Nyaga & 78 others v Barclays Bank of Kenya Limited (Cause 1122 of 2018) [2024] KEELRC 2766 (KLR)
The bottom line
#Kenya's Employment Court ruled Access Bank's voluntary exit scheme was fair and lawful, dismissing 79 former employees' claims and ordering them to pay costs.
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 VES carried out by the Respondent in 2017 and 2018 was unfair, unlawful and unconstitutional
- 2.Whether VES should be recalled and renegotiated
- 3.Whether the Claimants merit the prayers sought
- 4.Whether the Respondent has established its Counterclaim
Key legal issues
#Whether the VES 2017/2018 was unfair, unlawful or unconstitutional
The VES was fair, lawful and consensual; Claimants volunteered, applied, accepted and were paid, with JWC consultation involving BIFU
The Court traced the JWC consultations, the circulars, the 2-week application windows, acceptance forms and payments. Claimants' claims of duress and hostile environment were unsupported; many applied for personal reasons stated in their own applications, and none lodged queries with the Head of Human Resource. Section 40 redundancy requirements did not apply as no roles were declared redundant.
Whether Section 40 of the Employment Act and the CBA applied to VES
Neither applied; VES was not redundancy and the CBA did not govern the voluntary exit
The Court held there were no declared redundancies, no LIFO requirement, no obligation to notify the Labour Office or consult BIFU on a voluntary termination exercise, and the Respondent had even exceeded legal obligations by engaging the JWC. Automation and mobile banking did not create a redundancy situation.
Whether VES should be recalled and renegotiated
No; no foundation, as Claimants did not offer to refund what they received
Recall would reset parties to 19th June 2017 on a tabula rasa and require Claimants to repay their packages. The Court found the demand untenable and the Claimants cannot have their cake and eat it.
Whether the Respondent's Counterclaim for commercial interest was established
Counterclaim declined; the interim orders of 18th July 2018 stood unappealed and the loans were not particularized
The Court's orders of 18th July 2018 directing repayment at staff preferential rates were executed and accepted by both parties, and no appeal was lodged. The Counterclaim also failed to specify figures, accumulated interest, or which Claimants still held loans seven years after exit.
Status of the unnamed Claimant No. 68 (XX)
The Claim by XX was struck off for failure to disclose personal particulars as required by the E&LRC Procedure Rules
Rule 7(1)(a) of the 2024 Rules (formerly Rule 4 of the 2016 Rules) demands names and addresses. The Claimant was identified only as 'XX' even after multiple amendments, an 'unusual Claimant' whose claim was unsustainable.
Legal principles established
#- VERS/VES agreements are separate contracts for the termination of employment, not contracts of employment, and supersede pre-existing contractual terms unless benefits are expressly incorporated
- Section 40 of the Employment Act (redundancy) does not apply to voluntary exit schemes; a business may restructure without declaring redundancies
- A VES exit agreement is valid and binding if it meets minimum terms under Section 27 of the Employment Act
- Parties are bound by their contract unless coercion, fraud or undue influence are pleaded and proved; a party cannot escape a bad bargain
- An offeror is not required to compute benefits payable under a VES offer before acceptance, since the agreement becomes effective only upon acceptance
Court orders
#- 1.The Claim by Claimant No. 68 (XX) is struck off
- 2.The Claim is declined with costs to the Respondent
- 3.The Counterclaim is declined with no order on the costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Jurisdiction under the Employment Act and the Employment and Labour Relations Court Act (statutory employment dispute jurisdiction); not expressly anchored to a cited article in the judgment
Relief refused
#Declarations that the VES was unlawful and unconstitutional, re-computation of benefits, injunctions on loan rates, recall and renegotiation of VES, access-to-information orders, compensation and damages
VES 2017/2018 was fair, lawful and consensual; Claimants failed to establish coercion, constitutional violations or entitlement to the prayers
Recall and renegotiation of VES 2017 and 2018
No foundation; Claimants did not offer to refund VES packages; recall would require resetting on a tabula rasa
Respondent's Counterclaim for commercial interest at 14.5% p.a.
Interim orders of 18th July 2018 (preferential staff rate) were not appealed and were executed; the loans were not particularized
Costs
The Claimants shall pay costs of the Claim to the Respondent; the Counterclaim was declined with 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 satisfied that VES in 2017/ 2018, was fair and lawful. The Respondent acted in accordance with the VES agreement, and the Claimants have not established any constitutional violations.
VERS /VES agreements are contracts for termination of employment, not contracts of employment. They are separate from the contract of employment.
VES is a corporate management tool, and can be an alternative to redundancy, but should never be mistaken, to be the same concept as redundancy.
The Claim is declined with costs to the Respondent.
The Counterclaim is declined with no order on the costs.
Difierent voluntary exit contracts, ofier difierent benefits, and there is nothing like industry-wide VES standards, or precedent.
The Claim by XX is not sustainable, and is struck ofi from the outset.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyaga & 78 others v Barclays Bank of Kenya Limited (Cause 1122 of 2018) [2024] KEELRC 2766 (KLR)", Case Analysis (2024). Cause (Employment and Labour Relations Court) – 79-Claimant Voluntary Exit Scheme Claim; details not stated in judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2766/eng@2024-11-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.