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ELRCPartially AllowedCause No 544 of 2013· [2015] KEELRC 1515 (KLR)

Banking Insurance And Finance Union (Kenya) v Kenya Commercial Bank Limited [2015] KEELRC 1515 (KLR)

Employment and Labour Relations Court
20 January 2015
2,102 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled KCB unfairly dismissed a bank teller because the dismissal letter gave no clear reason and no disciplinary hearing was held.

What this practically means

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Executive summary

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The Claimant Union sued on behalf of its member Jacqueline Karenya Abwao (the Grievant), a teller dismissed by Kenya Commercial Bank on 8th February 2012 following a complaint by a customer, Katuwet J. Kiboino, at the Marigat Branch. The Union sought a declaration that the dismissal was wrongful and unfair, salary from dismissal to award, re-engagement, exemplary damages of Kshs. 5,000,000, refund of a loan overpayment of Kshs. 700,000, twelve months' salary as compensation, costs and interest. The Respondent justified the dismissal on gross misconduct, relying also on the Grievant's disciplinary record spanning 2007 to 2011. The Court framed three issues: valid reason, due process, and entitlement to reliefs. It held there was no valid reason: the dismissal letter specified no acts of misconduct, and past allegations already subjected to disciplinary process were 'quenched' and could not be recycled; the customer's allegations were untested since the Grievant never faced her accusers and no eyewitness employees testified. Procedurally, the Respondent's own witness confirmed no disciplinary hearing was held, contrary to Section 41 of the Employment Act and the CBA. The termination was unfair both substantively and procedurally. The Court awarded six months' salary as compensation, refused reinstatement owing to the Grievant's negative employment record, dismissed the exemplary damages and loan refund claims as unproved, directed tabulation based on the last monthly gross salary subject to statutory tax, and ordered each party to bear their own costs.

Key legal issues

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01

Whether the Respondent had a valid reason for terminating the Grievant's employment

Holding

No valid reason was established; the termination letter did not specify the acts of gross misconduct, and past allegations already subjected to disciplinary process could not be recycled.

Reasoning

The dismissal letter referred generally to gross misconduct without specification. Past accusations had been dealt with via show cause letters to which the Grievant responded; the Court held such accusations were quenched. The customer's allegations were untested because the Grievant was not allowed to face her accusers and no eyewitness employees testified viva voce. Substantive justification under Sections 43 and 45 therefore failed.

p. 4
02

Whether the Respondent observed due process in effecting the termination

Holding

The termination was procedurally unfair; no disciplinary hearing was held as required by Section 41 of the Employment Act and the CBA.

Reasoning

Section 41 requires explanation of reasons in a language the employee understands, presence of a representative, and hearing of explanations. The Respondent's own Service Quality and Compliance Manager confirmed there was no disciplinary hearing before termination, and no evidence showed observance of the CBA disciplinary procedure. The termination was therefore unfair for want of due process.

p. 5
03

Whether the Grievant is entitled to the reliefs sought

Holding

Partially: six months' salary as compensation awarded; reinstatement, exemplary damages and loan overpayment refund refused.

Reasoning

Having found the termination unfair both substantively and procedurally, the Court awarded six months' salary, considering the Grievant's length of service but also her negative disciplinary record, which disqualified her from reinstatement. Exemplary damages and the loan refund claim were not proved and were dismissed. Costs were left to each party.

p. 5

Legal principles established

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  • An employer must prove the reason for termination and state it clearly in the letter of termination.
  • An accusation that has been the subject of a disciplinary process, whether completed or not, cannot be reused to justify future disciplinary action.
  • Failure to hold a disciplinary hearing before dismissal breaches Section 41 of the Employment Act and renders the termination procedurally unfair.

Court orders

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  1. 1.Award of six (6) months' salary in compensation for unfair termination
  2. 2.Reinstatement (re-engagement) denied
  3. 3.Claims for exemplary damages and refund of loan overpayment dismissed
  4. 4.Respondent directed to tabulate the compensation based on the Grievant's last monthly gross salary subject to statutory tax only
  5. 5.Each party to bear their own costs
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 41, 43 and 45 applied)

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, "Banking Insurance And Finance Union (Kenya) v Kenya Commercial Bank Limited [2015] KEELRC 1515 (KLR)", Case Analysis (2015). Cause No 544 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1515/eng@2015-01-20

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