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ELRCDismissedNot stated in the judgment as provided· [2022] KEELRC 36 (KLR)

Maiyo v Kenya Commercial Bank & another; William Osiemo t/a William Auctioneers (Interested Party) (Cause 632 of 2019) [2022] KEELRC 36 (KLR)

Employment and Labour Relations Court
12 May 2022
LNLINNET NDOLO
1,787 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan employment court refused to stop a bank from selling a former employee's staff-mortgage home because she had stopped repaying the loan.

What this practically means

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Executive summary

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The Claimant, a former employee of the 1st Respondent bank, moved the Court by Notice of Motion dated 22nd September 2021 seeking a temporary injunction restraining the bank from auctioning, advertising, selling or otherwise dealing with L.R. Kitale Municipality Block 15/Koitogos/1537 pending determination of her suit. She contended that she was constructively dismissed in 2019, that her staff mortgage was serviced by check-off against her salary, and that the impending sale at a reserve price of Kshs 5,250,000 would cause her irreparable damage. The 1st Respondent, through a replying affidavit by Robley Ngoje, challenged the Court's jurisdiction, asserting the dispute concerned the exercise of statutory power of sale under the charge and further charge and belonged in the Commercial Division of the High Court. On jurisdiction, the Court held, relying on its own precedent and Rika J's decision in BIFU v Consolidated Bank, that staff loans flow from the employment relationship and that where the dominant cause of action arises from employment, its jurisdiction covers such auxiliary matters. On the merits, applying Giella v Cassman Brown and Mrao, the Court found the Claimant had failed to demonstrate a prima facie case, noting she had not serviced her loans even at preferential staff rates. Citing Elijah Arap Bii and Jacob Kelly Omondi Onyango, the Court held a perpetual defaulter undeserving of equitable relief. The application was declined with costs in the cause and the interim orders of 19th October 2021 were vacated.

Key legal issues

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01

Jurisdiction of the ELRC over disputes concerning staff loans and statutory power of sale

Holding

The Court has jurisdiction where the dominant cause of action arises from employment, even where the subject matter involves exercise of statutory power of sale over a charged property

Reasoning

The Court anchored its jurisdiction in Article 162(2)(a) and Section 12(1)(a) of the ELRC Act. Relying on Abraham Nyambane Atsiago v Barclays Bank and BIFU v Consolidated Bank, it held that staff loans flow from the employment relationship as an employment benefit enjoyed through preferential rates, so rights and obligations arising from such arrangements fall within the Court's jurisdiction.

p. 4
02

Whether a temporary injunction should issue to restrain sale of the charged property

Holding

No injunction granted; a borrower in perpetual default of staff loans is undeserving of equitable relief

Reasoning

Applying Giella v Cassman Brown and Mrao v First American Bank, the Court found no prima facie case with probability of success. It noted the Claimant had not paid her loans since leaving employment even at preferential rates, and invoked Ringera J in Elijah Arap Bii and this Court's decision in Jacob Kelly Omondi Onyango that perpetual defaulters should not be sheltered by injunction.

p. 4

Legal principles established

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  • Where the dominant cause of action arises from employment, the ELRC's jurisdiction extends to auxiliary matters such as loans granted to employees by virtue of their employment

Court orders

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  1. 1.Application dated 22nd September 2021 declined with costs in the cause
  2. 2.Interim orders granted on 19th October 2021 vacated

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(a)
  • Employment and Labour Relations Court ActSection 12(1)(a)
  • Land Actstatutory notices (not specified)

Cases cited (7)

  • Abraham Nyambane Atsiago v Barclays Bank of Kenya
    [2013] eKLR
  • Banking Insurance & Finance Union (Kenya) v Consolidated Bank of Kenya Limited
    Cause No 900 of 2012
  • Giella v Cassman Brown & Co Ltd
    (1973) EA, 358
  • Mrao v First American Bank of Kenya Limited & 2 others
    (2003) KLR 125
  • Elijah Arap Bii v Kenya Commercial Bank
    [2001] eKLR
  • Jim Kennedy Kiriro v Equity Bank (K) Limited
    [2019] eKLR
  • Jacob Kelly Omondi Onyango v National Bank of Kenya
    [2017] eKLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution and Section 12(1)(a) of the Employment and Labour Relations Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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

Cite this brief

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Cite this brief

Caselaw, "Maiyo v Kenya Commercial Bank & another; William Osiemo t/a William Auctioneers (Interested Party) (Cause 632 of 2019) [2022] KEELRC 36 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/36/eng@2022-05-12

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