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ELRCPartially AllowedCause No. 1374 of 2012· [2015] KEELRC 396 (KLR)

Jane A Ogoti v Kenya Commercial Bank Limited [2015] KEELRC 396 (KLR)

Employment and Labour Relations Court of Kenya
14 October 2015
HWHellen S. Wasilwa
1,884 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled KCB unfairly fired an employee without a hearing, awarding her over Kshs. 1.1 million in compensation and costs.

What this practically means

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Executive summary

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The claimant, employed by Kenya Commercial Bank since 1991 as a waitress and later a clerk, was suspended in 2010 over alleged irregularities in dealing with customer accounts and terminated on 23rd February 2011 for gross misconduct under Clause 5(d) of the applicable Collective Agreement. She claimed the termination was wrongful and unlawful, that she was denied a fair hearing contrary to natural justice and Section 41 of the Employment Act 2007, and sought reinstatement or alternatively compensation. The respondent called no witnesses and relied on documents including minutes of a disciplinary committee held on 16th February 2011. The court framed three issues: validity of the reasons for termination, compliance with due process, and entitlement to remedies. On the first issue, the court found that although the alleged reasons, if they existed, were valid under Section 43, the respondent failed to prove breach of the relevant circular or absence of approvals, the alleged unsigned vouchers not being produced. On the second issue, the disciplinary minutes showed the claimant was not present, so she was not given the hearing contemplated by Section 41. The dismissal was therefore unfair under Section 45. The court awarded one month's salary in lieu of notice (Kshs. 85,002) and twelve months' salary as compensation for wrongful and unfair termination (Kshs. 1,020,024), totalling Kshs. 1,105,026 less statutory deductions and amounts already paid, plus a certificate of service and costs. Reinstatement was not granted, compensation being awarded instead.

Key legal issues

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01

Validity of reasons for termination

Holding

The reasons advanced (gross misconduct over irregular funds transfers) were not proved; the court found no valid reasons to warrant dismissal for gross misconduct.

Reasoning

The respondent alleged breach of an Operations Manual circular on processing money transfers on customers' letters of instruction, but failed to produce documents showing where the claimant erred or the unsigned vouchers. Approvals evidenced in the claimant's documents remained un-rebutted, and the respondent called no witnesses. The alleged reasons, if they existed, were valid under Section 43, but proof failed.

p. 3
02

Procedural fairness under Section 41

Holding

The claimant was not accorded a fair hearing as contemplated by Section 41 of the Employment Act 2007, rendering the termination unfair under Section 45.

Reasoning

The respondent relied on minutes of a disciplinary committee held on 16/2/2011, but the claimant was not present at that meeting from the membership. Section 41 requires the employer to explain reasons to the employee and hear representations before termination. Since no formal hearing was held, her right to be heard was flouted.

p. 3

Legal principles established

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  • An employer must prove both the validity of the reason for termination and that a fair procedure under Section 41 of the Employment Act was followed; failure to accord the employee a hearing renders the dismissal unfair under Section 45.
  • Where an employer alleges breach of internal circulars or unsigned vouchers, it bears the burden of producing that evidence; failure to do so means the alleged misconduct is unproven.

Court orders

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  1. 1.Payment of 1 month salary in lieu of notice of Kshs. 85,002
  2. 2.Payment of 12 months' salary as compensation for wrongful and unfair termination (Kshs. 1,020,024), total award Kshs. 1,105,026 less statutory deductions and what was paid to her account
  3. 3.Issuance of a Certificate of Service to the Claimant
  4. 4.Respondents to pay costs of the suit

Authorities

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Legislation

  • Employment Act 2007Section 41
  • Employment Act 2007Section 43
  • Employment Act 2007Section 45
  • Employment Act 2007Section 42(1)
  • Employment Act 2007Section 44(3) and (4)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act 2007 (claim for wrongful and unfair termination)

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, "Jane A Ogoti v Kenya Commercial Bank Limited [2015] KEELRC 396 (KLR)", Case Analysis (2015). Cause No. 1374 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/396/eng@2015-10-14

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