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ELRCPartially AllowedCause No. 2132 of 2011· [2015] KEELRC 861 (KLR)

Joseph Maina Gichuhi v Barclays Bank (K) Ltd [2015] KEELRC 861 (KLR)

Employment and Labour Relations Court of Kenya
10 June 2015
MNMathews N. Nduma
2,397 words in judgment
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The bottom line

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A Kenyan court ruled Barclays wrongly fired a 19-year employee without valid reason or fair process, converting his dismissal into an early retirement package.

What this practically means

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Executive summary

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The Employment and Labour Relations Court, sitting in Nairobi, delivered judgment in a test suit by consent (Cause No. 2132 of 2011) whose findings were to guide Cause No. 2472 of 2013, Cause No. 710 of 2009 and Cause No. 1883 of 2013, all against Barclays Bank (K) Ltd. Originally filed in the High Court in 2005, the claim arose from the termination of the Claimant's employment on 4th April 2005 after 19 years of service, on the ground that he failed to follow bank procedures in verifying and approving documents in a fraudulent transfer and sale of shares in the name of Nicholas Colin Oliver Watney. The Claimant contended he had authority under a letter of 16th June 2004 to countersign documents above Kshs 500,000 in certain circumstances, that he was not charged through a proper disciplinary process, and that he should have exited under the voluntary early leaver's scheme circular of 8th October 2003. The bank defended the termination as lawful and denied discrimination, asserting each employee had a distinct contract. The court found the investigation report contained no adverse findings against the Claimant, that he was never served with a notice to show cause, and that the Respondent failed to justify the termination. It declared the termination wrongful and unjustified, found the Claimant entitled to exit under the early leaver's scheme, commuted the termination to a normal exit under the circular, directed the Respondent to compute and file terminal benefits within 30 days, and awarded costs and interest.

Key legal issues

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01

Validity of the reason for termination

Holding

The termination was not for a valid reason; the investigation report contained no adverse findings against the Claimant.

Reasoning

The court examined the BBU investigation report into the fraudulent transfer of shares, which implicated named suspects but made no allegation against the Claimant. The Claimant's authority letter of 16th June 2004 permitted him to countersign documents above Kshs 500,000 when the Head of Registrar Services was absent. The court found the Claimant played no adverse role in the fraud and that the Respondent failed to justify the termination after 19 years of excellent service.

p. 5
02

Fairness of the disciplinary procedure

Holding

The procedure was unfair: no notice to show cause with specific charges was served and no minutes of the disciplinary proceedings were produced.

Reasoning

The Claimant was summoned to a disciplinary hearing without a notice to show cause outlining the specific charges, and none was produced in court. No minutes of the proceedings were presented by either party. The Claimant testified he believed he had been called as a witness rather than as a person charged. The sole defence witness did not participate in the disciplinary hearing and gave no direct evidence of the circumstances of the termination.

p. 4
03

Discrimination in access to the voluntary early leaver's scheme

Holding

The Claimant was entitled to be exited under the voluntary early leaver's scheme like his co-employees, and the termination was converted to a normal exit under the scheme.

Reasoning

The court found the circular of 8th October 2003 offered the scheme to all employees and covered the Claimant in the circumstances, and that he ought to have been exited under the scheme just like co-employees who benefited. The court therefore commuted the adverse termination to a normal exit under the circular and directed computation of terminal benefits thereunder.

p. 5

Legal principles established

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  • An employee must be served with a notice to show cause outlining specific charges before a disciplinary hearing; failure to do so renders the termination procedurally unfair.
  • Where exculpatory evidence exists and the employer cannot justify termination, a termination after long, unblemished service is wrongful and unjustified.
  • A test-suit judgment may apply to similar causes where the facts and circumstances of termination are similar.

Court orders

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  1. 1.Declaration that the termination of the Claimant's employment by letter dated 4th April 2005 was wrongful and unjustified in law, being for no valid reason
  2. 2.Declaration that the Claimant was entitled to be considered for exit under the voluntary early leaver's scheme circular dated 8th October 2003 and ought to have been exited under the scheme
  3. 3.The adverse termination commuted to a normal exit under the Circular of 8th October 2003
  4. 4.Respondent to compute terminal benefits due under the circular of 8th October 2003 and file the computation with the court within 30 days
  5. 5.The judgment to apply to Causes No. 2472 of 2013, 710 of 2009 and 1883 of 2013 if the facts and circumstances of those claimants' terminations are similar
  6. 6.Respondent to pay the costs of the suit
  7. 7.Award payable with interest at court rates from the date of judgment until payment in full
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (suit transferred from High Court, HCC No. 747 of 2005)

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, "Joseph Maina Gichuhi v Barclays Bank (K) Ltd [2015] KEELRC 861 (KLR)", Case Analysis (2015). Cause No. 2132 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/861/eng@2015-06-10

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