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ELRCDismissedNot stated in the judgment as provided· [2018] KEELRC 444 (KLR)

John Njoroge v National Bank of Kenya Limited [2018] KEELRC 444 (KLR)

Employment and Labour Relations Court
16 November 2018
MOMaureen Onyango
2,713 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A former bank clerk lost his claim for 19 years' salary because Kenya's courts measure dismissal damages by the notice period in the contract.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank as a clerk/cashier from 6th November 1987, was suspended on 2nd September 2002 over irregularities at the Kenyatta Avenue Branch and terminated on 3rd October 2002. He sued for loss and damage equivalent to the remainder of a 19-year working term, service pay for 15 years, damages for breach of contract and wrongful dismissal, aggravated damages, costs and interest, contending that the termination notice failed to state reasons as required by the Collective Agreement. The Respondent maintained the termination was lawful under Clause 5(d) of the CBA and the repealed Employment Act, Cap 226, that the Claimant was paid one month's salary in lieu of notice, and that loss of confidence was a valid reason given his negligence and prior warnings. The court framed two issues: the fairness and justifiability of the termination, and the availability of remedies. It held that, at the material time, employers were not obliged to give reasons or hear employees before termination; employment was at the will of the employer, and the termination, effected with one month's salary in lieu of notice, complied with both the law and the contract. The measure of damages was the notice period under the termination clause, so no further damages, service pay or general damages were payable. Aggravated damages failed for want of proof of malice. The entire claim was dismissed with each party bearing its own costs.

Key legal issues

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01

Whether the termination was fair and justifiable under the Collective Agreement and the law applicable at the time

Holding

The termination was not unlawful as it complied with both the law and the terms of the contract

Reasoning

The termination was effected under the CBA clause permitting one month's notice or salary in lieu. The repealed Employment Act and the then case law (Murgani, Oganda) did not oblige employers to give reasons or accord a hearing. The court therefore could not measure the termination against the fairness standards of the Employment Act 2007, which postdated the dismissal.

p. 3
02

Whether the claimant was entitled to damages beyond the notice period

Holding

No further damages were payable as one month's salary in lieu of notice had been paid as provided in the CBA

Reasoning

Both the repealed Employment Act and CBA Clause A5 provided no remedies for unfair termination. Under the common law then applicable, damages were measured by the notice period in the contract. Having received one month's salary in lieu of notice, the claimant's claims for the balance of a putative 19-year term, service pay and general damages all failed.

p. 3
03

Whether aggravated damages were payable

Holding

Aggravated damages refused for want of proof of malice or improper motive

Reasoning

A claimant seeking aggravated damages must prove the employer acted with improper motives going beyond the reasons given for termination. The claimant acknowledged the reason given (loss of customer confidence) was plausible, other employees were terminated at the same time, and no evidence of ulterior motive was adduced.

p. 4

Legal principles established

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  • Under the repealed Employment Act and at common law, where the service contract contains a termination clause, the measure of compensation for unlawful dismissal is the period specified in the termination clause
  • Under the law applicable before the Employment Act 2007, employers were not obliged to give reasons or hear the employee before termination; employment was at the will of the employer

Court orders

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  1. 1.The entire claim is dismissed
  2. 2.Each party shall bear its own costs

Authorities

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Legislation

  • Employment Act, Cap 226 (Repealed)Not specified
  • Employment Act 2007Not specified
  • Collective Agreement / Collective Bargaining AgreementClause 5(d) / Clause A5(a) and (b) / Clause A5(d) / Clause 15(d) / Clause 5(3)

Cases cited (9)

  • Major Wilfred Kyallo Kangullyu vs. Tetra Pak Limited
    [2014] eKLR, Industrial Court of Kenya Cause Number 715 of 2011
  • John vs. MG Limited
    [1996] 1 ALL E.R. 35
  • Kenya Revenue Authority vs. Menginya Salim Murgani
    [2010] eKLR
  • Gitau vs. East African Power & Lighting Company Limited
  • National Bank of Kenya vs. Pipelastic Samkolit (K) Limited & Another
    [2001] eKLR
  • Cyrus Nyaga Kabute vs. Kirinyaga County Council
    [1987] eKLR
  • Godfrey Mwangi Wanjohi vs. Mitchell Cotts Kenya Limited
    [2002] eKLR
  • Kenya Oilfield Services Limited vs. Peter Njoroge
  • Kenya Ports Authority –V- Festus Kipkoriir Kiprotich
    {2014} eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "John Njoroge v National Bank of Kenya Limited [2018] KEELRC 444 (KLR)", Case Analysis (2018). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/444/eng@2018-11-16

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