Court of Appeal Denies East Africa Portland Cement Relief, Upholds Attachment of Bank Accounts Over Sh1.3 Billion Debt
East Africa Portland Cement Company (EAPCC) has faced a setback as the Court of Appeal declined to lift an order obtained by former workers, which attached its bank accounts over a debt of Sh1.3 billion. The court noted that the cement company had previously obtained orders on terms that it failed to fulfill. Additionally, the judges stated that EAPCC voluntarily entered into a consent order with around 700 former employees but did not honor the agreement. The court expressed dissatisfaction with the company’s conduct and stated that it disentitles EAPCC to an equitable remedy.
EAPCC sought relief from the Court of Appeal to lift an order attaching its bank accounts over a debt of Sh1.3 billion owed to former workers.
The Court of Appeal declined to grant relief, citing the company’s failure to fulfill previously obtained orders and failure to honor a consent order with former employees.
The cement company had voluntarily entered into a consent order with approximately 700 former workers but did not fulfill the agreement.
Former workers were awarded Sh1.4 billion in August 2015 for remuneration discrepancies between them and their permanent counterparts, despite signing a Collective Bargaining Agreement in 2012.
The court directed EAPCC to pay all unionizable contract employees in line with the CBA.
EAPCC obtained a conditional order in September 2018, suspending execution but did not comply with the court’s conditions. In January 2020, the company entered into a consent for settlement but failed to fulfill it.
The company paid Sh90 million as promised but did not fulfill the agreement’s remaining part, leading to the former employees seeking an order freezing the company’s bank accounts.
EAPCC argued in the Court of Appeal that the pending appeal might be rendered nugatory, as the former employees have no known assets or means to repay the amount in case the appeal succeeds after payment.
Analysis: The Court of Appeal’s decision to uphold the attachment of East Africa Portland Cement Company’s bank accounts reflects the legal consequences of the company’s failure to fulfill court orders and honor a consent agreement with former employees. This situation underscores the importance of complying with legal obligations and agreements to avoid adverse consequences, including the freezing of assets. EAPCC’s legal challenges highlight the complexities involved in labor-related disputes and the potential financial implications for companies that do not meet their legal obligations.
Conclusion: The Court of Appeal’s decision serves as a reminder of the legal consequences of non-compliance with court orders and agreements. It emphasizes the importance of companies fulfilling their legal obligations to prevent legal actions that could impact their financial standing. The outcome of this case underscores the significance of effective dispute resolution mechanisms and adherence to legal processes in employment-related matters.