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ELRCPartially AllowedCause Number 346 of 2014· [2015] KEELRC 114 (KLR)

Naqvi Syed Qmar v Paramount Bank Limited & another [2015] KEELRC 114 (KLR)

Industrial Court of Kenya (now Employment and Labour Relations Court)
9 December 2015
JRJames Rika
6,829 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan bank manager wrongly fired over theft charges won Kshs. 6.8 million after the court found his dismissal unfair, defamatory and maliciously prosecuted.

What this practically means

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Executive summary

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The Claimant, Chief Manager of the 1st Respondent Bank's Mombasa Branch, was arrested and charged with stealing Kshs. 9,000,127 from the strong-room after Kshs. 9 million went missing while he was on a field visit to Malindi. He was suspended on 3rd November 2012 and summarily dismissed on 12th November 2012 without a disciplinary hearing. Charges were withdrawn on the DPP's advice on 30th July 2013. He claimed unpaid salary to March 2016, and general damages for unfair termination, malicious prosecution, defamation and injurious falsehoods. The 1st Respondent argued it lost trust and confidence and that the Court lacked jurisdiction over the tort claims; the Attorney General denied malice. The Court held it had jurisdiction under Article 162(2)(a) and Section 12 of the ELRC Act over all employment-related disputes, including defamation and malicious prosecution. It found the dismissal unfair: the Claimant had left his key with the Chief Cashier as a routine practice known to the Employer, had tipped the Head Office about the missing cash, and there was no record of a disciplinary hearing. The Auditor's concession that somebody had to be charged for the insurance claim to succeed demonstrated malice, and police investigations were shoddy with no material linking the Claimant to the offence. The Court awarded the Claimant 6 months' salary (Kshs. 1,800,000) for unfair termination and Kshs. 2,500,000 for defamation against the 1st Respondent, and Kshs. 2,500,000 for malicious prosecution jointly and severally against both Respondents, totalling Kshs. 6,800,000 with 14% p.a. interest if unpaid within 30 days. The claim for anticipated salary to March 2016 was refused as unjust enrichment, and each party was to bear its own costs.

Key legal issues

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01

Whether the summary dismissal was substantively and procedurally fair

Holding

The dismissal was unfair both substantively and procedurally; there was no valid and fair reason and no disciplinary hearing

Reasoning

Although Kshs. 9 million was stolen from the strong-room, the Claimant left his key with the Chief Cashier Ayaz as a routine practice known to the Employer, and it was the Claimant who tipped the Head Office about the missing cash. The Bank conducted no independent investigation and never questioned or pursued Ayaz. The only stated reason for dismissal was the criminal charge, yet investigation was not finalized, and no disciplinary hearing was held, breaching Sections 41, 43 and 45 of the Employment Act.

p. 8
02

Whether the Court has jurisdiction over claims of defamation and malicious prosecution arising from employment

Holding

The Court has jurisdiction; Section 12 of the ELRC Act is inclusive, not exclusive

Reasoning

Article 162(2)(a) of the Constitution confers jurisdiction over all disputes relating to employment and labour relations, not merely contractual disputes between employers and employees. The Court had previously assumed jurisdiction over employment-related defamation and malicious prosecution claims, and personal jurisdiction extends beyond employers and employees to all persons implicated in such disputes.

p. 8
03

Whether the Claimant proved defamation by the 1st Respondent

Holding

Defamation established; general damages of Kshs. 2,500,000 awarded against the Employer

Reasoning

The report that the Claimant had been charged with theft was circulated in print and television media, stigmatizing him as a bank thief. The manner of dismissal and negative publicity damaged his employability in the banking industry. The 1st Respondent did nothing to make amends even after the charges were dropped, and instead maintained the Claimant remained a suspect.

p. 9
04

Whether the Claimant was maliciously prosecuted

Holding

Malicious prosecution established against both Respondents, jointly and severally liable for Kshs. 2,500,000

Reasoning

All four elements were met: the Claimant was prosecuted following the 1st Respondent's report; the DPP withdrew the charges, terminating the prosecution in his favour; there was no reasonable and probable cause since the Police made no genuine enquiry - no statements of Ayaz, no CCTV review, no search - and the Auditor admitted somebody had to be charged for the insurance claim to succeed, showing improper motive; malice was thus demonstrated, with the police process manipulated to achieve a business end.

p. 10

Legal principles established

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  • The ELRC's jurisdiction under Article 162(2)(a) extends to all disputes relating to employment and labour relations, including employment-related defamation and malicious prosecution, and is not confined to contractual disputes between employers and employees
  • Employment-related defamation compensates the Employee's injured or damaged employability, not merely personal stigmatization
  • Determination of prosecution in favour of the Claimant includes a decision by the Prosecuting Authority not to prosecute, and it is irrelevant that a procedural law permits re-arrest
  • Malice in malicious prosecution is present where criminal charges are preferred for purposes other than carrying the law into effect

Court orders

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  1. 1.Declaration that termination of the Claimant's contract was unfair and unlawful
  2. 2.1st Respondent to pay 6 months' salary in compensation for unfair termination at Kshs. 1,800,000
  3. 3.1st Respondent to pay general damages for employment related defamation at Kshs. 2,500,000
  4. 4.The 2 Respondents to jointly and severally pay damages for malicious prosecution at Kshs. 2,500,000
  5. 5.Respondents to pay the Claimant Kshs. 6,800,000 in total within 30 days, with interest of 14% p.a. if not paid within the given period
  6. 6.Parties to meet their costs of the Claim

Authorities

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Legislation

  • Industrial Court (Procedure) Rules 2010Rule 27(1)(a)
  • Employment and Labour Relations Court ActSection 12
  • Employment Act 2007Sections 41, 43, 44(4), 45, 49(1)(b)
  • Constitution of KenyaArticle 162(2)(a)
  • Criminal Procedure CodeSection 87
  • Trade Dispute ActCap 234

Cases cited (7)

  • Beatrice Achieng Osir v. Teleposta Pension Scheme
    Industrial Court at Nairobi Cause Number 665 of 2011
  • Machira v. Mwangi & Another
    [2001]
  • Hakika Transporters Services Limited v. Kenya Long Distance Truck Drivers and Allied Workers Union
    [2015] e-KLR
  • George Onyango Akuti v. G4S Security Services Limited
    [2013] e-KLR
  • Stanley Mungai Muchai v. National Oil Corporation
    [2012] e-KLR
  • Murunga v. the Attorney-General
    [1983] KLR 138
  • Gichanga v. BAT Kenya Limited
    [1989] KLR
Jurisdiction invoked
Article 162(2)(a) of the Constitution and Section 12 of the Employment and Labour Relations Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Naqvi Syed Qmar v Paramount Bank Limited & another [2015] KEELRC 114 (KLR)", Case Analysis (2015). Cause Number 346 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/114/eng@2015-12-09

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