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ELRCPartially AllowedInterlocutory application in Claim ELRCC/E308/2022· [2023] KEELRC 3270 (KLR)

Jubilous v Cooperative Bank of Kenya Ltd (Employment and Labour Relations Cause 030 of 2023) [2023] KEELRC 3270 (KLR)

Employment and Labour Relations Court
11 December 2023
HWHellen Wasilwa
3,133 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan employment court blocked a bank from auctioning a former employee's property until his unfair dismissal case is decided.

What this practically means

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Executive summary

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This ruling by the Employment and Labour Relations Court (Hellen Wasilwa, J) determined a Notice of Motion dated 16th December 2022 brought by Jubilous Kiptoo, a former employee of the Respondent bank, in a pending unfair termination claim (ELRCC/E308/2022). Employed in 2011 and terminated on 17th February 2020 for unsatisfactory performance, the claimant had taken mortgage, staff and personal loans totalling approximately Kshs 4,960,000 at a 6% staff interest rate, secured by a charge over Title No. Kapsabet/Kapsabet Block 4 (Lemook 'A')/35. Upon termination, the bank converted the interest to commercial rates and demanded full repayment within three months, threatening auction. The applicant sought an injunction restraining sale, an order reversing commercial interest back to the staff rate, and a stay of loan repayment demands. The respondent, through its Legal Manager Duncan Matisero, opposed, arguing the staff rate lapsed on termination per the loan offer's special conditions, that the debt of Kshs 6,454,533.76 was admitted, and that any unfair termination award is capped at twelve months' gross salary (Kshs 2,017,186.20) under section 49(1)(c) of the Employment Act. Citing Giella v Cassman Brown, it contended no prima facie case or irreparable harm existed. The court, exercising its discretion, held the employer/chargee would suffer no prejudice from the injunction since its charge and statutory power of sale would survive if the claim failed. The court granted an injunction restraining sale or auction of the suit property until the claim is heard and determined, and ordered costs in the cause. The broader interest-reversal and repayment-freeze prayers were not granted in the final orders.

Key legal issues

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01

Whether an injunction should issue to restrain sale of charged property pending determination of an unfair termination claim

Holding

Yes. The court found no prejudice to the employer since the charge remains and the statutory power of sale survives; an injunction was granted until the claim is determined.

Reasoning

The court reasoned that the reason for the applicant's default is the contested termination which is pending before the court. Granting interim protection does not extinguish the chargee's rights: if the claim fails, or the security's full value is not realized, the bank may still exercise its statutory power of sale. Accordingly the balance of discretion favoured preserving the property until the primary dispute is resolved.

p. 6
02

Whether the court is bound by the Giella v Cassman Brown principles in exercising discretion

Holding

The court did not apply the principles rigidly as the respondent urged; it exercised discretion on the overall circumstances, finding no prejudice to the respondent.

Reasoning

The respondent argued the Giella conditions - prima facie case, irreparable injury and balance of convenience - were not met, relying on the admitted debt and the adequacy of damages. The court, however, looked at the totality of the circumstances and exercised its discretion to grant the injunction, resting on the absence of prejudice to the bank rather than on a formal analysis of each Giella condition.

p. 6

Legal principles established

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  • Where the fairness of a termination is pending determination, an employer/chargee suffers no prejudice from being restrained from exercising its statutory power of sale pending the claim, since it retains the charge and may still exercise the power if the claim fails

Court orders

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  1. 1.An injunction prohibiting the respondents by themselves and/or their recognized agents and/or principals from selling and/or attempting to sell and/or auction the properties of Jubilous Kiptoo, Title No. Kapsabet/Kapsabet Block 4 (Lemook 'A') 35 until the claim is heard and determined
  2. 2.Costs in the cause

Authorities

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Legislation

  • Employment and Labour Relations Court ActSection 12(4)
  • Employment and Labour Relations Court (Procedure) Rules 2016Sections 17 and 28
  • Labour Relations Act No. 14 of 2007Section 74
  • Employment Act, 2007Section 49(1)(c)

Cases cited (6)

  • Giella vs Cassman Brown & Co. Ltd
    [1973] EA 358
  • Banking Insurance and Finance Union v Consolidated Bank of Kenya Limited
    [2020] eKLR
  • East African Development Bank v Hyundai Motors Kenya Limited
    [2006]
  • National Bank Of Kenya Ltd Pipeplastic Samkolit (K) Ltd & Another
    [2001] eKLR
  • AL-Jalal Enterprises Limited v Gulf African Bank Limited
    [2014] eKLR
  • Bii v Kenya Commercial Bank Ltd
    [2001] KLR 458
Jurisdiction invoked
Section 12(4) of the Employment and Labour Relations Court Act, Sections 17 and 28 of the Employment and Labour Relations Court (Procedure) Rules 2016 and Section 74 of the Labour Relations Act No. 14 of 2007

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, "Jubilous v Cooperative Bank of Kenya Ltd (Employment and Labour Relations Cause 030 of 2023) [2023] KEELRC 3270 (KLR)", Case Analysis (2023). Interlocutory application in Claim ELRCC/E308/2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3270/eng@2023-12-11

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