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ELRCPartially AllowedCause No. 74 of 2000· [2002] KEELRC 42 (KLR)

KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v STANDARD CHARTERED BANK OF KENYA LTD [2002] KEELRC 42 (KLR)

Industrial Court of Kenya
29 October 2002
CCCharles P. ChemmuttutAKA.K. KerichAOA.B. Ongaro
1,587 words in judgment
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The bottom line

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Kenyan employers can discipline employees while criminal cases are ongoing, but must count all continuous service years when calculating pensions.

What this practically means

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Executive summary

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The Industrial Court of Kenya at Nairobi, per Charles P. Chemmuttut, J, with Members A.K. Kerich and A.B. Ongaro concurring, determined a trade dispute notified under Section 14 of the Trade Disputes Act, Cap. 234, concerning the alleged wrongful dismissal of Mrs. Jeniffer M. Buogha by Standard Chartered Bank of Kenya Ltd. The grievant, employed from 9th July 1976 and dismissed on 29th June 1998 for facilitating forgery and fraud in which the Bank lost Kshs.1,126,213, had been acquitted under Section 210 of the Criminal Procedure Code in a parallel criminal case. The Union contended that natural justice required the Bank to await the criminal court's decision before disciplining her. The Court held that no such rule of natural justice exists: an employer may prosecute an employee criminally and take departmental disciplinary action concurrently, though in grave or complex cases awaiting the criminal outcome is advisable. On the wrongful dismissal claim itself, the parties jointly proposed that the dismissal be converted into normal termination of service with payment of Kshs.1,243,646.50, which the Court adopted. The sole live controversy was the commencement date of the grievant's pensionable service. Relying on paragraph I(b) of Section I under Schedule II of the Bank's Pension Rules and two unchallenged precedents cited by the Union, the Court held her 22 years of continuous service from 9th July 1976 must count in full, rejecting the Bank's position that pension accrued only from 7th February 1980. The award directed payment of terminal dues and full pension computed over the entire employment period; no costs order was made.

Key legal issues

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01

Whether the employer was bound to await the criminal trial before disciplining the employee

Holding

Natural justice did not require the Bank to wait; concurrent criminal and departmental proceedings were permissible and the dismissal was not vitiated

Reasoning

The Court held that while employers often stay enquiries pending criminal proceedings, natural justice does not compel this. Criminal prosecution and departmental discipline may proceed concurrently. Only in grave or complex cases is awaiting the criminal outcome advisable, to avoid prejudicing the employee's defence. On the facts the Bank held a fair enquiry, so there was no breach of natural justice.

p. 2
02

The commencement date of the grievant's pensionable service

Holding

Pensionable service runs from 9th July 1976, her date of first employment, not from 7th February 1980 when she joined the Permanent Clerical Staff

Reasoning

Paragraph I(b) of Section I under Schedule II of the Pension Rules defines a female member's pensionable service as her period of full-time continuous service with the employer after age 19, capped at 480 months. The grievant served continuously for 22 years from 1976, so her entire employment period counts. The Union's authorities, unchallenged by the Bank, supported non-discriminatory computation over the full service.

p. 3

Legal principles established

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  • The principles of natural justice do not require an employer to await the decision of the criminal court before taking disciplinary action against an employee
  • In grave or complex cases it is advisable for an employer to await the criminal court's decision so the employee's defence is not prejudiced
  • Pension, whether contributory or non-contributory, is a payment of money for past service

Court orders

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  1. 1.The dismissal of the grievant be reduced to normal termination of service
  2. 2.The grievant be paid terminal dues of Kshs.1,243,646.50 (half salary for March 1996 to June 1998, owner occupier house allowance, one month salary in lieu of notice, and 10 months' pay for loss of employment)
  3. 3.The grievant be paid her full pension in terms of para.I(b) of Section I under Schedule II of the Bank's Pension Rules and Regulations computed with effect from 9th July 1976 to 29th June 1998, payable forthwith
Jurisdiction invoked
Trade Disputes Act, Cap. 234, Section 14(7) and (9)(e) and (f) - Notification of Dispute with statutory certificates from the Labour Commissioner and the Minister for Labour

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, "KENYA UNION OF COMMERCIAL, FOOD & ALLIED WORKERS v STANDARD CHARTERED BANK OF KENYA LTD [2002] KEELRC 42 (KLR)", Case Analysis (2002). Cause No. 74 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2002/42/eng@2002-10-29

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