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ELRCDismissedNot stated in judgment (application dated 25 September 2019)· [2019] KEELRC 444 (KLR)

Banking, Insurance & Finance Union v Guardian Bank Limited [2019] KEELRC 444 (KLR)

Employment and Labour Relations Court
1 November 2019
714 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that when a bank takes over another and offers fresh employment terms, the old retirement age no longer applies.

What this practically means

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Executive summary

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The Banking, Insurance & Finance Union (Kenya), acting for its member Rose Nyambura (the Grievant), moved the Employment and Labour Relations Court in Nairobi by a notice of motion dated 25 September 2019 seeking to restrain Guardian Bank Ltd from retiring her at age 55, asserting a normal retirement age of 60 years. The dispute arose from Guardian Bank's takeover of First National Finance Bank Ltd, under which the Grievant's contract had specified retirement at 60. On 20 February 2001 Guardian Bank expressly offered continued employment on its own terms and conditions, which the Grievant accepted. The Court found, and it was not disputed, that the 60-year retirement age under the original contract did not survive that 2001 offer of fresh terms. Guardian Bank's Human Resources Policy (clause 23.0) provided for retirement at 55, with discretionary re-employment on contract limited to senior management II staff and capped at 70 years. The Union led no evidence that the Grievant was in senior management II, no unfair exercise of the Committee's discretion was suggested, and re-employment would in any event have constituted a fresh contract. The Court therefore held that the Union had failed to establish a prima facie case warranting interlocutory interdicts. The application dated 25 September 2019 was dismissed with no order as to costs, and the Court ordered that any remuneration paid to the Grievant beyond the retirement date, by virtue of the interim court order, should not be recovered from her. Judgment was delivered by Radido Stephen, Judge, in Nairobi on 1 November 2019.

Key legal issues

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01

Whether the 60-year retirement age from the First National Finance Bank contract continued after the takeover

Holding

It did not; the Grievant accepted fresh terms from Guardian Bank Ltd on 20 February 2001.

Reasoning

The Respondent expressly offered to continue the Grievant's employment but on the terms and conditions applicable to its other staff, and the Grievant accepted. The Court therefore held that the earlier contractual retirement age of 60 years did not survive that fresh offer of employment.

p. 1
02

Whether the Grievant qualified for re-employment on contract under clause 23.0 of the Human Resources Policy

Holding

No; eligibility was limited to senior management II employees and re-employment was a discretionary fresh contract.

Reasoning

The Union adduced no evidence that the Grievant was part of senior management II. Even if she had been, the Human Resources Committee had sole discretion to re-employ, no unfair exercise of that discretion was suggested, and re-employment under clause 23.0 would in any event constitute a fresh contract.

p. 2
03

Whether interlocutory relief should issue

Holding

No prima facie case was shown; the application was dismissed.

Reasoning

Having found the applicable retirement age to be 55 under the Respondent's policy, and no entitlement to re-employment, the Union failed to establish a prima facie case with a probability of success to justify the interdicts at the interlocutory stage.

p. 2

Legal principles established

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  • Where an employer takes over a business and expressly offers continued employment on its own terms and conditions, the terms of the former employment contract, including retirement age, do not survive unless carried over.
  • A failure to show a prima facie case disposes of an interlocutory injunction application.

Court orders

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  1. 1.The application dated 25 September 2019 is dismissed with no order as to costs
  2. 2.Any remuneration paid to the Grievant beyond the retirement date, on the strength of the court order, should not be recovered from her
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Act (not expressly quoted in 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, "Banking, Insurance & Finance Union v Guardian Bank Limited [2019] KEELRC 444 (KLR)", Case Analysis (2019). Not stated in judgment (application dated 25 September 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/444/eng@2019-11-01

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