Oyuga & 46 others v Kenya Airways Company Limited (Employment and Labour Relations Cause 2390 of 2017) [2024] KEELRC 762 (KLR)
The bottom line
#A Kenyan employment court paused enforcement of a Ksh. 164 million award pending appeal, but only if the employer secures a bank guarantee within 30 working days.
What this practically means
#Executive summary
#Key legal issues
#Whether the Applicant demonstrated substantial loss
Yes - the questionable ability of the 47 Claimants to refund the decretal sum of over Ksh. 164,400,000 if the appeal succeeds exposes the Applicant to the risk of substantial loss
The Claimants' representative confirmed on oath that they were unemployed and had difficulty securing employment, and most Claimants provided no evidence of an asset base or of the value and encumbrance status of disclosed properties. Execution against such respondents followed by a successful appeal would necessitate protracted recovery proceedings with little guarantee of full recovery, rendering the appeal nugatory. This satisfies the substantial loss threshold under Order 42 rule 6(2).
Whether the application was filed without unreasonable delay
Yes - the application was filed approximately two months after judgment, a period explained by the Christmas break when time does not run
The application was filed on 7th February 2024, approximately two months after the judgment delivered on 16th November 2023. The court took into account the Christmas break, during which time does not run, and concluded that the delay was not unreasonable. This satisfies the second requirement of Order 42 rule 6(2).
Whether a bank guarantee constitutes suitable security for the performance of the decree
Yes - a renewable bank guarantee from a reputable financial institution acceptable to the Claimants sufficiently secures the decretal sum, given the large amount in controversy
The Claimants objected that bank guarantees lapse and expose the beneficiaries to loss, offering instead their own properties, logbooks, pay slips and mobile money business records as evidence of ability to refund. The court found these disclosures inconclusive and accepted that guarantees can be renewed. Considering the large decretal sum, the interests of both parties are best secured by a bank guarantee, issued within 30 working days on pain of the stay lapsing automatically.
Legal principles established
#- Substantial loss denotes loss resulting from the difficulty of reversing the consequences of execution of a decree that is ultimately reversed on appeal; it need not be an enormous loss
- Substantial loss does not have to be a lot of money; hardship in recovering the decretal sum after a successful appeal suffices
- A bank guarantee that can be renewed is sufficient security for performance of a decree pending appeal
Court orders
#- 1.Stay of execution of the court's decree pending hearing and determination of Civil Appeal No. E986 of 2023 at the Court of Appeal granted subject to conditions
- 2.The Applicant/Respondent to procure and issue to the Claimants, through their counsel, a suitable bank guarantee for performance of the decree should the appeal fail
- 3.The bank guarantee to be issued by a reputable financial institution acceptable to the Claimants, without obligating the Applicant to go outside its pre-qualified financial service providers, and the Claimants' concurrence not to be unreasonably withheld
- 4.The bank guarantee to be procured and issued within thirty (30) working days from the date of the order
- 5.Disagreements on the requirements to be resolved by the Deputy Registrar, failing which the matter may be escalated to the court
- 6.In default of issuing the bank guarantee within the timelines, the stay orders to automatically lapse and the Claimants to be at liberty to execute the decree
- 7.Costs of the application granted to the Claimants
- Jurisdiction invoked
- Section 12(3)(i) & (viii) of the Employment and Labour Relations Court Act, Rule 17 of the Employment and Labour Relations Court (Procedure) Rules, 2016 and Order 42 Rule 6(2) of the Civil Procedure Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Oyuga & 46 others v Kenya Airways Company Limited (Employment and Labour Relations Cause 2390 of 2017) [2024] KEELRC 762 (KLR)", Case Analysis (2024). Civil Appeal No. COACA/E986 of 2023 (pending before the Court of Appeal); originating ELRC decree of 16th November 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/762/eng@2024-04-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.