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ELRCPartially AllowedNot stated in the judgment· [2023] KEELRC 2524 (KLR)

Omwikwesakwa v Afya Sacco Ltd (Cause 872 of 2019) [2023] KEELRC 2524 (KLR)

Employment and Labour Relations Court
19 October 2023
ANAbuodha Jorum Nelson
1,652 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court stopped an auction of a former employee's home, confirming staff housing loans fall within employment disputes.

What this practically means

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Executive summary

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The Claimant, a former employee of the Respondent from 1st August 2002 until termination on 25th June 2019, obtained a staff housing loan as a term of employment, purchased LR Ngong/Ngong/38885 and built his matrimonial home, secured by a legal charge. After termination, he defaulted on the loan, and on 5th May 2023 was served with a default and statutory notice to sell. He filed two applications seeking a temporary injunction restraining the Respondent from alienating, selling or interfering with the property, and an order for a breakdown of the loan repayments. The Respondent objected that the ELRC lacked jurisdiction (invoking Articles 165(5)(b) and 162(2)(a) of the Constitution), that the dispute belonged to the Environment and Land Court or the Co-operative Tribunal, and that the applications were res judicata given a similar application dated 20th December 2019. The court framed three issues: jurisdiction, res judicata and entitlement to relief. Relying on Owners of Motor Vessel 'Lillian S' and following Abraham Nyambane Asiago v Barclays Bank of Kenya, it held the dispute arises from the employer-employee relationship and within ELRC jurisdiction. It found no res judicata since the 2019 application was withdrawn by consent and never heard on merit. Applying Giella v Cassman Brown and Mrao Ltd, it found a prima facie case and irreparable harm in the threatened loss of the matrimonial home, and granted an injunction restraining the sale until determination of the main suit, with costs to abide the outcome of the main suit.

Key legal issues

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01

Jurisdiction of the ELRC over staff loan/charge disputes

Holding

The court has jurisdiction because the dispute emanates from the employer-employee relationship; the loan was available only to employees

Reasoning

The court applied Owners of Motor Vessel 'Lillian S' v Caltex Oil on jurisdiction and followed Abraham Nyambane Asiago v Barclays Bank of Kenya Ltd, where an injunction was granted in identical circumstances involving a staff housing loan recalled after termination of employment. The facility's availability exclusively to employees anchored the dispute in employment and labour relations.

p. 3
02

Res judicata

Holding

No res judicata; the earlier application of 20th December 2019 was withdrawn by consent and never heard on merit

Reasoning

Under section 7 of the Civil Procedure Act, res judicata bars multiple suits on the same subject matter, but the prior application was withdrawn on 25th February 2020 by consent to allow settlement and fast-tracking of the main suit. The Respondent's breach of that understanding and renewed auction threats justified the Applicant returning to court.

p. 3
03

Entitlement to interlocutory injunction

Holding

A prima facie case and irreparable harm were established; injunction granted pending hearing of the main suit

Reasoning

Applying Giella v Cassman Brown and Mrao Ltd v First American Bank of Kenya, the court found that the threatened sale of the Applicant's matrimonial home, financed through employment benefits, disclosed a right apparently infringed calling for rebuttal. Loss of the family home could not be adequately compensated by damages, satisfying the irreparable harm test.

p. 4

Legal principles established

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  • An ELRC court has jurisdiction over disputes concerning staff housing loans granted as an incident of employment, even where the relief concerns land
  • A withdrawn application never heard on merit does not create res judicata

Court orders

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  1. 1.The Respondent and/or its agents or servants restrained from auctioning and/or selling property known as Ngong/Ngong 38885 situate at Kajiado County until hearing and determination of the main suit
  2. 2.Costs of the application to abide the outcome of the main suit
Jurisdiction invoked
Article 162(2)(a) of the Constitution; section 12(1)(a) Industrial Court Act, 2011

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, "Omwikwesakwa v Afya Sacco Ltd (Cause 872 of 2019) [2023] KEELRC 2524 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2524/eng@2023-10-19

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