John Kabiru v National Bank Of Kenya Limited [2016] KEELRC 844 (KLR)
The bottom line
#A Kenyan court ruled National Bank of Kenya unfairly fired its Risk Manager, ordering over Kshs 5 million compensation because no valid reason or fair hearing preceded the dismissal.
What this practically means
#Executive summary
#Key legal issues
#Whether the employer proved valid reasons for the dismissal
No valid reasons were proved; loss of confidence is not a statutory ground of gross misconduct, the claimant was dismissed while still on sick leave, and no evidence was presented of engagement in another occupation
Section 43 of the Employment Act requires the employer to prove the reasons for termination, which must be matters the employer genuinely believed to exist. The dismissal letter relied on loss of confidence, refusal to honour transfer and working elsewhere. The court found loss of confidence is not a ground under Section 44; the claimant was still on valid sick off when dismissed; and the part-time teaching ancillary to PhD studies did not amount to another job. None of the reasons was substantiated.
Whether the termination followed due process
The dismissal was procedurally unfair because the claimant was not taken through a formal disciplinary hearing as required by Section 41 of the Employment Act
Section 41 obliges an employer to explain the reasons for contemplated termination and to hear and consider the employee's representations, with a representative of the employee's choice present. Article 50(1) of the Constitution guarantees every person a fair hearing before an independent tribunal. The claimant was only issued a show cause letter, responded to it, and was dismissed the next day without any formal hearing, breaching both the statute and the Constitution.
What remedies should be granted
The claimant was awarded 12 months' salary for unfair termination, 3 months' salary in lieu of notice, interest, a certificate of service and costs
Having found both substantive and procedural unfairness, the court exercised its discretion to award the maximum 12 months' gross salary compensation given the claimant's 11 years of service and clean record, plus 3 months' notice pay, in lieu of the declaration sought.
Legal principles established
#- An employer bears the burden of proving valid reasons for termination, and loss of confidence is not one of the enumerated grounds of gross misconduct
- Dismissal of an employee while on proved sick leave without consideration is not a valid ground
- An employer must conduct a formal disciplinary hearing in accordance with Section 41 of the Employment Act and Article 50(1) of the Constitution before terminating employment
Court orders
#- 1.12 months salary as damages for wrongful and unfair termination amounting to Kshs. 3,345,216
- 2.3 months salary in lieu of notice amounting to Kshs. 1,672,608
- 3.Interest on the awarded amounts
- 4.Issuance of a Certificate of Service
- 5.Costs of the suit to the Claimant
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (Claim filed in the ELRC as Cause No. 595 of 2013)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kabiru v National Bank Of Kenya Limited [2016] KEELRC 844 (KLR)", Case Analysis (2016). Cause No. 595 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/844/eng@2016-07-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.