Nicholas Otinyu Muruka v Equity Bank Limited [2013] KEELRC 604 (KLR)
The bottom line
#A Kenyan court ruled Equity Bank unfairly dismissed an employee over mere fraud suspicion, awarding him over Kshs.807,500 because he was never given a hearing.
What this practically means
#Executive summary
#Key legal issues
#Gross misconduct under section 44(3) and (4)(g) of the Employment Act
The respondent failed to demonstrate reasonable and sufficient grounds linking the claimant to the alleged fraud; criminal charges still pending did not justify summary dismissal
The claimant was suspended on 24 July 2010 to pave way for investigations, but the respondent did not demonstrate what investigative steps were taken. The criminal charges remain pending. Under section 44(4)(g), suspicion of a criminal offence justifies summary dismissal only on reasonable and sufficient grounds, which must be proved under sections 41 and 43. Mere suspicion cannot ground dismissal as it would enable harassment of employees.
Backdating of summary dismissal and denial of hearing
Backdating the dismissal to the suspension date without affording the claimant a hearing was an unfair labour practice; the effective date of termination was 24 August 2011
The respondent suspended the claimant to allow investigations, then issued a dismissal letter dated 24 August 2011 backdated to 15 July 2010 without any internal due process. The court held that even summary dismissal for gross misconduct requires notification and hearing under section 41, and proof of reasons under section 43. The backdating was oppressive and the claimant is entitled to salary for the intervening period of 13 complete months.
Remedies for unfair termination
The claimant was awarded 3 months' pay as compensation, one month's notice pay, 13 months' salary for the suspension-to-termination period, a certificate of service and costs
Having found unfair termination and an unfair labour practice, the court exercised its discretion to award damages of 3 months' pay (Kshs.142,500), notice pay (Kshs.47,500) and salary for the period from suspension to the actual termination date (13 months, Kshs.617,500), totalling Kshs.807,500 with interest, plus a certificate of service within 14 days and costs of the cause.
Legal principles established
#- An employer invoking section 44(4)(g) of the Employment Act must demonstrate reasonable and sufficient grounds linking the employee to criminal acts; mere suspicion is insufficient
- Even where an employer has just cause under section 44, it must still comply with sections 41 and 43 of the Employment Act; summary dismissal in disregard of notification and hearing amounts to unfair termination
- Backdating a summary dismissal to the date of suspension, without hearing the employee, is an unfair labour practice
Court orders
#- 1.A declaration that the termination of the employment of the Claimant by the Respondent was unfair
- 2.The Respondent to pay the Claimant compensation at Kshs.142,500.00
- 3.The Respondent to pay notice pay at Kshs.47,500.00
- 4.The Respondent to pay salaries due at Kshs.617,500.00, all amounting to Kshs.807,500.00 plus interest at court rates from the date of judgment till full payment
- 5.The Respondent to issue the Claimant with a Certificate of Service within 14 days
- 6.The Respondent to pay costs of the cause
- Jurisdiction invoked
- Employment and labour relations jurisdiction over a claim for unlawful termination (Employment Act, 2007)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Shikuku v Childcare Worldwide Kenya and East Africa (Employment and Labour Relations Cause E019 of 2020) [2023] KEELRC 3373 (KLR)[2023] KEELRC 3373 (KLR)19 Dec 2023
- Benjamin Nzamba Killei v Denis Mathew t/a Matbronze [2018] KEELRC 1220 (KLR)[2018] KEELRC 1220 (KLR)17 Aug 2018
- Samuel Moyaki v Catering & Tourism Development Levy Trustees [2015] KEELRC 1194 (KLR)[2015] KEELRC 1194 (KLR)29 Jan 2015
Cite this brief
#Cite this brief
Caselaw, "Nicholas Otinyu Muruka v Equity Bank Limited [2013] KEELRC 604 (KLR)", Case Analysis (2013). Cause Number 25 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/604/eng@2013-06-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.