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ELRCPartially AllowedCause No. 449 of 2013· [2014] KEELRC 1172 (KLR)

Onesmus Omwenga Maroko v Co-operative Bank of Kenya Ltd [2014] KEELRC 1172 (KLR)

Industrial Court of Kenya at Nairobi
30 June 2014
2,374 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan bank's dismissal of an employee over fraud was ruled unfair because the employer skipped the required hearing process under the Employment Act.

What this practically means

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Executive summary

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The claimant, a Graduate Clerk at the respondent bank who rose to Section Head in the Mobile Banking department, was summarily dismissed following a fraud in which approximately Ksh.11 Million was stolen from the bank's M-Pesa system in February 2011; the claimant claimed to have discovered a loss of Ksh.48 Million and recovered Ksh.37 Million on his own efforts. He was suspended on 24th February 2011, charged with stealing by servant at Makadara Law Courts, and discharged under Section 87(a) of the Criminal Procedure Code for want of witnesses. He claimed unlawful and unfair termination for want of due process under Section 41 of the Employment Act, 2007 and the CBA, plus terminal dues, notice pay, compensatory damages, gratuity, unutilized leave, half-salary arrears and release of a Ksh.300,000 insurance cheque. The respondent justified the summary dismissal on grounds of the claimant's approval of a fraudulent transaction and denied withholding insurance dues. The court framed three issues: fairness of the termination, entitlement to relief, and costs. Applying Sections 41, 44 and 45 of the Employment Act, 2007, it held the termination wrongful, unfair and unlawful because the respondent offered no evidence of an investigation or report and failed to rebut the claimant's case of termination without due process. The claimant was held entitled to relief, but quantum could not be assessed for lack of evidence of his emoluments, so the issue of quantum was left open for the parties. Costs were awarded to the claimant against the respondent.

Key legal issues

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01

Whether the summary dismissal of the claimant was wrongful, unfair and unlawful

Holding

The termination was wrongful, unfair and unlawful because the respondent did not follow the due process required by Sections 41, 44 and 45 of the Employment Act, 2007, and did not rebut the claimant's evidence of lack of due process or produce the investigation report

Reasoning

The court set out Sections 45, 41 and 44 of the Employment Act, 2007, which require a valid and fair reason plus fair procedure of notification and hearing before dismissal. It found the claimant's case of termination without due process elaborate and uncontroverted; the respondent neither filed submissions nor offered evidence of the investigation or report supporting a justifiable termination. Criminal discharge under Section 87(a) of the Criminal Procedure Code notwithstanding, the employer's failure to observe statutory procedure rendered the dismissal unfair.

p. 5
02

Whether the claimant is entitled to the relief sought

Holding

The claimant is entitled to relief having proved unlawful termination, but quantum could not be assessed for want of evidence of his emoluments; the issue of quantum was left open for the parties

Reasoning

Having proved a case of unlawful termination, the claimant is entitled to relief. However, relief in law is assessed on salary as at the date of termination. The claimant produced no evidence of his emoluments; the attached pay slips were for October 2008 and totally illegible, and the cited monthly salary of Kshs.87,877 was unsupported. The court therefore left quantum open for the parties to address.

p. 5
03

Who bears the costs of the claim

Holding

The claimant, having succeeded, is entitled to costs, which were ordered against the respondent

Reasoning

The court found the claimant had prevailed on liability and accordingly exercised its discretion to award costs of the claim to the claimant, to be borne by 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 that a fair procedure, including notification and hearing under Section 41 of the Employment Act, was followed

Court orders

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  1. 1.A declaration that the termination of the claimant's employment was wrongful, unfair and unlawful
  2. 2.The issue of quantum of relief is left open for the parties to deal with as they deem appropriate
  3. 3.The respondent to bear the costs of the claim

Authorities

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Legislation

  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 44
  • Employment Act, 2007Section 42(1)
  • Employment Act, 2007Section 46
  • Employment Act, 2007Section 51
  • Criminal Procedure CodeSection 87(a)
Jurisdiction invoked
Jurisdiction of the Industrial Court over employment and labour relations disputes (Industrial Court Act; Employment Act, 2007)

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, "Onesmus Omwenga Maroko v Co-operative Bank of Kenya Ltd [2014] KEELRC 1172 (KLR)", Case Analysis (2014). Cause No. 449 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1172/eng@2014-06-30

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