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ELRCPartially AllowedCause No. 1259 of 2011· [2013] KEELRC 746 (KLR)

Dominic N. Mbithi v Dubai Bank Kenya Limited [2013] KEELRC 746 (KLR)

Industrial Court of Kenya
6 June 2013
DMD.K. Njagi Marete
2,092 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Dubai Bank Kenya was ordered to pay a former branch manager about Ksh.1.55 million after the Industrial Court found his retrenchment was actually an unfair termination.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank as a Branch Manager from 16th December 2005, challenged the termination of his employment on 8th June 2011 as wrongful, unlawful and unfair. He pleaded that he was transferred three times within a month and given an unrealistic deposit-mobilisation target of Kshs.30,000,000 per month to frustrate him into resigning, and that his services were then terminated on false grounds of retrenchment without notice or payment of dues. He sought six months' salary in lieu of notice, twelve months' salary under section 49(1)(c) of the Employment Act, punitive and exemplary damages, and a certificate of service, together with interim orders restraining disposal of the respondent's assets and requiring a security deposit of Kshs.3,000,000, which the court granted at the interlocutory stage. The respondent admitted the employment history, transfers and target but justified the termination as a retrenchment of the marketing department to cut operational costs, citing the claimant's poor performance and nearing retirement age. Framing three issues, the court applied section 45 of the Employment Act and held that the reasons for termination were unfair and invalid and the employer's action unjust, unlawful and inequitable. Awarding relief, the court ordered one month's pay in lieu of notice (Ksh.150,000), eight months' compensation for unlawful termination (Ksh.1,200,000), punitive and exemplary damages of Ksh.200,000, with costs borne by the respondent. The full twelve months' compensation claimed was not awarded, and no certificate of service was ordered.

Key legal issues

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01

Whether the retrenchment and termination of the claimant was wrongful, unlawful and unfair

Holding

The termination was wrongful and unfair; the reasons for termination were unfair and invalid.

Reasoning

The court applied section 45 of the Employment Act, 2007, which requires an employer to prove a valid reason, a fair reason related to conduct, capacity or operational requirements, and fair procedure. The claimant pleaded that he was never issued a notice of retrenchment nor paid his dues as required by law, and that the abnormal transfers and unrealistic targets were actuated by malice. On the material before it, the court found the employer's action unjust, unlawful and inequitable and condemned it.

p. 5
02

Whether the claimant is entitled to the relief sought

Holding

Having established unfair termination, the claimant was awarded notice pay, eight months' compensation and punitive/exemplary damages.

Reasoning

The court held that establishing a case of unfair termination under section 45 entitled the claimant to relief. It exercised its discretion under section 49 of the Employment Act to award one month's pay in lieu of notice, eight months' salary as compensation for unlawful termination (rather than the twelve months claimed) and Ksh.200,000 in punitive and exemplary damages, with costs to the respondent.

p. 5

Legal principles established

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  • A termination of employment is unfair where the employer fails to prove a valid and fair reason and a fair procedure under section 45 of the Employment Act.
  • Misconduct by employers towards their employees in terminating employment unjustly should be condemned.

Court orders

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  1. 1.One month's pay in lieu of notice of Ksh.150,000.00
  2. 2.Eight (8) months compensation for unlawful termination of employment of Ksh.1,200,000.00
  3. 3.Punitive and exemplary damages for unlawful termination of Ksh.200,000.00
  4. 4.The costs of the suit to be borne by the respondent

Authorities

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Legislation

  • Employment Actsection 45
  • Employment Actsection 49(1)(c)
  • Employment Actsection 46
  • Employment Actsection 41
  • Employment Actsection 51
Jurisdiction invoked
Employment Act, 2007 (including sections 45 and 49) as invoked before the Industrial Court of Kenya

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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

Cite this brief

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Cite this brief

Caselaw, "Dominic N. Mbithi v Dubai Bank Kenya Limited [2013] KEELRC 746 (KLR)", Case Analysis (2013). Cause No. 1259 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2013/746/eng@2013-06-06

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