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ELRCDismissedCause Number 216 of 2011· [2013] KEELRC 250 (KLR)

Banking, Insurance &Finance; Union v Harambee Co-operativeSavings And Credit Society [2013] KEELRC 250 (KLR)

Industrial Court at Nairobi
19 July 2013
4,732 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's Industrial Court upheld a Sacco's summary dismissal of an employee who leaked confidential documents, ruling the dismissal both justified and fair.

What this practically means

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Executive summary

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The Banking, Insurance & Finance Union, on behalf of its member and grievant Joseck Argwings Omuhinda Otanga, challenged his summary dismissal by Harambee Co-operative Savings and Credit Society on 1st July 2010, effective from 2nd February 2010, on the allegation that he extracted confidential information (a payment voucher relating to a Kshs.9.95 million share purchase from Gina Din) from the Respondent's computer system and circulated it to unauthorized persons, including a Sacco delegate, the media and politicians. The Union sought reinstatement without loss of benefits, lost salaries and allowances, further reliefs and costs, invoking Section 15 of the Labour Institutions Act 2007. The Respondent maintained the dismissal was substantively justified and procedurally fair, citing gross misconduct, breach of confidentiality, loss of over Kshs.100 million through panic withdrawals, and damage to its reputation. The Court found the Grievant's password was used to extract the document, that subsequent events established his complicity, and that the release of the documents damaged the employer's business, rendering them confidential. It held the Respondent had valid reason under Sections 43 and 45 of the Employment Act 2007, that the procedure complied with Section 41, and rejected the allegation of victimization of shop stewards. It also faulted the Grievant for delving into Sacco politics beyond his mandate as Chief Shop Steward. Reinstatement and compensation were both refused. The Claim was dismissed with no order on the costs.

Key legal issues

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01

Validity of the reason for summary dismissal under Sections 43 and 45 of the Employment Act 2007

Holding

The Respondent had valid reason: the Grievant extracted confidential information from the Respondent's computer system using his password and circulated it to unauthorized persons, causing reputational and financial harm

Reasoning

The Court found sufficient factual material establishing that the Grievant's password was used to extract the Gina Din payment voucher, which found its way to Ontieri, the media and parliamentary committees. The allegations it supported were discounted by investigatory agencies, members made panic withdrawals exceeding Kshs.109 million, and the Respondent suffered uncontroverted financial loss, establishing complicity and breach of the duty of fidelity.

p. 6
02

Procedural fairness under Section 41 of the Employment Act 2007

Holding

Procedure was in conformity with Section 41: the Grievant was asked to show cause, responded, was suspended to allow investigations, and was heard four months later accompanied by a union representative

Reasoning

The show-cause letter issued on 2nd February 2010, the Grievant responded promptly the same morning, and suspension followed to pave way for investigations including an audit trail. The disciplinary hearing of 30th June 2010 gave the Grievant four months to prepare his defence, and he was accompanied by a union representative. No specific CBA clause was shown to have been violated.

p. 7
03

Alleged victimization of trade union representatives

Holding

The allegation of victimization was adequately rebutted; other shop stewards left for reasons unconnected to union activities

Reasoning

The Respondent showed that the stewards named by the Grievant left through redundancy, desertion, criminal conviction or voluntary resignation. Vacancies were filled by new shop stewards. The evidence contained no visible element of victimization, and the Grievant's troubles arose from his involvement in power struggles against the Sacco's Central Management Committee rather than his union role.

p. 7
04

Remedy of reinstatement

Holding

Reinstatement was not available because the trust and confidence underpinning the employment relationship had been irretrievably destroyed

Reasoning

The Grievant expressly sought reinstatement only and not compensation. The Court found he had burnt the bridges of trust, confidence and fidelity with his employer, caused considerable financial loss, and waged a campaign against the CMC, making reconstruction of the employment relationship impossible. Given the dismissal was fully justified, even compensation did not arise for consideration.

p. 8

Legal principles established

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  • Whether documents are confidential at the workplace is determined by whether their release would damage the employer's business
  • The employment relationship is founded on mutual trust, confidence, good faith and fidelity, obliging the employee to keep the employer's documents confidential
  • Trade union representatives must focus on their core mandate of worker representation and not digress into management power struggles

Court orders

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  1. 1.The Claim is dismissed with no order on the costs

Authorities

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Legislation

  • Employment Act 2007Section 44(4)
  • Employment Act 2007Section 45
  • Employment Act 2007Section 43
  • Employment Act 2007Section 41
  • Labour Institutions Act 2007Section 15
  • Labour Relations Act 2007Section 69
  • Constitution of Kenya 2010Article 41
  • ILO Convention 135

Cases cited (1)

  • Leland Salano v. Intercontinental Hotel
    Industrial Court Cause Number 805 of 2012
Jurisdiction invoked
Section 15 of the Labour Institutions Act 2007; Industrial Court jurisdiction over unfair and unlawful termination disputes

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, "Banking, Insurance &Finance; Union v Harambee Co-operativeSavings And Credit Society [2013] KEELRC 250 (KLR)", Case Analysis (2013). Cause Number 216 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/250/eng@2013-07-19

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