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ELRCPartially AllowedCause No 115 of 2013· [2015] KEELRC 1222 (KLR)

Violet Kadala Shitsukane v Kenya Post Office Savings Bank [2015] KEELRC 1222 (KLR)

Industrial Court (Employment and Labour Relations Court)
20 January 2015
3,286 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld a bank cashier's dismissal for password negligence, but corrected how her notice pay was calculated and refused the bank's full counterclaim.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank from 12th March 1992 and rising to Senior Cashier on a basic salary of Kshs. 64,864, was dismissed on 12th June 2012 after her computer password was used to remove a restraint on a deceased customer's account, enabling withdrawals of Kshs. 100,000. A colleague, Philip Okeyo, admitted using her password without her consent. She sued seeking notice pay, leave pay, prospective loss of income for 19 years, and maximum compensation for unfair termination, alleging malice. The Respondent defended the termination as justified for negligence and counterclaimed for outstanding loan liabilities. The court, per Nzioki wa Makau J, framed three issues: fairness of the termination, entitlement to relief, and the counterclaim. It applied Sections 41 and 43 of the Employment Act, holding that the Claimant received a show cause notice, responded, faced a disciplinary committee, was informed of the decision in the presence of the HR manager, and appealed - so the termination was procedurally fair and substantively warranted, she being the sole custodian of her password. The only procedural defect was failure to allow a companion of her choice when the termination decision was communicated. Her dues were to be recalculated to include house allowance in the notice pay. No pay was awarded for the 19 years of lost service, following D. K. Njagi Marete v Teacher Service Commission. On the counterclaim, the bank failed to prove the sums as no statements were produced, but judgment was entered for the admitted sum of KShs. 548,891.80, less 3 months' notice pay on house allowance. The suit was dismissed with no order as to costs.

Key legal issues

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01

Whether the termination was unfair or unlawful

Holding

Termination was procedurally fair and substantively warranted; the only defect was failure to allow an employee of her choice to be present when the decision to terminate was communicated.

Reasoning

The Claimant received a show cause notice, responded to it, appeared before a disciplinary committee, was informed of the decision in the presence of the HR manager and exercised a right of appeal. The employer proved reasons under Section 43: her password was used to lift a restraint on a deceased customer's account and she was its sole custodian. The court found no marked departure from legal requirements and declined to declare the termination unlawful.

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02

Whether the Claimant is entitled to relief

Holding

Partially - her dues (notice and leave pay) were to be recalculated to include house allowance with the basic pay, but no prospective loss for 19 years was payable.

Reasoning

The court held the notice pay computation was wrong because it excluded house allowance; the correct notice pay includes basic and house allowance but excludes variable allowances. Any recalculated dues reduce the admitted debt to the bank. No compensation was due for the abrupt end of the 19-year service, following D. K. Njagi Marete v Teacher Service Commission.

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03

Whether the Respondent is entitled to recover on the counter claim

Holding

The bank did not prove the sums due under the various heads as no statements were produced, but judgment entered on the admitted sum of KShs. 548,891.80, less notice pay on house allowance.

Reasoning

The court noted the bank failed to prove its claim by documents, producing no statements. However, the Claimant admitted a debt of Kshs. 548,891.80 (after payments in October 2012 and September 2013), so judgment was entered for that admitted amount, further reduced by the recalculated notice pay on house allowance.

p. 5

Legal principles established

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  • An employer must, under Section 43 of the Employment Act, prove the reasons for termination, failing which the termination is deemed unfair under section 45.
  • Procedural fairness in termination accords to the dictates of Section 41 of the Employment Act, including explanation of reasons, hearing representations and a companion of the employee's choice.
  • An employee is the sole custodian of her password and negligence in safeguarding it warrants disciplinary action.

Court orders

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  1. 1.Judgment entered for the Respondent against the Claimant for the admitted sum of KShs. 548,891.80 less the sums not included being 3 months notice pay on house allowance
  2. 2.The Claimant's suit dismissed
  3. 3.No order as to costs

Authorities

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Legislation

  • Employment ActSection 41
  • Employment ActSection 42(1)
  • Employment ActSection 43
  • Employment ActSection 44(3) and (4)
  • Employment ActSection 45

Cases cited (1)

  • D. K. Njagi Marete v Teacher Service Commission
    [2013] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act, ss. 41, 43 and 45)

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, "Violet Kadala Shitsukane v Kenya Post Office Savings Bank [2015] KEELRC 1222 (KLR)", Case Analysis (2015). Cause No 115 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1222/eng@2015-01-20

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