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ELRCPartially AllowedCause No. 605 of 2013· [2015] KEELRC 742 (KLR)

Vincent E O Odhiambo v Kenya Commercial Bank Limited [2015] KEELRC 742 (KLR)

Employment and Labour Relations Court
22 July 2015
HWHellen S. Wasilwa
2,433 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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KCB's failure to hear an employee before dismissing him made the termination unfair, costing the bank over Kshs.800,000 in compensation.

What this practically means

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Executive summary

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The Claimant, employed by Kenya Commercial Bank from 1996 and rising to Section Head at the Central Processing Centre, was terminated on 23rd February 2011 on grounds of gross misconduct and loss of confidence arising from cheques drawn on the account of Samburu Teachers Cooperative Sacco which were paid without the proper call-back validation. The court framed three issues: whether there were valid reasons for termination, whether due process was followed, and whether remedies were due. On the first issue, although the termination letter failed to give reasons as required by Section 43 of the Employment Act, the court found from the show-cause correspondence that the Claimant was aware of the allegations and that proper reasons existed to warrant disciplinary action. On the second issue, the minutes of the disciplinary committee showed the Claimant was neither present nor heard, breaching Section 41 of the Employment Act and Article 50(1) of the Constitution; the termination was accordingly declared unfair under Section 45. On remedies, the court awarded six months' salary (Kshs.676,122) as compensation for unfair termination and overtime of Kshs.131,742 for 176 hours, totaling Kshs.807,864. The claim for 50% fees reimbursement failed for lack of proof, and other unproved parts of the claim were not awarded. The court ordered issuance of a Certificate of Service and that the Respondent pay the costs of the suit.

Key legal issues

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01

Validity of reasons for termination

Holding

There were proper reasons to warrant action against the Claimant (negligence over unpaid cheques), though the reasons were not properly communicated in the termination letter as required by Section 43.

Reasoning

The termination letter cited only 'gross misconduct' and 'loss of confidence' without particulars, which Section 43 of the Employment Act requires. However, on cross-examination the Claimant admitted receiving and answering a show-cause letter about cheques paid without the call-back process, demonstrating he was aware of the reasons for the disciplinary action against him.

p. 4
02

Procedural fairness of the disciplinary process

Holding

The disciplinary proceedings offended Section 41 of the Employment Act and Article 50(1) of the Constitution; the Claimant was not present before, heard by, or allowed to defend himself before the disciplinary committee.

Reasoning

The minutes of the disciplinary committee meeting of 6/2/2011 did not show the Claimant's presence, nor that he was asked to explain or defend himself against the accusations. The Respondents therefore flouted the rules of natural justice and Section 41 of the Employment Act as well as Article 50(1) of the Constitution on fair hearing.

p. 5
03

Unfairness of the termination

Holding

The termination was unfair within the meaning of Section 45 of the Employment Act 2007 because it was effected without due process and without explicitly giving reasons.

Reasoning

Having found valid reasons existed but were not properly communicated, and that the disciplinary process breached Section 41 and Article 50(1), the court concluded the Respondents terminated the Claimant without following due process, making the termination unfair under Section 45.

p. 5
04

Overtime claim

Holding

The Claimant is entitled to overtime compensation of 176 hours, awarded as Kshs.131,742 as claimed, since the Respondents gave no evidence that overtime worked was paid.

Reasoning

Work beyond the normal 8 hours per day constitutes overtime calling for compensation. The Claimant's Appendix 6 proved he worked beyond normal hours between 27/10/2010 and 22/11/2008, and the Respondents produced no evidence that he was paid for that overtime, so the claim succeeds as claimed.

p. 5

Legal principles established

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  • An employer must prove the reason or reasons for termination; where the employer fails to do so, the termination is deemed unfair under section 45 of the Employment Act.
  • Before terminating an employee on grounds of misconduct, the employer must explain the reasons to the employee and hear and consider any representations the employee makes.

Court orders

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  1. 1.Declaration that the termination was unfair within the meaning of Section 45 of the Employment Act 2007
  2. 2.Award of 6 months' pay as compensation for unfair termination being Kshs.676,122
  3. 3.Award of overtime compensation of Kshs.131,742 (176 hours), total award Kshs.807,864
  4. 4.Respondent to issue the Claimant with a Certificate of Service
  5. 5.Respondent to pay costs of the suit
  6. 6.Dismissal of the claim for 50% fees reimbursement

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 41
  • Employment ActSection 45
  • Employment ActSection 42(1)
  • Employment ActSection 44(3) and (4)
  • Constitution of KenyaArticle 50(1)
  • Collective Bargaining Agreement (Section Heads, Check Clerks, Clerical, Technical and Subordinate Staff)Clause A5(c)(i)/5(d)
Jurisdiction invoked
Employment and labour relations jurisdiction of the Employment and Labour Relations Court (Cause No. 605 of 2013)

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, "Vincent E O Odhiambo v Kenya Commercial Bank Limited [2015] KEELRC 742 (KLR)", Case Analysis (2015). Cause No. 605 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/742/eng@2015-07-22

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