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October 17, 2018

National Bank wins appeal against Sh1 billion retrenched workers' payout

A file photo of a National Bank building. /MONICAH MWANGI
A file photo of a National Bank building. /MONICAH MWANGI

The Court of Appeal has overturned a ruling which awarded Sh1 billion to 200 former National Bank of Kenya employees retrenched in 2014.

Judges of the Employment and Labour Relations Court said the respondents accepted the terms offered in the circular and acceptance letters issued by the bank.

Appellate judges Alnashir Visram, Wanjiru Karanja and Martha Koome added that the respondents could reject the terms and not take advantage of the Voluntary Early Retirement (VER) scheme.

The scheme was introduced in 2014 for employees aged 50 and above as part of a restructuring process geared towards achieving growth targets as spelt out in the bank's strategic plan 2013-2017.

"In our view, there was no evidence of undue influence or coercion which diminished the respondents' capacity to voluntarily accept the terms in question," the judgement reads in part.

"Moreover, it is clear that the parties vide the circular, applications and acceptance letters varied the terms of retirement as stipulated in the HR manual and CBA. We find that the appeal has merit and hereby allow it with costs to the appellant.

"We hereby set aside the judgment of the trial court dated February 22, 2017 and substitute the same with an order dismissing the respondents’ suit with cost to appellant."

The former employees moved to court in 2014 seeking damages for unfair retirement and discrimination under the VER scheme.

In February, Justice Monica Mabru of the Labour court ordered the lender to pay Sh1 billion to the employees stating that were discriminated against and unfairly treated when they were sent on voluntary retirement in 2014.

"To engage an employee on inferior or unfavorable 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.

However, through its lawyers Chacha Odera of Oraro and Co. Advocates, the bank appealed the ruling stating that the offer the claimants were made was not discriminatory.

The bank also faulted the ruling for not appreciating that the VER agreement was separate and distinct from the HR manual and CBA.

"They have failed to illustrate or establish factual and legal comparable terms against which the offer is discriminatory. The respondents were bound by the terms of the VER scheme and it was not open to the learned judge to rewrite the contract as she did," National Bank said in response to the trial court ruling.

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