Mbugua & another v Standard Chartered Bank Limited (Cause E298 of 2023) [2023] KEELRC 442 (KLR)
The bottom line
#Kenya's Employment Court stopped a bank from charging a dismissed employee commercial interest rates on staff loans until his unfair dismissal case is heard.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction to grant interim injunction in employment-related contractual disputes
The Court has jurisdiction under Rule 17(5) and (6) of the ELRC (Procedure) Rules, 2016 to grant interim injunctions in suits arising from contractual disputes, including restraint on varying preferential staff interest rates
The Respondent argued the Court could not grant the orders as that would rewrite the parties' contract. The Court examined Rule 17(5) and (6), held that any person who has commenced a qualifying suit has a right to apply for an interim injunction, and dismissed the rewriting-of-contract objection as unconvincing.
Whether granting the injunction equates to reinstatement
Granting the interest-rate injunction does not amount to reinstatement; reinstatement means restoration of a former employee to the previous position after an unfair termination is adjudged
The Respondent contended the injunction would be tantamount to reinstating the Claimant and allowing him employee benefits. The Court defined reinstatement as restoration to a previous position after adjudged unfair termination and found the argument unconvincing, rejecting it. However, the instalment-reduction order could not be granted as it fell outside Rule 17(5).
Prima facie case
The Claimant established a prima facie case because the suit raises arguable issues on procedural and substantive fairness of the dismissal requiring investigation
Applying Mrao Ltd v First American Bank, the Court noted the suit invites consideration of the fairness of the dismissal, requiring examination of procedural and substantive fairness. As the matter is yet to be heard, the Court expressed itself in measured terms, concluding arguable issues exist.
Irreparable harm and balance of convenience
Rendering the Claimant and his young family destitute by sale of their home is harm not compensable by damages, and the balance of convenience favours the Claimant
The charged property is the family home. If commercial rates apply, repayment would be difficult given joblessness, risking auction and destitution. The Court found such harm incapable of adequate compensation in damages. Following Irene Njeri Njenga v DIB Bank, the Bank retains its securities and continues charging interest, so the balance of convenience favours the Claimant.
Legal principles established
#- A claimant who has commenced a suit of the nature described in Rule 17(5) of the ELRC (Procedure) Rules has a right to apply for an interim or temporary injunction
- Where substantive questions on the legality of a termination are raised, an injunction may restrain the employer from reverting staff loan rates to commercial rates pending determination
Court orders
#- 1.Temporary injunction restraining the Respondent, its servants or agents from levying any bank charges or interest on the Claimant's outstanding liabilities at any rate of interest save for the allowed staff interest of 6% per annum pending hearing and determination of the suit, taking effect on March 1, 2023
- 2.The suit to be heard on a priority basis, slated for hearing on May 17, 2023
- Jurisdiction invoked
- Rule 17(5) & (6) of the Employment and Labour Relations Court (Procedure) Rules, 2016
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbugua & another v Standard Chartered Bank Limited (Cause E298 of 2023) [2023] KEELRC 442 (KLR)", Case Analysis (2023). Cause No E298 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/442/eng@2023-02-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.