CBA's Appendix B(4); and that differing terms for expatriates contracted in India are not discriminatory. The Court framed two issues: discrimination in retirement age, and whether retirement age should be a negotiable CBA item. It found the two-tier retirement age discriminatory, rejecting the India-contract explanation since both Kenya and India have ratified ILO Convention No. 111. On negotiability, the Court reasoned that since duration of individual contracts is a listed negotiable item in the 2017 CBA, retirement age, which informs contract duration, is likewise negotiable. The Court declared the differential retirement age discriminatory and confirmed retirement age as a negotiable item, with costs to the Claimants.

Key legal issues

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01

Whether the differing retirement ages of Asian-origin and non-Asian employees of the 1st Respondent constitute discrimination

Holding

Yes - the two-tier retirement age is discriminatory on the basis of national extraction/origin.

Reasoning

The Court found as a fact that Asian-origin employees of the bank retire at 60 while Kenyan employees retire at 55. Article 27 of the Constitution forbids discrimination on grounds including ethnic or social origin, and ILO Convention No. 111, ratified by Kenya on 7th May 2001 and by India on 3rd June 1960, defines discrimination to include distinctions based on national extraction. The explanation that Indian contracts were signed in India could not stand, and no special circumstances justified differing retirement ages within the same sector and employer.

p. 5
02

Whether retirement age is a negotiable item under the CBA between the Claimant and the 2nd Respondent

Holding

Yes - retirement age is a negotiable item under the CBA.

Reasoning

The Court examined the CBA of 16th August 2017, whose Appendix A lists negotiable items. Item 4 includes duration of individual contracts as negotiable. Since retirement age determines the duration of an individual contract, retirement age is itself an item for negotiation and must be a subject of negotiation between the parties.

p. 5

Legal principles established

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  • A two-tier retirement age for employees of the same employer constitutes discrimination under Article 27 of the Constitution and ILO Convention No. 111
  • Where no constitutional or statutory mandatory retirement age applies in the private sector, retirement age is a contractual term, but where it informs the duration of individual contracts listed as a negotiable item in the CBA, it is subject to negotiation

Court orders

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  1. 1.A declaration that the action of the 1st Respondent in subjecting certain employees to a retirement age of 55 and others at 60 is discriminatory
  2. 2.A finding that the retirement age should be viewed as a negotiable item as per the parties' CBA
  3. 3.Costs of the claim to the Claimants

Authorities

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Legislation

  • Constitution of KenyaArticle 27
  • Constitution of KenyaArticle 2(5) and (6)
  • Employment Act No. 11 of 2007Section 5(2)
  • Employment Act 2007Section 10(5)
  • NSSF Actminimum age of 50 years for payment of age benefit
  • ILO Convention No. 111 (1958) on Discrimination (Employment and Occupation)Article 1 and Article 6

Cases cited (4)

  • Olpejeta Ranching Ltd v David Wanjau Muhoro
    Civil Appeal No. 42 of 2015
  • Telkom Kenya Ltd v John O. Ochanda and Others
    Civil Appeal No. 207 of 2012
  • Michael Kagoma Maina v Kenya Police Service, Public Service Commission & Honourable Attorney General
    ELRC Nakuru Cause No. 49 of 2013
  • James Kabengi Mugo v Syngenta East Africa Limited
    Nairobi High Court Cause 1476 of 2011
Jurisdiction invoked
Article 162(2) of the Constitution establishing the Employment and Labour Relations Court (implied by the court's jurisdiction over employment disputes)

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, "Banking, Insurance & Finance Union (K) v Bank of Baroda (K) Ltd & another [2018] KEELRC 912 (KLR)", Case Analysis (2018). ELRC Cause No. 234 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/912/eng@2018-10-04

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