Gisemba v Tausi Assurance Company
The bottom line
#Kenya's Court of Appeal upheld a Ksh. 1.2 million unfair termination award, confirming staff mortgage disputes belong in the employment court.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the award given in the employment and labour relations court for unfair termination of employment ought to be enhanced
- 2.Whether the trial court had jurisdiction to deal with the matter of property no. Ngong/Ngong/29503
- 3.Who bears the costs of this suit
Key legal issues
#Whether the compensation award of three months' gross salary for unfair termination should be enhanced
The award was fair and justified in the circumstances; the appellate court declined to interfere.
The learned Judge considered all the evidence, the circumstances preceding the dismissal, and the section 45(5) Employment Act factors including the appellant's admitted errors, apologies and long service. The Court found the award neither inordinately low nor unjust, and, exercising restraint on discretionary awards, declined to enhance it. The cross-appeal attacking liability likewise failed as the finding of unfairness was supported by the evidence.
Whether the trial court had jurisdiction over the dispute concerning the suit property charged to the respondent
The ELRC had jurisdiction because the mortgage privilege arose from and was intertwined with the employment relationship.
The mortgage was predicated on the employment relationship, and the charge document expressly provided that the staff interest rate would revert to commercial rates upon termination of employment. The transaction could not be extricated from the employer/employee relationship and so fell squarely within the trial court's jurisdiction; the claim itself, however, was not proved.
Whether the appellant proved discrimination and entitlement to exemplary damages
Discrimination was not proved; the claim for exemplary damages consequently failed.
The matters complained of, such as overseas trips and allocation of duties, were discretionary benefits and not accrued rights. Being given instructions through junior officers, though distasteful and unprocedural, did not amount to discrimination. As exemplary damages were tied to the discrimination claim, they were also not proved.
Legal principles established
#- On a first appeal the Court of Appeal has a duty to reappraise, re-evaluate and reconsider the evidence on record.
- Before terminating an employee for misconduct, poor performance or physical incapacity, an employer must explain the reasons to the employee in a language the employee understands, with a fellow employee or union representative present.
- An employment-related mortgage benefit is inextricably intertwined with the employment relationship, so disputes over it fall within the ELRC's jurisdiction even if couched as commercial.
Court orders
#- 1.The appeal is dismissed
- 2.The cross-appeal is dismissed
- 3.Each party to bear its own costs of the appeal and cross-appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Employment & Labour Relations Court at Nairobi
- ELRC Cause No. 2264 of 2014
- Jurisdiction invoked
- First appeal under the Court of Appeal Rules (Rule 29(1)(a)) from the Employment & Labour Relations Court
Relief refused
#Enhancement of the Ksh. 1,200,000 award for unfair termination
The trial Judge considered all the evidence and circumstances; the award was fair and justified
Relief relating to the suit property Ngong/Ngong/29503
Claim arising from the mortgage was within the trial court's jurisdiction but was not proved
Costs of the appeal
Costs, though raised in submissions, was not a ground of appeal
Costs
Appeal and cross-appeal dismissed with each party to bear its own costs of the appeal and cross appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
This being a first appeal, we have a duty to reappraise, re-evaluate and reconsider the evidence on record as commanded by Rule 29(1)a of the Rules of this Court and amplified in the locus classicus case of Selle vs Associated Motor Boat Co. [1968] EA.
We are not persuaded that the award was inordinately low as to call for our intervention. We have no reason to interfere with that award as we find it fair and justified in the circumstances of the case.
Therefore, by virtue of his termination from employment the interest rate would revert to commercial rate.
Accordingly, for the reasons given above, we find no merit in the appeal and cross-appeal and they are both hereby dismissed with each party to bear its own costs of the appeal and cross appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gisemba v Tausi Assurance Company", Case Analysis (2022). Civil Appeal 405 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/380/eng@2022-03-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.