Mercy Murugi Njagi v Equity Bank Limited [2018] KEELRC 204 (KLR)
The bottom line
#A Kenyan court ruled Equity Bank unfairly dismissed an employee blamed for a Kshs.6 million loss, awarding her over Kshs.900,000 plus costs.
What this practically means
#Executive summary
#Key legal issues
#Whether there was a valid reason for the summary dismissal
No valid reason was established; the evidence showed the Claimant had handed over the PIN Register and moved departments months before the loss occurred
The court examined the investigation report and handover records. The PIN in question was issued or misused about six months after the Claimant had been transferred to Customer Service and had handed over the PIN Register, verified by her supervisor. The investigation report confirmed the PIN had not been collected while she was still PIN officer. There was therefore no evidence linking her to the theft of the PIN or the loss of over six million shillings.
Whether fair procedure was followed
No due process was followed; the Claimant was arrested, charged and summarily dismissed despite internal investigation findings, and was not even issued a suspension letter
The Respondent's own witness confirmed the Claimant was on suspension pending investigation at half pay but was never issued a suspension letter. Despite the investigation results, the Respondent arrested, charged and summarily dismissed the Claimant, and later listed her with the Credit Reference Bureau after her salary stopped and she defaulted on her personal loan.
Statutory test for unfair termination under Section 45 of the Employment Act
The employer bears the burden of proving a valid and fair reason and fair procedure, which the Respondent failed to discharge
The court applied Section 45(2) of the Employment Act, which places the burden on the employer to prove that the reason for termination was valid, that it was a fair reason related to conduct, capacity or compatibility or operational requirements, and that the termination followed fair procedure. The Respondent failed on all three limbs, making the summary dismissal unfair and unjustified.
Legal principles established
#- A termination of employment is unfair where the employer fails to prove a valid and fair reason and fair procedure
- An employer who arrests, charges and summarily dismisses an employee without following due process acts unfairly even where an internal investigation was conducted
Court orders
#- 1.Declaration that the Claimant's summary dismissal was unfair and unjustified
- 2.Payment of suspension-period salary from April 2010 to July 2010 (Kshs.150,000)
- 3.Order that the Respondent credit the Claimant's loan account with loan repayments as scheduled from 14th July 2010 without accruing penalties
- 4.Order lifting the Claimant's delinquency listing with the Credit Reference Bureau Africa Limited
- 5.12 months' salary as compensation for unlawful dismissal (Kshs.450,000)
- 6.Compensation of legal fees of Kshs.290,000 incurred defending the criminal case
- 7.Service pay at 15 days' salary for each year worked (Kshs.37,500)
- 8.Respondent to pay costs of the suit plus interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act (Claim for unfair dismissal under the Employment Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mercy Murugi Njagi v Equity Bank Limited [2018] KEELRC 204 (KLR)", Case Analysis (2018). Cause No. 674 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/204/eng@2018-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.