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ELRCDismissedNot stated in the judgment· [2018] KEELRC 2310 (KLR)

Francis Nzuki Mulu and 43 others (Being Former Employees of Dubai Bank Kenya Limited In Liquidation) v Kenya Deposit Insurance Corporations & 2 others [2018] KEELRC 2310 (KLR)

Employment and Labour Relations Court
2 March 2018
MNMathews N. NdumaMOMaureen Onyango
475 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court refused to order a Kshs. 50 million deposit, saying workers must first use the Employment Act's statutory procedure before turning to court.

What this practically means

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Executive summary

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The claimant, in an employment claim arising from the receivership of a bank, moved the Employment and Labour Relations Court by notice of motion seeking, first, certification as urgent and ex-parte hearing, and second, an order that the 1st, 2nd and 3rd respondents jointly and severally deposit Kshs. 50,000,000 in court as security sufficient to satisfy any decree for unpaid salaries, leave, notice pay and compensation. The application was supported by an affidavit sworn on 5/12/2016 and opposed by the 2nd respondent, Adam Boru, who deponed that the 1st respondent, Kenya Deposit Insurance Corporation, is a government corporation able to meet its financial obligations without depositing security, that it remains committed to settling the salary claims of employees under receivership, and that insured depositors take first priority. The 3rd respondent urged that the claimants apply to the Cabinet Secretary under sections 66 to 73 of the Employment Act, 2007, and that the application was premature. The court agreed, holding that the claimants ought to follow the statutory procedure under sections 66 to 73 and continue pursuing the ongoing out-of-court settlement. The application was found to lack merit and was dismissed with no orders as to costs, with a direction that the main suit be set down for hearing on a priority basis if settlement is not reached. The judgment was signed by Mathews N. Nduma in Kisumu on 6 February 2018 and delivered by Maureen Onyango in Nairobi on 2 March 2018.

Key legal issues

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Prematurity of an application for deposit of security pending an employment claim against an entity under receivership

Holding

The application was premature; the claimants must first invoke the procedure under sections 66-73 of the Employment Act, 2007 and continue pursuing out-of-court settlement

Reasoning

The 1st respondent, a government corporation under receivership, affirmed it could meet its obligations and was committed to settling salary claims, with insured depositors taking first priority. The 3rd respondent invited the claimants to apply to the Cabinet Secretary under sections 66 to 73 of the Employment Act. The court found the statutory route and the ongoing settlement negotiations should be exhausted first, and dismissed the motion without costs.

p. 2

Legal principles established

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  • Where the Employment Act prescribes a procedure for claims arising from receivership/insolvency of an employer, that procedure must be pursued before applying to court for interlocutory security

Court orders

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  1. 1.The application is dismissed with no orders as to costs
  2. 2.The main suit to be set down for hearing on a priority basis if settlement is not arrived upon

Authorities

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Legislation

  • The Employment Act, 2007sections 66 to 73
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment claims (statutory basis not expressly cited in the judgment)

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, "Francis Nzuki Mulu and 43 others (Being Former Employees of Dubai Bank Kenya Limited In Liquidation) v Kenya Deposit Insurance Corporations & 2 others [2018] KEELRC 2310 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2310/eng@2018-03-02

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