Banking Insurance & Finance Union (Kenya) v Ukulima Sacco Society Ltd [2015] KEELRC 1063 (KLR)
The bottom line
#Ukulima Sacco wrongfully fired an employee by skipping the disciplinary trial his union agreement required, but the court awarded only modest compensation.
What this practically means
#Executive summary
#Key legal issues
#Applicability of the unfair termination concept under the Employment Act, 2007 to a 2005 termination
The claim for unfair termination fails as a matter of law; the applicable law is the repealed Employment Act, Cap 226 and the parties' Collective Bargaining Agreement
The termination occurred on 10th February 2005, before the Employment Act, 2007 came into operation. The concept of 'unfair termination' and the 12-month compensation are creatures of the 2007 statute. A right not outlined under the repealed law cannot found a claim arising before the effective date, so the court assessed the dismissal under the repealed Act and the CBA instead.
Compliance with the CBA procedure of suspension, investigations and trial
The termination was wrong because the grievant was not taken through the trial envisaged by the CBA and was not given the audit and investigations reports used against him
Clauses 8 and 9 of the CBA required investigations and a trial where the employee could hear the charges and give a defence - basic tenets of natural justice. The investigation report was never shared with or filed before the court, and the suspension and dismissal were based on different grounds. The respondent failed to accord the grievant a trial as agreed, rendering the termination wrong and the contract breached.
Whether the CBA-sanctioned conversion of summary dismissal into a normal termination discharged the respondent's obligations
The offences were serious enough to justify summary action; having opted for a normal termination, the respondent ought to have taken the grievant through trial
The alleged fraud, falsification and neglect of duty warranted summary dismissal under the CBA and law. The respondent's humane conversion to a normal termination was not reflected in the termination letter and did not dispense with the procedural requirement of a trial before termination; the summary-dismissal route avoided, the termination route still demanded due process.
Whether reinstatement or 12 months' compensation was tenable
Neither was granted; reinstatement was impracticable after 10 years and given the grievant's poor record, and 12 months' compensation had no legal basis under the repealed Act
The claim was filed just before the limitation period expired; reinstatement after a record 10 years would ignore work and labour relations dynamics, and the grievant's poor disciplinary record spanning years dented the claim. Compensation of 12 months is a statutory remedy under the 2007 Act with no basis in the repealed law, so only nominal compensation of one month's salary was awarded.
Legal principles established
#- The concept of 'unfair termination' under the Employment Act, 2007 does not apply retrospectively to terminations occurring before its effective date; claims arising earlier are governed by the repealed Employment Act, Cap 226
- Where a Collective Bargaining Agreement envisages a trial of an employee after investigations and before termination, the employee must be furnished with the investigation and audit reports relied upon and given a chance to be heard; use of such reports without disclosure is an unfair trial process
- Allegations of fraud and falsification of documents are criminal conduct that ought to have been reported to the police for proper criminal investigations
- Reinstatement must be sought as soon as reasonably practicable; lapse of considerable time and the employee's poor work record are relevant to whether reinstatement will be granted
Court orders
#- 1.For the wrong termination of the grievant, the Claimant is awarded one month's salary compensation at Kshs.19,917.00
- 2.Terminal dues owing and arising out of termination as at February 2005 - one (1) month's salary, leave dues, overtime and other work benefits that arose as at the date of termination - shall be computed and paid within 14 days
- 3.The Claimant is awarded 50% costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the unfair/wrongful termination of employment dispute, the applicable substantive law being the repealed Employment Act, Cap 226 Laws of Kenya
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Nicholas Ojiema Okudo v Equator Bottlers Limited [2016] KEELRC 750 (KLR)[2016] KEELRC 750 (KLR)14 Jul 2016
Cite this brief
#Cite this brief
Caselaw, "Banking Insurance & Finance Union (Kenya) v Ukulima Sacco Society Ltd [2015] KEELRC 1063 (KLR)", Case Analysis (2015). Cause No. 1109 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1063/eng@2015-05-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.