Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 595 of 2013· [2016] KEELRC 844 (KLR)

John Kabiru v National Bank Of Kenya Limited [2016] KEELRC 844 (KLR)

Employment and Labour Relations Court
18 July 2016
3,770 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

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

#
John Kabiru, formerly Risk Manager of National Bank of Kenya Limited, claimed damages for wrongful termination after his summary dismissal on 11th August 2011. He alleged the dismissal was retaliation for highlighting Central Bank recommendations on the independence of the risk function and for raising concerns over bonds trade exposure, culminating in an irregular transfer to Maua which he resisted on health and study grounds while on sick leave. The Respondent maintained that the transfer was a legitimate business decision under his contract, that he refused to honour it, fabricated medical reports, and engaged in outside employment through part-time teaching, warranting summary dismissal for gross misconduct. The court framed three issues: valid reasons, due process and remedies. On substance, it held that loss of confidence is not a statutory ground of gross misconduct under Section 44 of the Employment Act; that the claimant was dismissed on the last day of a proved sick off; and that no evidence established outside employment, part-time PhD teaching not amounting to another job. On procedure, the claimant was never taken through a formal disciplinary hearing as required by Section 41 of the Employment Act and Article 50(1) of the Constitution. Both limbs of Section 45(2) therefore failed. The court allowed the claim, awarding 12 months' salary (Kshs. 3,345,216) as compensation for unfair termination, 3 months' salary in lieu of notice (Kshs. 1,672,608), interest, a certificate of service and costs of the suit. The claimed sum of Kshs. 14,601,786 was not awarded in its entirety, nor the end-of-service pay or loan benefit claims.

Key legal issues

#
01

Whether the employer proved valid reasons for the dismissal

Holding

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

Reasoning

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.

p. 7
02

Whether the termination followed due process

Holding

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

Reasoning

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.

p. 7
03

What remedies should be granted

Holding

The claimant was awarded 12 months' salary for unfair termination, 3 months' salary in lieu of notice, interest, a certificate of service and costs

Reasoning

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.

p. 7

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. 1.12 months salary as damages for wrongful and unfair termination amounting to Kshs. 3,345,216
  2. 2.3 months salary in lieu of notice amounting to Kshs. 1,672,608
  3. 3.Interest on the awarded amounts
  4. 4.Issuance of a Certificate of Service
  5. 5.Costs of the suit to the Claimant

Authorities

#

Legislation

  • Employment ActSection 10(2)(c)
  • Employment ActSection 10(3)
  • Employment ActSection 10(5)
  • Employment ActSection 41(1) and (2)
  • Employment ActSection 42(1)
  • Employment ActSection 43(1) and (2)
  • Employment ActSection 44(3) and (4)
  • Employment ActSection 45(2)
  • Employment ActSection 46
  • Constitution of KenyaArticle 50(1)

Cases cited (6)

  • Boniface Nyamweya Ogeto Vs Mutsimoto Company Limited
    (2014) eKLR
  • Peris Nyambura Kimani Vs Albit Petroleum Limited
    (2014) eKLR
  • John Otieno Mukabi Vs Kenya Builders & Concrete Company Limited
    (2014) eKLR
  • Abraham Nyambane Asiago Vs Barclays Bank of Kenya
    (2013) eKLR
  • Anthony Mkala Chitavi Vs Malindi Water and Sewarage Company Limited
    (2013) eKLR
  • Godfrey Makindu Bs Trans Business Machines Limited
    (2013) eKLR
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.