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Court spares National Bank of Kenya Sh1b suit payment

By Macharia Kamau | Published Thu, December 7th 2017 at 00:00, Updated December 6th 2017 at 19:27 GMT +3
National bank banking hall Harambee avenue branch taken on 1st September 2015. [PHOTO:WILBERFORCE OKWIRI]

In summary

  • Court of Appeal sets aside February ruling by lower court
  • Former employees claimed voluntary retirement scheme was discriminatory and sought damages for unfair termination.

National Bank of Kenya (NBK) has been spared from paying Sh1 billion to former employees, who left the bank under a voluntary retirement programme in 2014 but later moved to court claiming unfair termination.

The Court of Appeal on December 1 overturned a ruling by the Employment and Labour Relations Court in February 2017 that awarded close to Sh1 billion in compensation to 190 employees.

The former employees had moved to court in early 2014, seeking damages for unfair retirement and discrimination under the Voluntary Early Retirement (VER) scheme offered by the bank.

They said the bank accepted their VER on terms that were not only discriminatory but in breach of its Human Resource (HR) Manual, Collective Bargaining Agreement (CBA) and the Constitution and the Employment Act, 2007.

In her judgment, Justice Monica Mbaru of the Employment and Labour Relations Court said the former employees were discriminated against and unfairly treated when they were sent on voluntary retirement.

“To engage an employee on inferior or unfavourable terms and conditions of employment is a practice that cannot find justification in law and in fair labour practices.Such should be frowned upon and not receive the sanction of the court,” she said.

Accepted terms

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But in their ruling, appellate judges Alnashir Visram, Wanjiru Karanja and Martha Koome said the respondents accepted the terms offered in the circular according to their respective applications as well as acceptance letters issued by the bank.

“In our view, there was no evidence of undue influence or coercion which diminished the respondents’ capacity to voluntarily accept the terms in question,” said the judges while setting aside the earlier ruling.

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