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ELRCPartially AllowedCause No. 332 of 2013· [2018] KEELRC 265 (KLR)

Stephen Maina Thumbi v Equity Bank Limited [2018] KEELRC 265 (KLR)

Employment and Labour Relations Court
20 December 2018
HWHellen S. Wasilwa
2,030 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan bank's failure to prove its theft accusation and give its employee a hearing cost it over Kshs. 1.9 million.

What this practically means

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Executive summary

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The Claimant, formerly an Assistant Internal Auditor and later Garissa Branch Relationship Manager of the Respondent bank, was summarily dismissed by letter dated 29 November 2011 for alleged involvement in theft of Kshs. 224,000 from an ATM at the Garissa Branch. He sought a finding of unfair termination, compensation of Kshs. 9,509,600, exemplary damages, interest, a certificate of service and costs. The Respondent defended the dismissal as gross misconduct under Section 44 of the Employment Act, relying on an alleged admission in a letter dated 30 November 2011 in which the Claimant proposed to repay the lost cash in monthly instalments. The Respondent did not file submissions. RW1, a former investigations officer, testified that the ATM journals showed no indication that the Claimant accessed or loaded the ATM and identified the main custodian as Denis Owino; his investigation report was withheld as confidential. RW2, the HR Manager, asserted due procedure was followed. The court framed three issues: valid reason, fair hearing, and remedies. It found the reply letter was not an admission and postdated the dismissal; RW1's evidence exonerated the Claimant; and the Respondent failed to prove reasons for termination as required by Section 43. No hearing under Section 41 was conducted. The dismissal was held unfair and unjustified. The court awarded Kshs. 224,000 deducted from final dues, Kshs. 125,400 accrued leave, one month's notice pay, and 12 months' salary (Kshs. 1,504,800) as compensation, with costs and interest. The claims for exemplary damages and a certificate of service were not granted in the final orders.

Key legal issues

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01

Valid reason for termination

Holding

Respondent had no valid reason to summarily dismiss the Claimant for ATM theft

Reasoning

The letter relied on as an admission did not admit involvement in the crime and postdated the dismissal, so it could not be the basis for dismissal. RW1 testified that the ATM journals did not indicate the Claimant accessed or loaded the ATM, and identified the main custodian as Denis Owino. The court found this evidence exonerated the Claimant and that no tangible evidence proved his involvement.

p. 3
02

Fair procedure under Section 41

Holding

The Claimant was not afforded a hearing as envisaged under Section 41 of the Employment Act

Reasoning

The Claimant testified he was never subjected to any hearing, and the court found no indication he was given the explanation and opportunity to make representations required before termination on grounds of misconduct or before summary dismissal under section 44.

p. 3
03

Unfair termination and remedies

Holding

The dismissal was unfair and unjustified, entitling the Claimant to compensation

Reasoning

Having been dismissed without a valid reason and without due process, the dismissal was unfair under Sections 43 and 45. The court awarded the deducted Kshs. 224,000, accrued leave, one month's notice pay and 12 months' salary as compensation, with costs and interest.

p. 3

Legal principles established

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  • The employer bears the burden of proving the reason for termination, failing which the termination is unfair
  • Lack of trust as a ground for dismissal must be based on tangible evidence

Court orders

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  1. 1.Respondent to pay Kshs. 224,000 being the amount deducted from Claimant's final dues
  2. 2.Respondent to pay Kshs. 125,400 for accrued leave not taken in 2011
  3. 3.Respondent to pay Kshs. 125,400 being 1 month salary in lieu of notice
  4. 4.Respondent to pay Kshs. 1,504,800 being 12 months' salary as compensation for wrongful and unfair termination
  5. 5.Respondent to pay costs of the suit with interest at court rates from the date of judgment, save that interest on items 1 and 2 runs from the date of filing suit

Authorities

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Legislation

  • Employment ActSection 44
  • Employment ActSection 41
  • Employment ActSection 43
  • Employment ActSection 45
  • Constitution of KenyaArticle 159

Cases cited (3)

  • CMC Aviation Limited v Mohammed Noor
    [2015] eKLR
  • Kenya Union of Commercial Food and Allied Workers v Meru North Farmers Sacco Limited
    [2013] eKLR
  • Mary Chemweno Kiptui v Kenya Pipeline Company Limited
    [2014] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act over termination of employment claims

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Stephen Maina Thumbi v Equity Bank Limited [2018] KEELRC 265 (KLR)", Case Analysis (2018). Cause No. 332 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/265/eng@2018-12-20

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