Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal 185 of 2017· [2022] KECA 540 (KLR)

Oyombe v Eco Bank Limited

Court of Appeal
13 May 2022
WKW. KaranjaJMJ. MohammedSKS. ole Kantai
3,783 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

#

A Kenyan bank lawfully fired a dishonest employee but still had to pay him because it skipped the mandatory hearing before dismissal.

What this practically means

#

Executive summary

#
The appellant, a head teller at Eco Bank Limited, was summarily dismissed on March 7, 2013 following an audit investigation into a loss of Kshs. 800,986, and was subsequently charged with stealing by servant and conspiracy to defraud, being acquitted on both counts in March 2015. The Employment and Labour Relations Court at Kericho (D.K.N. Marete, J.) dismissed his claim for unfair termination and wrongful dismissal, holding that the Bank's case overwhelmed his and that the dismissal was lawful. On appeal, the Court of Appeal (W. Karanja, J. Mohammed and S. ole Kantai, JJA) framed a single issue: whether the trial court was justified in finding the termination procedurally and substantively lawful. Exercising its first-appeal duty to re-evaluate the evidence, the Court found substantive fairness established: there was sufficient evidence of misconduct causing loss of funds to justify dismissal, and a criminal conviction is not a prerequisite since reasonable and sufficient grounds of suspicion suffice under Section 44. However, the Court found procedural unfairness: there was no evidence the appellant was asked to show cause, summoned before a disciplinary committee, or heard by the investigating team, as Section 41 of the Employment Act requires. Section 44 must be read with Section 41 regardless of the gravity of the alleged misconduct. The Court allowed the appeal in part, set aside the dismissal of the claim, awarded the appellant two months' salary under Section 49(c) as compensation for procedural unfairness, declined all other reliefs, and awarded him 50% costs of the suit and of the appeal.

Key legal issues

#
01

Whether the termination was substantively fair

Holding

Substantive fairness was established; there was sufficient evidence of misconduct causing loss of funds to justify dismissal.

Reasoning

The Court re-evaluated the record as a first appeal. An investigation into loss of Kshs. 800,986, cautionary letters for prior financial impropriety, and admissions of fault established good cause. The appellant was not a compliant employee and his actions caused the employer to lose money, justifying summary dismissal under Section 44.

02

Whether the termination was procedurally fair under Section 41 of the Employment Act

Holding

Procedural fairness was not observed; the employer failed to show cause or hear the employee before dismissal.

Reasoning

Section 41 sets the minimum threshold of fair procedure: explanation of grounds, reason for termination, entitlement to a representative, and hearing of representations. There was no evidence the appellant was asked to show cause or summoned before a disciplinary committee, nor that the audit team heard him before recommending charges. The trial Judge erred in failing to find non-compliance.

p. 7
03

Whether acquittal in a criminal case binds the employer in disciplinary action

Holding

The argument was not accepted as determinative; the appellant was dismissed before the criminal trial concluded, so its outcome did not impact the dismissal.

Reasoning

The appellant argued the employer was bound by his acquittal in Criminal Case No. 246 of 2013. The Court noted the dismissal preceded the conclusion of the criminal trial, so the acquittal could not have influenced the dismissal decision. The law required recourse to internal disciplinary mechanisms under the Employment Act instead.

p. 5

Legal principles established

#
  • Section 44 of the Employment Act must be read together with Section 41; an employer must comply with the Section 41 hearing procedure before summary dismissal regardless of the gravity of the alleged misconduct.
  • A criminal conviction is not a prerequisite to summary dismissal for gross misconduct; reasonable and sufficient grounds of suspicion suffice.
  • Four elements under Section 41 must be satisfied for a fair summary dismissal procedure: explanation of grounds in a language understood, the reason for termination, entitlement to a representative, and hearing of representations.
  • An employee dismissed for a justified reason may still be compensated for procedural unfairness.

Court orders

#
  1. 1.Appeal allowed
  2. 2.Orders of the learned Judge dismissing the appellant's claim set aside
  3. 3.Appellant's claim partially allowed; award of 2 months' salary under prayer (c) of the statement of claim
  4. 4.All other reliefs sought declined
  5. 5.Appellant awarded 50% costs of the suit before the ELRC and of this appeal

Authorities

#

Legislation

  • Employment ActSection 35
  • Employment ActSection 41
  • Employment ActSection 41(1)
  • Employment ActSection 41(2)
  • Employment ActSection 42(1)
  • Employment ActSection 44
  • Employment ActSection 44(3)
  • Employment ActSection 44(4)
  • Employment ActSection 45
  • Employment ActSection 49
  • Employment ActSection 49(c)
  • Employment ActSection 51
  • Criminal Procedure CodeSection 215
  • Court of Appeal RulesRule 29(1)(a)
  • Employment and Labour Relations RulesRule 21

Cases cited (7)

  • Kenya Union of Commercial Food and Allied Workers v Meru North Farmers Sacco Limited
    Cause No. 74 of 2013

    An employee must be taken through the mandatory process under Section 41 of the Employment Act whatever the reason for termination.

  • Mathew Kipchumba Koskei v Baringo Teachers Sacco
    [2013] eKLR

    Employer bound by outcome of external justice process it invoked; employee not punishable on similar allegations.

  • Joshua Muindi Maingi v National Police Service Commission & 2 others
    [2015] eKLR

    Support for the position that termination was unlawful following exoneration in criminal proceedings.

  • Republic v Justine Onyisi Mangera & Michael Otieno Oyombe
    Kisii Criminal Case No. 246 of 2013

    Criminal proceedings in which the appellant was acquitted under Section 215 of the Criminal Procedure Code.

  • Kenya Ports Authority v Kuston (Kenya) Limited
    [2009] 2EA 212

    Duty of a first appellate court to reconsider the evidence, evaluate it itself and draw its own conclusions.

  • Postal Corporation of Kenya vs Andrew K. Tanui
    [2019] eKLR

    Section 41 provides the minimum standards of a fair procedure before termination; four elements must be discernible.

  • Maasai Mara University v William Morogo Muto & 3 others
    Civil Appeal No. 33 of 2016

    Section 44 must be considered along with Section 41 and not in isolation.

On appeal from
Employment and Labour Relations Court at Kericho
ELRC Cause No. 137 of 2015
Jurisdiction invoked
First appellate jurisdiction over the Employment and Labour Relations Court; duty of re-evaluation under Rule 29(1)(a) of the Court of Appeal Rules

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (25)

#

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

Cite this brief

#

Cite this brief

Caselaw, "Oyombe v Eco Bank Limited", Case Analysis (2022). Civil Appeal 185 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/540/eng@2022-05-13

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