Banking, Insurance and Finance Union [Kenya] v Access Bank PLC [Kenya] Limited (Cause E679 of 2021) [2024] KEELRC 2124 (KLR)
The bottom line
#A Kenyan court ruled that employees who sign a voluntary early retirement deal are bound by its terms, even if the company handbook promises more.
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 Grievants were paid the correct terminal benefits under VERS, and whether they merit the prayers sought
Key legal issues
#Whether the Human Resource Policy, 2014 (clauses 24 and 25) was contractually enforceable against the Respondent
The Policy was not incorporated into the Grievants' contracts, was not signed by them, and contained a unilateral right of amendment; it was a guidebook, not a contract.
The Grievants' 1988-1990 contracts did not incorporate the Policy; neither the contracts nor the CBA alluded to it. Section 9(3) of the Employment Act requires employees to sign written contracts. The Policy itself stated letters of employment prevail over it and was amendable every 3 years without employee consent, showing it was never intended to be contractual. The Court found the Policy not part of the contracts, the CBA, or a standing VERS.
The legal character and effect of the VERS agreement
VERS is a voluntary standalone contract, not redundancy under Section 40 of the Employment Act, and supersedes pre-existing employment instruments even if less favourable.
All redundancy is involuntary; 'voluntary redundancy' does not exist under Section 40. The Grievants applied for and accepted VERS by signed letters which formed separate binding contracts with all elements of valid contracts. Being a separate agreement, VERS supersedes other contractual terms, and its terms need not match the CBA or HR Policy. The rate paid (1 month per year of service) exceeded the statutory minimum of 15 days per year.
Whether the Grievants proved coercion, fraud or undue influence in accepting VERS
No; the allegation of pressure was not pleaded or proved, and acceptance was voluntary and binding.
The Grievants testified half-heartedly that they were pressured by Kiptugen owing to the Bank's financial position, but the Union neither pleaded nor proved coercion, fraud or undue influence. They made deliberate written applications to exit, had served three decades, and were paid benefits above the statutory minimum. The Conciliator's contrary recommendation was based on a misapprehension of the legal architecture of the HR Policy and VERS.
Legal principles established
#- A Human Resource Policy is not automatically contractual; it becomes contractual only if it unambiguously indicates contractual intent, is received and acknowledged, and ideally signed by the Employee.
- VERS is not governed by the Employment Act; it is a voluntary standalone contract culminating in consensual termination which supersedes other employment instruments.
- Parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.
Court orders
#- 1.The Claim is declined.
- 2.No order on the costs.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the employment dispute (Employment and Labour Relations Court Act; dispute reported to the Cabinet Secretary for Labour and conciliation failed)
Relief refused
#Underpayments of notice and severance totalling Kshs. 15,670,554, costs and interest
The Human Resource Policy was not contractually binding; the VERS letters constituted standalone binding contracts whose terms the Grievants voluntarily accepted.
Costs
No order on the costs.
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.
The Court is persuaded that the Respondent's Human Resource Policy was not incorporated in the Grievants' individual contracts of employment. It was not part of the CBA. It was not a standing Voluntary Early Retirement Scheme.
VERS is not governed by the Employment Act. It is a voluntary contract. It culminates in consensual termination.
Being a separate agreement, VERS supersedes all other contractual terms.
It is ordered: a. The Claim is declined. b. No order on the costs.
Issues in the judgment
#The judgment names the fourth Grievant as 'Jeremiah Ongubo' in the pleadings but as 'Jeremiah Nyakundi' in the findings on payment.
The Respondent's witness conceded there was 'no specific formula in the HR Policy' while also describing a redundancy formula within it, and the judgment records both that the Respondent 'applied at all times, the HR Policy' and that the Grievants' separation 'did not fall within these categories.'
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking, Insurance and Finance Union [Kenya] v Access Bank PLC [Kenya] Limited (Cause E679 of 2021) [2024] KEELRC 2124 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2124/eng@2024-08-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.