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ELRCPartially AllowedIndustrial Cause (Cause No. 1965 of 2014 is the related application; claim filed 25.2.2014, amended 24.12.2014)· [2016] KEELRC 453 (KLR)

Leonard Gethoi Kamweti v National Bank of Kenya Limited & 2 others [2016] KEELRC 453 (KLR)

Industrial Court of Kenya (Employment and Labour Relations Court)
12 October 2016
3,612 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Employment Court ruled National Bank's 'early retirement' of its Company Secretary was actually unfair termination and awarded him 12 months' salary.

What this practically means

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Executive summary

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The Claimant, a Lawyer and Certified Public Secretary employed by the Respondent bank since 1996 as Company Secretary, sued for damages for unlawful termination of his employment on 30.6.2013. He alleged his termination was a reprisal for refusing to withdraw a disciplinary complaint against Mr. Ahmednasir, a lawyer connected to the bank's Managing Director and Chairman, and that he was condemned unheard at a board meeting of 8.7.2013. The Respondent maintained that the Claimant was not terminated but early-retired at 51 years under Clause 9.4.1 of its Human Resource Manual, with all dues paid, and objected to the constitutional claims and to the use of the Claimant's audio recording of board proceedings. The court framed two issues: whether the early retirement discretion was fairly and properly exercised, and if not, what remedies applied. It admitted the Claimant's audio recording under Section 78(A) of the Evidence Act, finding it authentic and made in the ordinary course of duty. The recording showed the Chairman expressing loss of confidence in the Claimant and the board discussing his exit under the 'fifty year rule'. The court held that early retirement must be exercised with an open mind and judiciously; the Respondent failed to demonstrate this, rendering the early retirement unfair and unlawful. The court found possible discrimination in benefits compared to another retiree but declined to unsettle the terminal benefits paid, and made no constitutional award. It awarded 12 months' salary (Kshs. 8,050,728 less statutory deductions), a Certificate of Service, costs, and interest from the date of judgment.

Key legal issues

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01

Whether the employer's exercise of its early retirement discretion was fair and lawful

Holding

The early retirement was not exercised fairly, openly or judiciously; it was a pretext for termination and was therefore unfair and unlawful

Reasoning

Though the HR Manual allowed early retirement at the bank's direction, the court held the discretion had to be exercised objectively and judiciously. The Claimant's authentic audio recording of the 8/7/2013 board meeting, admitted under Section 78(A) of the Evidence Act, showed the board discussing his exit and loss of confidence in him before invoking early retirement. The Respondent's witness could assign no reason for the decision, so the discretion was not exercised objectively.

p. 7
02

Admissibility of the Claimant's audio recording of board proceedings

Holding

The electronic evidence was admitted under Section 78(A) of the Evidence Act

Reasoning

The Respondent objected to production of the electronic evidence, but the court admitted it under Section 78(A) of the Evidence Act, which makes electronic and digital material admissible even if not in original form. The Claimant demonstrated he made the recordings himself in the ordinary course of his duties as Company Secretary and showed previous recordings to establish authenticity, and the recording, when played, corroborated his account of the board discussing his exit.

p. 6
03

Whether the Claimant was treated in a discriminatory manner in payment of terminal benefits

Holding

The court found possible discrimination in principle but declined to unsettle the terminal benefits paid

Reasoning

The Claimant gave unrebuted evidence that a former employee, Ali Noor Ismael, received double his benefits, and the Respondent neither responded to nor rebutted this evidence, leading the court to find discriminatory treatment. However, the evidence did not specify what was paid double, and the benefits already paid (severance, medical allowance, half month's salary per year to retirement) were a reasonable settlement, so no additional award was made.

p. 7
04

Whether constitutional declarations and damages were warranted

Holding

No constitutional award was made; the claim succeeded on ordinary employment law grounds

Reasoning

The Respondent urged the court to restrict itself to wrongful dismissal rather than constitutional infringement, relying on Paul Muhoro Kihara v Barclays Bank. The court made no finding of constitutional breach and instead compensated the Claimant through the statutory remedy of 12 months' salary for unfair termination under the Employment Act, leaving the constitutional prayers effectively unaddressed.

p. 7

Legal principles established

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  • Any form of truncation of employment other than natural retirement by effluxion of time is a termination, and where an employer has discretion to early retire an employee it must be exercised objectively, openly and judiciously
  • Termination of employment must always be on objective and demonstrable grounds
  • Electronic and digital recordings are admissible in evidence under Section 78(A) of the Evidence Act, and an employee's audio recording made in the ordinary course of duty may be admitted where authenticity is demonstrated

Court orders

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  1. 1.Award of 12 months' salary as damages for unfair termination, computed as 12 x 670,894 = Kshs. 8,050,728 less statutory deductions
  2. 2.Issuance of a Certificate of Service to the Claimant
  3. 3.Respondents to pay costs of the suit
  4. 4.Awarded amount to attract interest at Court rates from the date of judgment

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 25, 27, 33, 41, 50(1), 50(4)
  • Employment Act, 2007Sections 5(3), 45, 45(2)
  • Evidence ActSection 78(A)
  • Industrial Court Act, 2011Section 12
  • Defamation ActSection 3

Cases cited (5)

  • D.K. Njagi Marete vs. Teachers Service Commission
    (2013) eKLR (also cited as 379/2009)
  • Phelesia Olukunga vs. Land Husbandry & Another
    Cause No. 927 of 2010
  • Paul Muhoro Kihara vs. Barclays Bank of Kenya Limited
    Civil Case No. 33 of 2002
  • Julie Toprian Njeru vs. Kenya Tourist Board
    Cause Number 886 of 2010
  • Ahmednasir Abdikadir & Company vs. National Bank of Kenya Limited
    HC Misc. Case No. 753 of 2004
Jurisdiction invoked
Jurisdiction of the Industrial Court under the Industrial Court Act, 2011 (Section 12 on remedies referenced); the Respondent disputed jurisdiction over pension and constitutional issues but the court proceeded to determine the claim

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, "Leonard Gethoi Kamweti v National Bank of Kenya Limited & 2 others [2016] KEELRC 453 (KLR)", Case Analysis (2016). Industrial Cause (Cause No. 1965 of 2014 is the related application; claim filed 25.2.2014, amended 24.12.2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/453/eng@2016-10-12

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