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ELRCPartially AllowedCause No 717 of 2010· [2015] KEELRC 1189 (KLR)

Evans Kamadi Misango v Barclays Bank of Kenya Limited [2015] KEELRC 1189 (KLR)

Employment and Labour Relations Court of Kenya
17 April 2015
LNLinnet Ndolo
2,279 words in judgment
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The bottom line

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Kenya's Employment Court upheld a banker's dismissal for negligence but awarded him notice pay and leave dues because the bank admitted owing them.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent Bank from September 1988 and risen to Customer Advisor, was terminated on 31st January 2009 following a fraudulent withdrawal of Kshs. 9,684,200 from a customer's account by means of a cheque book the Claimant had issued at the NIC Branch. Investigations by the Bank and BASIS found discrepancies between the customer's specimen signature and the signatures on the cheque book requisition and collection, which the Claimant failed to detect, contrary to Bank procedures. He sought one month's salary in lieu of notice, compensation for loss of earnings, terminal dues and pending leave. The court framed three issues: validity of the reason for termination, procedural fairness, and remedies. Applying Section 43 of the Employment Act, 2007 and the range of reasonable responses test, the court held the Respondent had a valid reason for termination given the Claimant's own admission of failure to verify the cheque book order and reconfirm the ordering signature, and that banks demand the highest degree of prudence. The disciplinary process, including suspension, a hearing attended with a union representative, and a right of appeal, satisfied Section 41 and the applicable Collective Bargaining Agreement, rendering the termination procedurally fair. Compensation for unfair termination and unproved terminal dues were dismissed. The admitted claims of one month's notice pay (Kshs. 62,944) and 15 days' leave pay (Kshs. 31,472) were awarded, totalling Kshs. 94,416, with each party bearing their own costs. The claim thus succeeded only in part. Dated and delivered at Nairobi on 17th April 2015 by Linnet Ndolo, Judge.

Key legal issues

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01

Whether there was a valid reason for termination (substantive fairness)

Holding

Yes - the Claimant negligently issued a cheque book used to defraud a customer of Kshs. 9,684,200, failing to follow Bank procedures and to spot obvious signature discrepancies; the dismissal fell within the band of reasonable responses.

Reasoning

The court applied Section 43 of the Employment Act and the range of reasonable responses test from Halsbury's Laws of England. Relying on the unchallenged BASIS investigation report and the Claimant's own admission at the disciplinary hearing that he should have verified the cheque book order and reconfirmed the ordering signature, the court found a reasonable employer could dismiss on those facts. Banks demand the highest prudence, which the Claimant failed to meet.

p. 5
02

Whether due procedure was observed (procedural fairness)

Holding

Yes - the disciplinary process complied with Section 41 of the Employment Act and the applicable Collective Bargaining Agreement.

Reasoning

The Claimant was suspended to facilitate investigations, required to explain the circumstances, invited to a disciplinary hearing on 4th December 2008 where he was accompanied by a union representative, and advised of his right of appeal. The court examined these steps against the requirements of Section 41 of the Employment Act, 2007 and the applicable CBA, and found them compliant, making the termination procedurally fair.

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03

Entitlement to remedies

Holding

Compensation for unfair termination and terminal dues dismissed; one month's salary in lieu of notice and 15 days' leave pay, being admitted, awarded.

Reasoning

Since the termination was found substantively and procedurally fair, the claim for compensation under Section 45 failed. Terminal dues were not proved. The claims for notice pay (Kshs. 62,944) and leave pay for 15 outstanding days (Kshs. 31,472), totalling Kshs. 94,416, were admitted by the Respondent and therefore payable.

p. 5

Legal principles established

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  • Under Section 43 of the Employment Act, 2007, the employer bears the burden of proving the reason or reasons for termination, failing which the termination is deemed unfair.
  • The court applies the range of reasonable responses test and will not substitute its own views for those of the employer.
  • The court does not re-enact internal disciplinary processes; it examines their legality and reasonableness.
  • Banks operate in a highly sensitive environment requiring the highest degree of prudence and probity from their employees.

Court orders

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  1. 1.Award to the Claimant of 1 month's salary in lieu of notice of Kshs. 62,944
  2. 2.Award to the Claimant of 15 days' leave pay of Kshs. 31,472 (total award Kshs. 94,416)
  3. 3.Dismissal of the claim for compensation on account of unfair termination
  4. 4.Dismissal of the claim for terminal dues
  5. 5.Each party to bear their own costs

Authorities

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Legislation

  • Employment Act, 2007Section 43
  • Employment Act, 2007Section 41
  • Employment Act, 2007Section 45

Cases cited (1)

  • Agnes Murugi Mwangi Vs Barclays Bank of Kenya Limited
    [2013] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Cause No 717 of 2010, Employment Act, 2007)

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, "Evans Kamadi Misango v Barclays Bank of Kenya Limited [2015] KEELRC 1189 (KLR)", Case Analysis (2015). Cause No 717 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1189/eng@2015-04-17

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