Sh300m windfall turning into mirage for ex-Absa staff

Absa bank

Absa  bank on Muindi Mbingu Street in Nairobi.

Photo credit: File | Nation Media Group

What you need to know:

  • The rest of the 103 retirees, he said made similar claims, the difference only relating to the actual claim made.
  • Prof Muigai said the bank was entitled to cap benefits at 16 years – because, according to him, the package exceeded what the law required.

For some 105 former employees of Absa Kenya, theirs has been a long and treacherous journey.

They were given some hope two years ago, when a judge of the Employment and Labour Relations court, ruled in their favour. 

But when they thought the windfall of millions was coming their way, the lender appealed and last month, the hopes were dashed.

The former employees led by Agnes Wachu Wamae are still hopeful and they have taken their fight to the Supreme Court, hoping to overturn the Court of Appeal decision and get the millions they have been waiting for one decade.

The long journey for the retirees started on December 24, 2010 when the bank, then known as Barclays, announced plans to restructure, which would see some of the employees declared redundant.

In the move, the bank laid off some 200 employees. Those to be affected were told to wait for their line managers for more information. The former employees started receiving their letters in February 2011.

Receive less pay

But the 105 soon moved to court saying they were shortchanged- accusing the employer of capping benefits at 16 years, a move they said would see those who had worked for more years, receive less pay.

They said although their termination of employment was within the provisions of the Employment Act on redundancy, they accepted the offer believing the bank would compute their benefits properly in accordance with the Act.

Through lawyer Titus Koceyo, the employees said the bank had computed and paid to them incorrect amounts, which was a result of fraudulent misrepresentation, concealment of material facts that saw them paid reduced amounts. They also claimed that the bank delayed their exit package.

After hearing their case, Justice Nduma Nderi ruled that the bank violated Section 40 of Employment Act, which requires employers to grant sacked workers proper terminal dues.

The Judge further accused the lender of discrimination and awarded them a total of Sh301 million, which would attract interest.

“In its own discretion, the bank granted the claimants one and a half months’ salary for each completed year of service and also used its discretion to cap the number of completed years payable to each of the former bankers,” he said.

The bank appealed and last month, Justices Martha Koome, Asike Makhandia and Sankale ole Kantai overturned the decision faulting the Employment judge at how he arrived at the calculations.

Retirees

“The Judge granted the claims as pleaded but nowhere in the proceedings was evidence led to show the period served by each of the respondents. It was not explained why the respondents were entitled to that rate of interest,” the judges said.

They added that it was difficult for them to appreciate how Godfrey Wafula Wasike, the only witness called to testify on behalf of the retirees, would have proved each of their claims.

“We also observe that each claim comprised balance of exit package under Section 40 (1) (g) of the Act; untaken leave days and interest on both claims at 20 per cent per annum from 31st anuary, 2011 to 13th May, 2011.

Employment Act

“Also, the whole claim of Sh.301,855,477 included interest at 20 per cent. The Judge allowed the whole claim which included interest at 20 per cent but also awarded interest at court rates. This was wrong,” they said.

In the appeal, the bank maintained that it had complied with the Employment Act and did not breach any of their rights. The bank also added that each of them received more money than what was due to them as they were paid in excess of the fifteen days for every year worked as required by the said Act.

Through Prof Githu Muigai, the bank said the retirees did not lose but in fact, gained and it was surprising that they turned around to sue the bank even after receiving the generous package and after executing documents confirming receiving the exit package, with a lot of satisfaction.

Prof Muigai said the bank was entitled to cap benefits at 16 years – because, according to him, the package exceeded what the law required.

Declared redundancies

The retirees through Mr Koceyo said bank had declared redundancies and each of them was to a severance pay based on salary and length of service.

He said the employer was required to pay to an employee declared redundant 15 days salary for each year served and this, it was submitted, is a basic minimum in law. He defended the High Court decision saying the Judge did not award any general or special damages but ordered that each respondent be paid 45 days salary for each year worked.

He explained that Ms Wamae for example, had worked for 23 years was entitled to exit package of Sh6.1 million but was paid Sh4.1 million, whereas Mr Ahmed Mohamed Abush had worked for 25 years and was entitled to Sh6 million but was instead paid Sh3.8 million.

The rest of the 103 retirees, he said made similar claims, the difference only relating to the actual claim made.

The judges agreed with the bank that the former employees did not lose but they gained. “There was no discrimination at all in the way the bank undertook the restructure exercise and there was no breach of the Act at all,” the Appellate court said.

But the group is not satisfied and have moved to the country’s top court.

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