Gladys Muthoni Mwangi and 20 others v Barclays Bank of Kenya Limited & another [2018] KEELRC 992 (KLR)
The bottom line
#The court dismissed former Barclays employees' application as premature because they had not yet extracted the Court of Appeal's order before asking for their dues to be computed and paid.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether this Honourable Court having delivered a final judgment on 30th June 2016 is now functus officio
- 2.Whether the Applicants/Petitioners are entitled to the prayers sought in the Application dated 18th April 2018
- 3.Whether the Court has jurisdiction to determine issues of taxation of income arising from employment
Key legal issues
#Functus officio and settlement of the amended decree
The application is premature: the Court of Appeal's decision must first be extracted as an order/decree under Rules 33 and 34 of the Court of Appeal Rules before this court can settle terms of the amended decree
The court reasoned that settling terms of the decree as revised by the Court of Appeal would require interpreting the appellate decision, which is not this court's responsibility under the Court of Appeal Rules. Every decision on an appeal must be embodied in an order, and the successful party must prepare a draft for approval. Only upon receipt of the extracted order/decree may the court settle terms together with the amended decree of the trial court.
Computation of individual dues
Prayer for computation and payment per the Petitioners' schedule cannot be granted before extraction of the Court of Appeal order
The court held that computation of each petitioner's dues must be anchored on an extracted order from the Court of Appeal judgment, as that order would form the basis of the computation. Absent that order, granting the prayer would require the trial court to interpret the appellate judgment, which it has no jurisdiction to do. The prayer was therefore disallowed as premature.
Transfer of motor vehicles at book value with insurance
Refused; book value is at the time of possession, insurance was never ordered, and the December 2016/January 2017 agreements on the vehicles cannot be varied absent an application to set them aside
The court found that the original judgment mentioned only transfer at book value, not insurance. Book value is assessed at the time the petitioners took possession of the vehicles, which they have continuously used. Further, specific sums were agreed in negotiations in December 2016/January 2017, which was not a subject of the appeal, and there is no application for setting aside those agreements, so the court cannot vary them.
Jurisdiction over taxation of employment income
The court has jurisdiction over taxation of income arising from employment, but the refund claims should be pursued with the Kenya Revenue Authority
Rejecting the respondents' objection, the court held that Sections 19 and 49(2) of the Employment Act provide for statutory deductions including tax on employment income, conferring jurisdiction. However, the petitioners' claims for refund of tax already remitted to KRA and for application of 2018 tax bands should have been raised with KRA before the deductions were made. Having failed to do so, and the respondent having complied with the law, the petitioners can only follow up with KRA under the relevant regulations.
Interest on the decretal sums
Interest was not part of the decree and can only be considered on an application for review
The court noted that the issue of interest was not a subject of its decree and could only be considered on an application for review. The respondents had also submitted that the claim for interest could not be brought once the matter was concluded and that the petitioners had the opportunity to seek interest in their petition but did not. The prayer was consequently refused.
Legal principles established
#- A court cannot settle terms of a decree revised on appeal until the appellate court's decision has been embodied in an extracted order or decree
- The Employment and Labour Relations Court has jurisdiction to adjudicate on taxation of income arising from employment
- Book value of a motor vehicle transferred as a benefit is the value at the time the employee took possession
Court orders
#- 1.The application dated 18th April 2018 is dismissed
- 2.There shall be no orders for costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Sections 19 and 49(2) of the Employment Act, 2007 (employment and labour relations jurisdiction); Court of Appeal Rules Rules 33 and 34 considered
Relief refused
#Settlement of terms of the Amended Decree as revised by the Court of Appeal judgment of 16th March 2018
An order or decree of the Court of Appeal must first be extracted before this court can settle terms; acting on an unextracted judgment would exceed the court's jurisdiction
Computation, determination and payment of each Petitioner's dues per the schedule at page 89 of annexure RG1
Computation can only be done after extraction of an order from the Court of Appeal judgment
Transfer of motor vehicles at book value with fully paid up insurance
The judgment did not mention insurance; book value is at the time of taking possession, and agreements of December 2016/January 2017 on the vehicles were not appealed and cannot be varied absent an application to set them aside
Leave to execute via attachment before taxation
Prayer rendered redundant by the above findings
Refund of tax deducted and taxation using 2018 income tax bands
Petitioners should have raised the issue with the Kenya Revenue Authority before deductions were made; they can only follow it up with KRA
Interest at 12% (or 6% per annum) on the dues
Interest was not part of the decree and can only be considered on an application for review
Costs
There shall be no orders for costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
From the foregoing, I find that the application is premature, has no merit and dismiss the same.
The dismissal of the application does not preclude the applicants from making another application at the appropriate time for similar orders after extracting an order/decree on the appeal decision. There shall be no orders for costs.
To act on the unextracted judgment of the Court of Appeal would imply that this court would be taking on a responsibility that it has no jurisdiction to perform.
Sections 19 and 49(2) specifically provide for statutory deductions, which include tax on employment income. To that extent, this court has jurisdiction to adjudicate on taxation of income arising from employment.
The issue of taxation and interest were also not subject of the decree of this court and can only be considered on an application for review.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gladys Muthoni Mwangi and 20 others v Barclays Bank of Kenya Limited & another [2018] KEELRC 992 (KLR)", Case Analysis (2018). Petition No. 25 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/992/eng@2018-10-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.