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Court of AppealDismissedCivil Appeal No. 78 of 2014· [2016] KECA 158 (KLR)

Justus Wambua Kavyu v Kenya Commercial Bank Ltd [2016] KECA 158 (KLR)

Court of Appeal of Kenya
4 November 2016
ASAsike-MakhandiaWilliam OukoW. OukoKMK. M'inoti
3,122 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal dismissed a bank teller's appeal, confirming his dismissal was fair and that reinstatement is a rare remedy.

What this practically means

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Executive summary

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The appellant, a bank teller employed by Kenya Commercial Bank Ltd since 1985, was dismissed for gross misconduct following a disputed transaction of 15th June 2010 in which he paid a customer Kshs.6,000/- without identification, debited the customer's account with Kshs.35,000/-, held the sum overnight and reversed it the next day as an 'error correction'. The ELRC (Mbaru, J.) held the termination substantially fair but procedurally unfair for failure to give reasons, awarding one month's salary compensation and pay for the suspension period. The appellant appealed, contending the trial court's findings were contradictory, that reinstatement should have been ordered, and that compensation of one month's salary was inadequate. The Court of Appeal, as a first appeal on facts and law, reconsidered the evidence and held there was objective and compelling evidence that the appellant acted contrary to the bank's regulations, undermining honesty and trust fundamental to banking. The Court found no denial of the section 41 hearing right, noting three written show-cause rounds, the appellant's detailed responses, and an oral appeal hearing. Reinstatement was refused as an exceptional remedy, impracticable after five years and where trust was irretrievably destroyed. Absent a cross-appeal, the Court declined to disturb the one-month compensation award. The appeal was dismissed with each party bearing their own costs.

Key legal issues

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01

Substantive fairness of the termination

Holding

The termination was substantively fair as there was objective and compelling evidence of dishonest conduct breaching trust

Reasoning

The appellant paid Kshs.6,000 to a person whose identity he could not verify, held Kshs.35,000 overnight, and dishonestly recorded the reversal as an error correction rather than explaining the true reason. Such conduct undermined the honesty and trust essential to banking work, grounding fair termination for gross misconduct.

p. 4
02

Procedural fairness / right to hearing

Holding

The appellant was accorded a fair hearing through successive written notices to show cause, his responses, and an oral appeal hearing

Reasoning

The show-cause letters specified the transaction, dates and particulars; the appellant responded in writing on three occasions; and his internal appeal was conducted by oral hearing. The Court found no denial of the section 41 Employment Act right to be heard.

p. 4
03

Reinstatement as a remedy

Holding

Reinstatement was refused; it is an exceptional remedy impracticable after a long lapse of time and where trust is destroyed

Reasoning

Over five years had passed since dismissal. The appellant's conduct hacked at the root of honesty, trust and confidence, the mainstay of a banker's career. Loss of soundly and rationally based trust and confidence renders reinstatement impracticable.

p. 5
04

Adequacy of compensation

Holding

The one month's salary award could not be disturbed absent a cross-appeal, though the termination was in the Court's view fully justified

Reasoning

Having found the termination substantively and procedurally fair on the evidence, the argument that only one month's salary was awarded fell away; and since the respondent filed no cross-appeal against the award, the Court declined to interfere with it.

p. 5

Legal principles established

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  • An employee facing termination for misconduct is entitled to be told the reasons and to have representations heard and considered before termination
  • Reinstatement under section 49 of the Employment Act is an exceptional remedy, and courts are reluctant to impose an employee on a reluctant employer
  • On a first appeal the Court reconsiders the evidence and reaches its own conclusions but will not disturb findings of fact made on proper principles
  • A court should not lightly interfere with the sanction an employer imposes for misconduct if it was reasonable in the circumstances

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Each party shall bear their own costs

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 49
  • Employment and Labour Relations Actsection 17

Cases cited (8)

  • Selle & Another v. Associated Motor Boat Co. Ltd. & Others
    [1968] EA 123
  • Hema Hospital v. Dr. Wilson Nakongo Marwa
    CA No. 72 of 2014 (Kisumu)
  • Dalmas B. Ogoye v. KNTC Ltd
    CA No. 125 of 1996
  • Banking, Insurance & Finance Union of Kenya v. Kenya Commercial Bank Ltd
    Industrial Court Cause No. 295 of 2010
  • Standard Bank of South Africa Ltd v CCMA & Others
    [1998] 6 BLLR, 622
  • Superstar Herbs v Director, CCMA & Others
    Case No P123/98
  • Nampak Corrugated Wadeville v. Khoza
    [1998] ZALAC 24
  • Perkins v. Graceworldwide (Aus) (Pty) Ltd
    NI 2230 of 1996
On appeal from
Employment & Labour Relations Court at Nairobi
ELRCC No. 194 of 2012
Jurisdiction invoked
First appeal under section 17 of the Employment and Labour Relations Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Justus Wambua Kavyu v Kenya Commercial Bank Ltd [2016] KECA 158 (KLR)", Case Analysis (2016). Civil Appeal No. 78 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/158/eng@2016-11-04

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.