Co-operative Bank of Kenya Limited v Banking Insurance & Finance Union (kenya)
The bottom line
#Kenya's Court of Appeal confirmed that following fair disciplinary procedure is not enough — employers must prove genuine, sufficient grounds for dismissal or pay heavy compensation.
What this practically means
#Executive summary
#Key legal issues
#Justifiability of summary dismissal
Even where fair procedure under Section 41 of the Employment Act is followed, dismissal is unjustified if the employer fails to demonstrate reasonable and sufficient grounds that the conduct constituted dismissible offences.
The court applied the four Postal Corporation elements of fair procedure and found the disciplinary process passed. However, re-evaluating the evidence, it agreed with the trial court that the grievant acted under the direction of the Operations Manager, who presented solutions in every instance and whose signature authenticated the irregular transactions. The employer therefore failed to discharge the Section 47(5) burden of justifying the grounds of dismissal.
Undue influence raised suo motu
A trial judge may determine an issue not specifically pleaded where it is an issue of law that featured in counsel's submissions or arises from the facts.
The appellant argued, relying on authorities, that undue influence had to be specifically pleaded and proved and could not be introduced by the judge. The court accepted the respondent's position that the issue was raised in the statement of claim and submissions, and found the grievant was manifestly disadvantaged by her Operations Manager, adopting the KRA v Waithaka approach that an issue of law featured in submissions attracts the court's decision.
Quantum of compensation under Section 49 of the Employment Act
An award of maximum compensation of 12 months' gross salary is a proper exercise of judicial discretion where the trial court assigns sound reasons, including the impracticability of reinstatement and the impact on the employee's career and reputation.
The court distinguished pre-2007 Act authorities limiting damages to the notice period, holding they may no longer represent good law given Section 49's express provision for compensation up to 12 months' salary. Echoing the Supreme Court in Kenfreight and Kenya Broadcasting Corporation v Wakio, it held remedies are compensatory, not punitive, and found the trial court's reasons for the maximum award were sound.
Legal principles established
#- Under Section 47(5) of the Employment Act, the burden of justifying the grounds for termination or wrongful dismissal rests on the employer.
- Fair procedure alone does not justify dismissal; the employer must also show reasonable and sufficient grounds constituting dismissible offences.
- Remedies under Section 49 of the Employment Act are compensatory, not punitive, and a maximum award of 12 months' salary must be justified on sound judicial principles.
- In a first appeal, the Court of Appeal must re-evaluate the evidence and reach its own independent conclusion.
Court orders
#- 1.The appeal fails and is dismissed in its entirety
- 2.Costs awarded to the respondent
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- Employment & Labour Relations Court Cause No. 213 of 2015
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 29(1)(a) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Michael Njai v Amadeus East Africa[2025] KECA 2044 (KLR)28 Nov 2025
Cite this brief
#Cite this brief
Caselaw, "Co-operative Bank of Kenya Limited v Banking Insurance & Finance Union (kenya)", Case Analysis (2021). Court of Appeal Civil Appeal (from Employment & Labour Relations Court Cause No. 213 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/173/eng@2021-11-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.