Court declines employer’s bid to reduce security deposit in work injury appeal

The Court of Appeal has dismissed an employer’s attempt to reduce the security required to halt enforcement of a compensation award arising from a workplace injury.

In a ruling, the appellate court rejected an application by Elite Tools Limited seeking a stay of execution of a decision that had adopted a statutory compensation award as a court judgment. 

The employer had also urged the court to interfere with conditions imposed by the trial court requiring it to deposit the full award amount as security pending appeal.

The dispute stems from injuries sustained by Gilbert Kiprotich Murei while in the course of his employment with Elite Tools Limited. 

Following an assessment under the Work Injury Benefits Act (WIBA), the Director of Occupational Safety and Health Services awarded Murei compensation of Sh813,340 on March 11, 2024. 

A formal notice of the award, accompanied by a demand for payment, was served on the employer.

"But it would appear the applicant (employer) did not honour the demand. The respondent (Murei) then moved the Employment and Labour Relations Court (ELRC) in October 2024," court records indicate.

"He applied to have the award adopted as a judgment of the court and for judgment to be entered in his favour against the applicant in terms of the award."

In a ruling delivered on May 29, 2025, Justice James Rika Radido allowed the application and entered judgment against the employer for Sh813,340 together with interest at court rates.

The company then moved to the Court of Appeal seeking a stay of execution pending the hearing of the intended appeal. 

In the same application, the company asked the court to set aside conditional stay orders issued by the trial court.

It also sought in the same application an order “to set aside orders of stay of execution issued by the trial court for the deposit of Sh813,340 as security” and for “review of the sum of Sh411,840 pending the hearing and determination of the intended appeal."

In support of the application, the employer relied on affidavits sworn by its accounts manager, asserting that the company was experiencing financial difficulties and was unable to raise the full sum of Sh813,340. 

The company argued that it had exhausted all avenues to mobilise the amount without success and that it would suffer substantial loss if execution was allowed to proceed.

Murei, however, opposed the application, maintaining that he had suffered grave injuries, including spinal injuries and multiple rib fractures, and that the compensation had been properly assessed by the Director of Occupational Safety and Health Services. 

He noted that the employer had neither challenged the assessment nor paid the award despite demand, terming the appeal an abuse of the court process.

In considering the application, the appellate court restated the settled principles governing applications for stay of execution under Rule 5 of the Court of Appeal Rules. 

An applicant must demonstrate, first, that the intended appeal is arguable and, second, that the appeal would be rendered nugatory (of no value) if the stay is not granted.

On the first limb, the court gave the employer the benefit of the doubt. 

It noted that the draft appeal raised issues including alleged violation of the right to be heard, failure by the trial court to consider partial payments said to have been made, and inadequate evaluation of the evidence. 

Citing precedent, the court reiterated that an arguable appeal need not ultimately succeed, only that it is not frivolous.

However, the application foundered on the second limb.

The judges were not persuaded that the employer had demonstrated that the appeal would be rendered nugatory if execution proceeded. 

While the company had emphasised its own financial difficulties, the court underscored that the critical consideration is the Murei's ability to refund the decretal sum should the appeal succeed.

“The applicant does not assert that the respondent would not be able to refund the judgment amount in the event that the appeal succeeds,” the court observed. 

It further noted that the employer appeared to have already obtained conditional stay orders before the Employment and Labour Relations Court, although the details of those orders were not properly placed before the appellate court.

In the absence of material showing that payment of the award would irreparably prejudice the appeal, the court declined to exercise its discretion in the employer’s favour. 

As a result, the bid to set aside the security conditions and to reduce the deposit to Sh411,840 was rejected.

The application was dismissed, with costs going to Murei.