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ELRCPartially AllowedCause Number 1592 of 2010· [2014] KEELRC 448 (KLR)

Lawrence Onyango Oduori v Kenya Commercial Bank Limited [2014] KEELRC 448 (KLR)

Industrial Court of Kenya
5 June 2014
JRJames RikaDMD.K. Njagi Marete
3,907 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Claimant, a Messenger/Motor Cycle Rider employed by Kenya Commercial Bank from 24th June 1996, was summarily dismissed by a letter dated 7th May 2008, received only in October 2008, on the ground that he had been arrested by police and not released on bail within the stipulated period under Clause 5(a)(vii) of the CBA and the employment statutes. The Claimant had been arrested on 6th April 2008 (a Sunday, not a working day) after visiting a detained colleague at Kileleshwa Police Station, charged with theft by servant, and detained for want of bail until released; the charge was withdrawn in December 2008. He sought a declaration that the dismissal was unfair, reinstatement, general damages, damages for the loss of his charged house, terminal benefits, costs and interest. The Court found the Respondent was not an innocent bystander in the arrest, holding that the CBA and Employment Act presuppose lawful arrest and cannot support dismissal founded on an employer-engineered arrest. It further held that summary dismissal does not discard the procedural guarantees of Sections 41 and 45 of the Employment Act 2007, and that the Claimant, available after release, was never heard. The applicable substantive law was the Employment Act 2007, the dismissal taking effect in October 2008 when the letter was delivered. The dismissal was declared unfair. Reinstatement was refused as impracticable after six years; uncapped damages were rejected in favour of the statutory 12 months' salary cap (Kshs. 405,300); the house-loss claim failed on the facts; terminal benefits claims were rejected as already paid; and one month's salary in lieu of notice (Kshs. 33,775) was awarded. No order was made on costs and interest. Total award: Kshs. 439,075 payable within 30 days.

Key legal issues

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01

Whether the reason for dismissal (arrest and detention beyond 10/14 days) was a valid reason

Holding

The reason was not valid because the arrest and detention were engineered or procured by the Respondent, falling outside the lawful-arrest presupposition of the CBA and Employment Act provisions.

Reasoning

The Court found the claimant's evidence that the Deputy OCS said KCB had instructed that any employee visiting Songo be arrested credible. The charge sheet showed a KCB complainant. The CBA and Employment Act presume lawful arrest; a malicious, engineered arrest cannot ground summary dismissal. Dismissal was therefore unfair on substantive grounds.

p. 5
02

Whether fair procedure under Sections 41 and 45 of the Employment Act was followed

Holding

Procedure was unfair; the Respondent never accorded the Claimant a hearing even after his release when he was available and was being asked to reapply for his job.

Reasoning

Section 44 merely defines gross misconduct justifying summary dismissal; it does not discard the Section 41 and 45 procedural guarantees. The Claimant left detention on 27th June 2008, was available for a hearing, and kept moving between Head Office and Branch, yet KCB only slammed him with a backdated dismissal letter without any hearing.

p. 5
03

Which substantive law applied - the repealed Employment Act Cap 226 or the Employment Act 2007

Holding

The Employment Act 2007 applied because the dismissal took effect in October 2008 when the Respondent unequivocally informed the Claimant there was no going back, despite the letter being backdated to 7th May 2008.

Reasoning

Although the dismissal letter was dated 7th May 2008, it was only given to the Claimant in October 2008 after a period of vacillation. The date of dismissal is when the employee receives the letter; the applicable substantive law is that in force at that time, being the Employment Act 2007 in force from 2nd June 2008.

p. 5
04

Whether the Court had jurisdiction over the claim for loss of the charged house

Holding

The Court held it had jurisdiction over the house-sale claim as part of the larger employment dispute, but rejected the claim on the facts.

Reasoning

The Court found the sale of the house fell within the larger employment dispute, so jurisdiction existed. However, there was insufficient material to show the Respondent compelled the Claimant's wife to sell; the Respondent had not sought to sell the house to recover the loan, and the disposal was a decision between man and wife.

p. 6

Legal principles established

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  • The CBA and Employment Act summary-dismissal provisions for employees arrested and detained presuppose that the arrest and detention are lawfully made; an employer cannot engineer a malicious arrest and prosecution and then dismiss an employee who fails to raise bail within the stipulated period.
  • Summary dismissal under Section 44 of the Employment Act does not dispense with the procedural guarantees of Sections 41 and 45; the right to be heard is never discarded, and dismissal is not dismissal on the spot without a hearing.
  • Reinstatement can only be ordered within a reasonable time of dismissal; long passage of time and workplace changes make reinstatement impracticable.
  • The 12 months' salary cap on compensation under the Employment Act is a ceiling, not a floor, and courts should exercise judicial restraint in exceeding it.

Court orders

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  1. 1.It is declared the Claimant's dismissal was unfair
  2. 2.The Respondent shall, within 30 days of the delivery of the Award, pay to the Claimant 12 months' salary in compensation for unfair dismissal at Kshs. 405,300 and 1 month salary in lieu of notice at Kshs. 33,775, totalling Kshs. 439,075
  3. 3.No order on the costs and interest

Authorities

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Legislation

  • Employment Act 2007Section 44(4)(f)
  • Employment Act 2007Section 41
  • Employment Act 2007Section 45
  • Employment Act 2007Section 44
  • Employment Act (repealed), Cap 226Section 17(f)
  • Industrial Court Act
  • Collective Bargaining Agreement (Respondent and Claimant's Trade Union)Clause 5(a)(vii)

Cases cited (1)

  • G.M.V v. Bank of Kenya Limited
    Industrial Court Cause No. 1227 of 2011 [2013] e-KLR
Jurisdiction invoked
Industrial Court jurisdiction over disputes between employees and employers (Trade Disputes Act regime; dispute reported to the Minister for Labour)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (23)

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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, "Lawrence Onyango Oduori v Kenya Commercial Bank Limited [2014] KEELRC 448 (KLR)", Case Analysis (2014). Cause Number 1592 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/448/eng@2014-06-05

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