[2018] KECA 372 (KLR)

Judicial Service Commission v Ang’awa & 10 others (Civil Application 117 of 2017) [2018] KECA 372 (KLR) (31 July 2018) (Ruling)

Judicial Service Commission v James Ang’awa & 10 others [2018] eKLR

Neutral citation: [2018] KECA 372 (KLR)

Republic of Kenya

In the Court of Appeal at Nairobi

Civil Application 117 of 2017

PO Kiage, K M'Inoti & AK Murgor, JJA

July 31, 2018

Between

Judicial Service Commission

Applicant

and

James Ang’awa & 10 others

Respondent

(Being an application for stay of execution the judgment and decree of the Employment & Labour Relations Court at Nakuru (Radido, J.) delivered on 24th February 2017 in ELRC PETITION No. 32 of 2016)

Ruling

1. This Notice of Motion dated 17th October 2017 is made under sections 3A and 3B of the Appellate Jurisdictions Act and rule 5 (2) (b) of the Court of Appeal Rules, and has been brought pursuant to a decision of the Employment and Labour Relations Court (Radido, J,).

2. In the motion the applicant, the Judicial Service Commission sought for orders that;1. The…2. Pending hearing and determination of this application there be a stay of execution of the judgment and decree in Employment and Labour Relations Court Dispute No. 32 of 2016;3. Pending the hearing and determination of the intended appeal there be a stay of execution of the judgment and decree in the Employment and Labour Relations Court Dispute No. 32 of 2016;4. Pending the hearing and determination of the Applicant’s application there be a temporary injunction prohibiting the Respondents from executing and or effecting judgment and decree in the Employment and Labour Relations Dispute No. 32 of 20165. Pending the hearing and determination of the Applicant’s appeal there be a temporary injunction prohibiting the Respondents from executing the judgment and decree in the Employment and Labour Relations Court Dispute No 32 of 2016. 6.Costs of this application be provided for.

3. The application was made on the grounds that the applicant was aggrieved by the trial court’s judgment in favour of the 1st to 7th respondents that declared that the applicant had breached their right to fair labour practice and awarded them Kshs. 750,000 each for the alleged breach; that the applicant intends to file an appeal that raised several arguable issues; that the stay of execution pending hearing and determination of the appeal is merited.

4. It was further contended that Government agencies were not liable to deposit security in court, and that the respondents intended to execute against the applicant before the substantive appeal is heard and determined, which would render the appeal nugatory, as the sums, if paid out, will be difficult to recover.

5. The application was supported by the affidavit sworn on 17th October 2017 by Winfrida Mokaya, the applicant’s Registrar, where it was deposed that the trial court erred in awarding the 1st to 7th respondents the sum of Kshs. 750,000 each as damages for violation of their rights to fair labour practices and breach of contract; that following an application for stay of execution filed in the trial court on 30th March 2017, the court granted stay of execution on condition that the applicant deposits the decretal sum in court. It was further deposed that due to budgetary constraints, the applicant sought to have the court review its decision on the requirement to deposit the decretal sum; that instead, the court extended the period; that in the meantime other intervening events had led to a reduction in funding to the Judiciary, which had inhibited the applicant from depositing the sums in court. Furthermore, it was deponed, the judge failed to appreciate that Government agencies are not authorized to provide security for pending appeal.

6. It was also averred that in the event the appeal was to succeed, it would be rendered nugatory as the respondents would be unable to repay the sums paid; that the applicant was not in a position to know what resources the respondents had at their disposal; and that the refusal to grant the stay of execution would occasion the applicant undue suffering and hardship.

7. As a brief background to the application, the 1st, 2nd, 3rd, 4th 5th,6th and 7th respondents who this application is against were offered employment as Legal Researchers on 13th June 2012, while the 8th ,9th, 10th, and 11th petitioners were offered employment through letters dated 24th March 2014 for a period of 2 years with a Probationary period of 6 months.

8. At a meeting of 5th December 2013, the applicant decided to alter or vary the 1st to 7th respondents’ terms of contract by providing that each respondent would be employed for a fixed term of 3 years effective 9 July 2012. Though they were advised that the other terms and conditions of their contracts would remain the same, it also turned out that the responsibility and risk allowances they were enjoying were to be reduced and or withdrawn dependent on when the varied contract was to expire. On 28th May 2015, when the varied contracts were to lapse, the applicant wrote to the respondents informing them of an extension of their contracts for a further period of 6 months to enable them deliberate on long term contracts. The extension was subsequently extended to 31st March 2016, and then to 30th June 2016 for the same reason.

9. With respect to the 8th to 11th petitioners, on 20th April 2016, the applicant informed them that it had revised their terms and conditions of service. The revised terms included the re-designation of the role of Legal Researchers to that of Law Clerks. Upon receipt of their letter revising their terms which was to be effective on the 1st July 2016, the petitioners wrote to the Chief Registrar on 10th May 2016 objecting to the unilateral decision to vary their terms. And despite the reservations expressed, the applicant offered them the revised contracts, which they accepted.

10. The respondents and petitioners were aggrieved and instituted the proceedings against the applicant wherein, it was contended that their rights to fair labour practices, fair administrative action, equal treatment and legitimate expectations were violated.

11. The applicant denied any wrong doing, and contended that as an employer it had the powers to vary or alter the terms of employment of the respondents and the petitioners. It was further averred that the respondents accepted the altered terms of employment when they signed the new contracts of employment, and that by so doing, they waived, accepted, acquiesced to the new contractual terms and were estopped from asserting a repudiatory breach of the old contractual terms.

12. In its judgment, the trial court found that the applicant’s unilateral variation of the 1st to 7th respondents contracts from open ended to 3 year contracts was unlawful, and in violation of their right to fair labour practices. As a consequence, the court awarded each of them Kshs. 750,000 as damages. With respect to the claims by the 8th to 11th petitioners, the court found that it was not merited and accordingly dismissed it.

13. On the question of whether the intended appeal was arguable, learned counsel, Mr. Wakwaya for the applicant submitted that one of the grounds in the draft memorandum of appeal was that the respondents, having signed contracts that varied their terms, were deemed to have waived their rights to demand any rights accrued under their previous contracts; that despite this, the learned judge concluded that the applicant had carried out an unfair labour practice.

14. And whether in the event the stay of execution sought was declined and the appeal were to succeed, it would be rendered nugatory, counsel argued that there would be no way for the respondents to refund the sums paid. It was further argued that once the fear was expressed that the respondents would be unable to repay the sums, then it was upon the respondents to show that they were in a position to pay, which they had not done, as no replying affidavit was filed.

15. Mr. Ongoya, learned counsel for the respondents submitted in reply that by a Notice of motion lodged at the trial court on 30th March 2017, the applicant sought an order of stay of execution and implementation of the judgment of 24th February 2017. On 12th April 2017, the court allowed the stay of execution on condition that the decretal sum was deposited in court before 1st June 2017. Instead of complying with the court imposed condition, the applicant filed another motion dated 26th May 2017 seeking a review of the order of 12th April 2017, and an extension of time by 120 days from 1st June 2017 within which to deposit the decretal sum. The application was granted and time was extended to 20th June 2017, and on 10th October 2017 a further extension upto 30th October 2017 was granted to the applicant to make the deposit. Counsel stated that despite the extensions, there had been no compliance with the court’s order. And neither has there been any appeal against the condition upon which the stay of execution was premised. Counsel argued that this application was an abuse of the court process, as the applicant had already been granted all the indulgence by the lower court, and having failed to comply with the conditions, now seeks orders from this Court.

16. Mr. Wakwaya submitted in reply that the conditional orders of the trial court had lapsed, and that as a consequence, the applicant has the right to seek the protection of this court.

17. The principles which guide the court in considering applications under rule 5(2) (b) are now well settled and we need only restate them from Reliance Bank Ltd (In Liquidation) vs Norlake Investments Ltd – Civil Appl. No. Nai. 93/02 (ur), thus;"Hitherto, this Court has consistently maintained that for an application under rule 5(2) (b) to succeed, the applicant must satisfy the court on two matters, namely:-1. That the appeal or intended appeal is an arguable one, that is, that it is not a frivolous appeal;2. That if an order of stay or injunction, as the case may be, is not granted, the appeal, or the intended appeal, were it to succeed, would have been rendered nugatory by the refusal to grant the stay or the injunction.”

18. As to whether the appeal is arguable, we have seen a draft memorandum of appeal, wherein the applicant has questioned whether the learned judge rightly determined that the respondents had the right to take up new contracts of employment and at the same time sue for breach of the previous contracts, and in failing to find that the respondents had acquiesced to the variation of terms of the new contracts of employment.

19. Clearly, the applicant has raised pertinent questions that will require to be addressed by this Court, in particular, whether by signing the new contracts the respondents signed away any rights and benefits that had accrued to them under their previous contract, and in so doing, also acquiesced to the terms and conditions of the new employment contract. We do not consider that these are frivolous or whimsical questions for determination. And so as not to preempt or embarrass the bench that will ultimately determine the intended appeal, we will say no more regarding this first precondition.

20. Concerning the nugatory aspect, the applicant argues that in the event the sums are paid to the 1st to 7th respondents, they have not shown that they would be in a position to refund such sums. But this notwithstanding, it also admits having sought a stay of execution in the lower court, which stay was granted conditional upon its depositing the decretal sum in court, but, it has been unable to deposit the sums due to budgetary constraints.

21. To the respondents, this is an abuse of the court process because, despite the trial court having granted the applicant sufficient time within which to deposit the decretal sums, the applicant has failed and or refused to do so. And without complying, the applicant has instead chosen to abandon the conditional stay in the lower court, and now comes in search of another stay of execution in this Court.

22. When we consider the facts as placed before us, the applicant has not shown why it alleges that the respondents will be incapable of refunding the sums paid. We have not been told that after entering into their current contract of employment with the applicant that they have since left the applicant’s employment, and therefore would be unable to refund the sums, or that the applicant would have no way of recovering the amounts if paid. If anything, it is the applicant which has been unable to demonstrate its bonafides by continually failing to deposit the decretal sums as ordered by the trial court.

23. This being the current state of affairs, we are not satisfied that the intended appeal will be rendered nugatory in the event it were to succeed.

24. As such, the motion is without merit, and it is dismissed with costs to the respondents.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2018. P.O. KIAGE.....................................JUDGE OF APPEALK. M’INOTI...................................JUDGE OF APPEALA. K. MURGOR....................................JUDGE OF APPEALI certify that this is a true copy of the originalDeputy Registrar