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Former Absa staff lose legal battle in Sh300m pay row

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Absa head office in Westlands, Nairobi. FILE PHOTO | NMG

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Summary

  • Former employees of Absa Kenya have lost a bid to move to the Supreme Court to challenge the reversal of a Sh300 million exit package following their retrenchment 10 years ago.
  • A bench of five judges of the Supreme Court dismissed the case by the 105 former employees, saying there was no issue of constitutional controversy, which was argued before both the High Court and Court of Appeal, requiring interpretation of the apex court.

Former employees of Absa Kenya have lost a bid to move to the Supreme Court to challenge the reversal of a Sh300 million exit package following their retrenchment 10 years ago.

A bench of five judges of the Supreme Court dismissed the case by the 105 former employees, saying there was no issue of constitutional controversy, which was argued before both the High Court and Court of Appeal, requiring interpretation of the apex court.

The former employees led Agnes Wachu Wamae sued the lender, seeking the re-evaluation of their exit packages after being declared redundant in 2011. They were given Sh301.8 million by the Employment and Labour Relations Court (ELRC) only for the Court of Appeal to overturn the amount.

The retirees then sought to be allowed by Supreme Court to challenge the decision, arguing that there conflicting decisions of the Court of Appeal on similar issues that require the Supreme Court’s final settlement, as a matter of public interest. The bank opposed the application.

“Applying this test to the matter under our review, we entertain no doubt that the Appeal does not meet the conditions articulated in these authorities.

“From ELRC to the appellate court, not a single question on the Constitution was pleaded, canvassed and determined. Indeed, no specific constitutional provisions were presented for interpretation or application,” said the judges led by Deputy Chief Justice Philomena Mwilu.

In the circular dated December 2010, the bank’s managing director informed those to be let go that the move was “due to pressure on margins, and the bank had embarked on a cost review exercise reviewing all key cost items, including staff costs.”

After being declared redundant, the retirees through Titus Koceyo sued the bank saying each of them was to get severance pay based on their salary and length of service.

They argued that although the termination was within the provisions of the Employment Act on redundancy, they accepted the offer believing the bank would compute their benefits properly under the Act.

The lawyer argued that the employer was required to pay each employee declared redundant 15 days salary for each year served and this, it was submitted, is a basic minimum in law.

Their bid was successful and the labour court judge agreed that they were entitled to more than what they received. The bank, however, appealed and three judges of the appellate court overturned the decision faulting the labour court judge over the calculations.