Banking Insurance & Finance Union (Kenya) v Barclays Bank of Kenya Ltd & another [2016] KEELRC 461 (KLR)
The bottom line
#Kenya's Employment Court ruled that banks can manage employee performance as they wish, but must still follow fair legal steps before firing anyone.
What this practically means
#Executive summary
#Key legal issues
#Whether the introduction of the Performance Development Plans, Performance Improvement Plan and capability hearings violated the Recognition Agreement and CBA
No violation. These are management tools/methods, non-negotiable items under clause 17 of the Recognition Agreement, within the employer's prerogative
Both parties agreed the PDP and PIP are management tools. Clause 17 of the Recognition Agreement lists management methods as non-negotiable, an agreement reached in 2000 which the Claimant never sought to vary through the agreed procedure. The court found no merit in disturbing what the parties agreed as binding between themselves.
Whether the union must be involved in disciplinary action arising from performance tools
Yes. Once the process results in disciplinary action, the CBA and section 41 of the Employment Act require the Claimant union's participation in the proceedings
While the administrative performance evaluation is the employer's prerogative and the union does not participate in it, once the outcome leads to disciplinary action the Recognition Agreement, CBA and section 41 of the Employment Act require the union's participation as representative of its member. The internal warnings cannot circumvent the mandatory statutory requirements of show-cause notice, hearing notice and union involvement.
Whether the 2008 revised contracts of employment were a nullity for want of consultation under section 10(5) of the Employment Act
No. The court found compliance with section 10 read as a whole and no violation
The contracts were revised in 2008 with a memo to staff and employees signed the new contracts. The employees have used the PDP, PIP and capability hearings and worked under these contracts for over 8 years without challenge. The court held there are legal safeguards in sections 41 and 43 of the Employment Act to address any issues arising from the tools, and found no violation of section 10 in its application.
Whether new issues not reported to the Minister could be introduced in the suit
Yes. The Claimant filed the dispute with the court as of right and may register the dispute even where the matter was reported to the Minister with issues not addressed then
The dispute was not initiated as a consequence of a certificate of disagreement under the Labour Relations Act. The warning letters and terminations attached to the pleadings were the core subject of the issue in dispute, so the Claimant had the right to register the dispute with the court even where the earlier report to the Minister had not addressed those issues.
Whether the Joint Workers Council consultations amounted to consultation with the Claimant union
No. The Joint Workers Council is an internal body of the Respondent's workers and its members cannot be taken as representatives of the Claimant absent specific invitation
The minutes attached (Annexure EX7) showed no person attending as representing the Claimant union, and none of the minutes raised discipline or termination of employment. Where the shop steward sits on both the Joint Negotiating Council and Joint Workers Council, the Respondent must be clear that such employee attends as a member only, not as the union's representative, and any conflict must be addressed in a subsequent CBA.
Legal principles established
#- Before termination on grounds of poor performance, an employer must have genuine, valid and fair reasons, give the employee notice and a hearing in the presence of their representative, and issue written notice of the intended termination before making the decision
- Internal performance management tools cannot replace the mandatory statutory procedures for termination
- It is not sufficient to cite poor performance as a reason for termination; the employer must demonstrate support measures put in place and the employee's failure to improve despite such support
- A credible performance appraisal process must be participatory; where the employee is left out it cannot pass
- Where an employer's performance practice results in disciplinary action against a unionised employee, the CBA terms and the union's participation in the disciplinary process must apply
- Any change to a written contract of employment must be done in consultation with the employee and brought to the employee's attention in writing, but the court found compliance here
Court orders
#- 1.The claims as set out shall not be allowed save for matters set out in paragraphs 78, 85, 95, 101 and 110 of the judgment
- 2.The Performance Development Plans, Performance Improvement Plan and capability hearings remain management prerogatives of the Respondent but must not replace the legal requirements for termination under sections 41 and 43 of the Employment Act
- 3.Where the process results in disciplinary action, the Claimant union must be informed and invited to participate in such proceedings
- 4.The warning letters shall remain internal records of the Respondent, and before any termination on grounds of poor performance the Respondent must comply with sections 41 and 43 of the Employment Act
- 5.The Claimant is at liberty to pursue separate claims for the terminations of Francis Ndirangu Wachirah and Peter Mathuku Mulandi where time allows
- 6.Each Party shall bear own costs
- Jurisdiction invoked
- Jurisdiction of the Employment and Labour Relations Court to hear all employment and labour relations matters; the Claimant filed the dispute with the court as of right under the Labour Relations Act framework
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- National Bank of Kenya v Mutonya (Civil Appeal 118 of 2017) [2019] KECA 404 (KLR)[2019] KECA 404 (KLR)6 Aug 2019
- Banking Insurance and Finance Union (Kenya) v Consolidated Bank of Kenya Limited [2018] KEELRC 2156 (KLR)[2018] KEELRC 2156 (KLR)9 Feb 2018
Cite this brief
#Cite this brief
Caselaw, "Banking Insurance & Finance Union (Kenya) v Barclays Bank of Kenya Ltd & another [2016] KEELRC 461 (KLR)", Case Analysis (2016). Cause No. 95 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/461/eng@2016-08-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.