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Court of AppealPartially AllowedCivil Appeal No. 117 of 2017

National Bank of Kenya v Anthony Njue John [2019] KECA 445 (KLR)

Court of Appeal
6 August 2019
5,335 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 upheld reinstatement for unfairly sacked banker but cancelled duplicate alternative awards, ruling main and alternative reliefs cannot both be granted.

What this practically means

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Executive summary

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This is a first appeal by National Bank of Kenya against the judgment of the Employment and Labour Relations Court at Nairobi (Monica Mbaru, J.) which found that the summary termination of the respondent, a Manager Sales who had served the Bank for 22 years, on grounds of unacceptable performance was both procedurally flawed and substantively unfair. The ELRC reinstated the respondent and, in the alternative, awarded him salary arrears for three years, twelve months' compensation, leave and notice payments. The Court of Appeal framed three issues: the correctness of the termination procedure, the validity of the reason for termination, and the legality of the remedies awarded. On the first two issues, the Court held that the Bank failed to comply with the mandatory requirements of sections 41, 43 and 45 of the Employment Act: no explanation was given to the respondent in the presence of a fellow employee, and although a 2014 re-evaluation following the 2013 performance improvement plan was scheduled, the Bank adduced no proof it was conducted. The Court rejected the submission that managerial decisions are immune from judicial scrutiny, holding that such scrutiny is precisely what the Act's redress provisions enable. Reinstatement as the main relief was affirmed, together with salary arrears to the date of reinstatement and full benefits. However, applying the rule in Alex Wainaina v Janson Mwangi Wanjihia, the Court held that a court that grants main relief cannot also grant alternative relief in blanket form; the alternative awards were vitiated and set aside. Each party was ordered to bear its own costs, with the costs orders below affirmed. The appeal therefore succeeded only in part.

Key legal issues

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01

Whether the termination procedure complied with the Employment Act

Holding

The Bank did not follow the mandatory procedure in sections 41, 43 and 45 of the Employment Act; no evidence showed the required explanation, hearing, or the 2014 re-evaluation. The finding that the termination was unprocedural is affirmed.

Reasoning

The Court adopted the restatement of sections 41, 43 and 45 in Janet Nyandiko v Kenya Commercial Bank as the correct procedure. DW1 outlined none of those steps as having been undertaken before termination. Since the Bank planned a 2014 re-evaluation of the 2013 PIP rating, it had to prove that re-evaluation occurred; DW1 had no documents proving it. The managerial-prerogative argument was rejected because Parliament provided redress for noncompliance with the Act's procedures.

p. 4
02

Whether the reason for termination (poor performance) was valid

Holding

The reason was not proved valid; absence of the 2014 re-evaluation meant termination was unfair, contrary to section 45 of the Act.

Reasoning

Citing Jane Samba Mukala v Ol Tukai Lodge, the Court held that an employer alleging poor performance bears a high level of proof: it must show an evaluation policy, measures taken to address poor performance, and an opportunity for the employee to respond. The fault lay with the Bank in failing to re-evaluate the respondent in 2014 as planned before terminating him for unacceptable performance.

p. 5
03

Whether reinstatement as main relief was justified

Holding

Reinstatement under section 49(3)(a) read with section 49(4) and section 12(3) of the ELRC Act was appropriate given the Bank's fault; the finding is affirmed, as are attendant salary arrears and benefits.

Reasoning

The Court was satisfied the circumstances warranted reinstatement because the fault lay with the Bank in failing to re-evaluate the respondent's performance in 2014 before termination. Attendant reliefs of salary arrears to reinstatement and full benefits were affirmed as payable and enforceable by execution.

p. 5
04

Whether the alternative reliefs awarded lay in law

Holding

No: main and alternative reliefs cannot both be granted. The alternative awards were granted in error, vitiated and set aside.

Reasoning

Following Alex Wainaina t/a John Commercial Agencies v Janson Mwangi Wanjihia as reiterated in Olive Mwihaki Mugenda v Okiya Omtata Okoiti, where relief is prayed for in the alternative the court must choose between main and alternative relief with reasons; both cannot be granted in blanket form. Having affirmed reinstatement as the main relief, the alternative awards could not stand.

p. 6

Legal principles established

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  • A court that grants the main relief cannot also grant the alternative relief; the two cannot be awarded in blanket form and the court must choose with reasons.
  • An employer's exercise of managerial supervisory power in terminating employment is amenable to judicial scrutiny for compliance with sections 41, 43 and 45 of the Employment Act.
  • Before terminating on grounds of poor performance, an employer must, in mandatory terms, explain the reasons to the employee in the presence of a fellow employee or representative and hear representations, and must prove a re-evaluation where one was scheduled.

Court orders

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  1. 1.The appeal against the main relief (reinstatement with attendant benefits) is dismissed and the Judge's findings on unfair termination and reinstatement are affirmed.
  2. 2.Salary arrears from the date of termination to the date of reinstatement together with full employee benefits are affirmed as payable and, where withheld, are amenable to execution in the normal manner.
  3. 3.The alternative reliefs (three years' salary, 12 months' compensation, leave and notice payments awarded in the alternative) are vitiated and set aside.
  4. 4.Each party shall bear their own costs in this appeal.
  5. 5.The orders on costs as awarded by the High Court stand affirmed.
On appeal from
Employment & Labour Relations Court of Kenya at Nairobi
Employment & Labour Relations Cause No. 1278 of 2014
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (appeal from the ELRC judgment and decree)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "National Bank of Kenya v Anthony Njue John [2019] KECA 445 (KLR)", Case Analysis (2019). Civil Appeal No. 117 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/445/eng@2019-08-06

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