King’ori v Absa Bank Kenya PLC (Cause E647 of 2021) [2022] KEELRC 1262 (KLR)
The bottom line
#A Kenyan employment court barred a bank from raising a fired employee's staff loan rates or selling his home while the case is decided.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant established a prima facie case with probability of success
Yes - the Claimant's averments against the Respondent are not frivolous and call for rebuttal
Applying the Mrao Ltd definition, the court found the Claimant made several averments against the Respondent requiring interrogation and rebuttal. The claims were not frivolous, so a prima facie case with probability of success was established at the interlocutory stage, without determining the merits of the unfair termination and loan conversion claims.
Whether the Claimant would suffer irreparable loss not compensable by damages
Yes - the Claimant risks losing his home charged as security and being rendered homeless
The court accepted that the Claimant, having lost his source of income, faced loss of his matrimonial home which was charged to the Respondent, and the attendant loss of dignity and shame. The Respondent would in any event retain the house as security and could still charge commercial interest if the suit were dismissed.
Where the balance of convenience lies
In favour of the Claimant
The Respondent holds the Claimant's property as security and can always revert to commercial interest rates, whereas the Claimant, having lost his source of income, would be put to great strain meeting higher commercial-rate repayments. The balance of convenience therefore favoured maintaining the status quo pending trial.
Legal principles established
#- Preferential staff interest rates are a fringe benefit that ordinarily ceases upon termination of employment, but pending full hearing a court may restrain an employer from applying rates higher than those charged to current employees where the Giella conditions are met.
- The Giella v Cassman Brown conditions govern the grant of interlocutory injunctions.
Court orders
#- 1.The Respondent be and is hereby restrained from paying interest rates on the Claimant's loan facilities that is higher than that charged on similar facilities advanced to the Respondent's employees pending the hearing and determination of the claim herein
- 2.Order (i) is subject to the Claimant at all times being current in the repayment of the facilities as per the agreements in respect of the same
- 3.The prayers restraining the Respondent from referring the Claimant to the Credit Reference Bureau in the event of default are declined
- 4.The order for refund of Kshs.88,614/- to the Claimant is declined; the Respondent is however directed to give credit to the Claimant in respect of any monies paid over and above the instalments due based on the preferential staff interest rates
- 5.The Respondent is further restrained from selling the property known as Kajiado/kaputiei North/26811 (original M125685) provided the Claimant is up to date with repayment of instalments due based on the preferential staff interest rates
- 6.The parties will during the hearing address the Court on whether the Claimant is to continue to enjoy the staff preferential interest rates after the determination of this case
- 7.Costs of the application will be in the cause
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction founded on the employment relationship between the parties (Employment and Labour Relations Court Act; Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "King’ori v Absa Bank Kenya PLC (Cause E647 of 2021) [2022] KEELRC 1262 (KLR)", Case Analysis (2022). Cause No E647 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1262/eng@2022-07-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.