Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedPetition/Application dated 29th November 2017 (number not stated in the judgment)· [2019] KEELRC 2490 (KLR)

Beatrice Wangui Mwihia v Barclays Bank of Kenya [2019] KEELRC 2490 (KLR)

Employment and Labour Relations Court
29 January 2019
MOMAUREEN ONYANGO
2,896 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

#

A Kenyan court stopped Barclays Bank from raising a former employee's staff loan interest rate or selling her home until her unfair termination case is decided.

What this practically means

#

Executive summary

#
The Applicant, a former employee of Barclays Bank of Kenya, moved the Employment and Labour Relations Court by Notice of Motion under Articles 22, 23(3), 35 and 258 of the Constitution seeking an interlocutory injunction restraining the bank from charging customer-rate interest (10% plus a 4% margin) on her Staff Housing Loan and Credit Card in place of the staff rate of 6%, and from threatening to list her with the Credit Reference Bureau or repossess her home on LR No. 27759 Unit 160 Water Front Gardens Loresho. She argued the loan was an employment benefit carrying a legitimate expectation of the staff rate, and that her March 2017 termination on grounds of underperformance precipitated the unlawful variation. The Respondent countered that the loan agreement was a separate commercial contract under which the preferential rate ceased on termination, and that the ELRC lacked jurisdiction over the commercial dispute. Framing two issues - jurisdiction and entitlement to injunctive relief - the court, Maureen Onyango J, held that employment relations extend beyond the contract of service to staff loans, citing Asiago, Biko and Kimaile, and that the bank's entitlement to vary rates depends on the lawfulness of the termination, still pending in the petition. Finding the Applicant faced irreparable loss of her family home, the court granted the injunction restraining reversion of interest rates and any dealing with the Loresho property pending determination of the petition. However, it declined to restrain CRB listing, the bank being statutorily obliged under Section 31(5) of the Banking Act to report defaulters. Costs were reserved to the cause.

Key legal issues

#
01

Jurisdiction of the ELRC over variation of staff loan interest rates after termination of employment

Holding

The court found it has jurisdiction, since the loan facility was extended within the employer-employee relationship and employment relations extend beyond the contract of service to employment benefits such as staff loans

Reasoning

Article 162(2)(a) confers jurisdiction over disputes relating to or arising out of employment. Relying on Abraham Nyambane Asiago, Boniface Lum Amunga Biko and the passage quoted from Wilbert Kipsang Choge, the court reasoned that staff loan facilities cannot be divorced from the core employment relationship. Whether the preferential rate can be varied depends on whether the termination was lawful and fair, a matter to be determined in the pending petition.

p. 2
02

Entitlement to interlocutory injunction restraining reversion of interest rates and realisation of the charged home

Holding

Injunction granted on the interest rate and the Loresho property, but not against CRB listing

Reasoning

The court found the Applicant risked losing her family home and would suffer loss not compensable in damages. However, the Respondent is statutorily obliged under Section 31(5) of the Banking Act to report a defaulting borrower to the CRB, so no injunction lies against that disclosure. The injunctive relief was granted pending hearing and determination of the petition.

p. 3

Legal principles established

#
  • Employment relations is a wide concept not restricted to the contract of service; the ELRC has jurisdiction over interest rates applicable to staff loans of employees and former employees
  • An employer bank can only vary preferential interest rates granted to a former employee if it terminated the employment lawfully and fairly

Court orders

#
  1. 1.Pending the hearing and determination of the petition, the Respondent, whether by itself, its servants, agents, advocates or any other person acting on its behalf, is restrained by an order of injunction from charging interest rate on the Staff Housing Loan at 10% plus a margin of 4% or any other rate of interest save the allowed charges for staff accounts and the staff interest rate of 6%
  2. 2.The Respondent is restrained from repossessing, offering for sale, selling, transferring, disposing of or in any other manner alienating or encumbering the Applicant's family home being LR No. 27759 Unit 160 Water Front Gardens Loresho
  3. 3.Costs shall be in the cause

Authorities

#

Legislation

  • Constitution of Kenya, 2010Articles 22, 23(3), 35, 162(2)(a), 258
  • Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedures Rules, 2013Rules 13, 19, 23, 24
  • Civil Procedure Rules, 2010Rule 3(1)
  • Fair Administrative Action ActSections 4(1)(g), 6
  • Employment ActSection 87(2)
  • Labour Institutions Act, 2007Section 12
  • Industrial Court ActSections 4(1), 12
  • Banking ActSection 31(5)
  • The Banking (Credit Reference Bureau) Regulations, 2013Not specified

Cases cited (10)

  • Boniface Lum Amunga Biko vs National Bank of Kenya Limited
    [2017] eKLR
  • Wilbert Kipsang Choge & 6 others v Communications Authority of Kenya & another
    [2016] eKLR
  • Christopher Onyango & Others vs Heritage Insurance Co Ltd
    Cause No. 718 of 2015
  • Giella v Casman Brown & Co. Ltd
    (1973) EA 358
  • Samson Onyango Ngonga v Public Service Commission & 5 Others
    [2013] eKLR, Petition 459 of 2011
  • Morris and Co Ltd v Kenya Commercial Bank Ltd & Others
    [2003] 2 EA 605
  • Kenya Airways vs. Donald Osewe Oluoch
    [2010] eKLR
  • Abraham Nyambane Asiago –v- Barclays Bank of Kenya Limited
    [2013] eKLR
  • Eliud Kimaile -v- Cooperative Bank of Kenya Limited
    [2017] eKLR
  • Timothy John Sati vs. Barclays Bank Kenya Limited
Jurisdiction invoked
Article 162(2)(a) of the Constitution of Kenya, 2010

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (7)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Beatrice Wangui Mwihia v Barclays Bank of Kenya [2019] KEELRC 2490 (KLR)", Case Analysis (2019). Petition/Application dated 29th November 2017 (number not stated in the judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2490/eng@2019-01-29

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