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ELRCPartially AllowedCause 864 of 2014· [2019] KEELRC 1231 (KLR)

Banking Insurance and Finance Union (K) v Co-operative Bank of Kenya Limited [2019] KEELRC 1231 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
28 June 2019
2,045 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court found Co-operative Bank unfairly dismissed a teller who followed her manager's instructions, awarding her eleven months' salary even though the disciplinary procedure itself was fair.

What this practically means

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Executive summary

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The claimant union sued on behalf of its grievant, Ms Jackie Wanjiku Chege, a graduate clerk and later executive teller employed by the respondent bank from 17 January 2011, who was dismissed on 28 June 2013 following an irregular debit of a customer's account of Kshs 1,000,000. The union contended the grievant was denied union representation at the disciplinary process contrary to section 41(1) of the Employment Act. The respondent maintained the grievant breached the Operations Manual for Tellers by debiting the account without the customer's express written authorization and failing to reverse the transaction. The court heard the grievant and two of the respondent's witnesses, including the Investigations Manager who conceded the Branch Manager had instructed the debit and never denied doing so, and that the money was kept safely in the vault and collected by the customer the next day without complaint. The court found the procedure followed - show cause letter, response, and disciplinary hearing attended with a colleague - was fair. However, it found no valid reason for the termination: the transaction was carried out on the Branch Manager's instructions, the respondent failed to demonstrate any breach of the Operations Manual or risk of loss, and no impropriety was alleged. The termination was held harsh, unreasonable and unfair. The court awarded one month's salary in lieu of notice (Kshs 70,044) and ten months' salary as compensation (Kshs 700,440), with interest at court rates from the date of judgment subject to taxes and statutory deductions. Judgment dated and delivered at Nairobi on 28 June 2019.

Key legal issues

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01

Procedural fairness of the termination

Holding

The procedure followed was fair: the grievant was issued a show cause letter, responded to it, and attended a disciplinary hearing accompanied by a colleague.

Reasoning

The court noted that termination is a normal stage in employment and courts will not second-guess it if done for good reasons, with procedure in accordance with law, HR procedures and natural justice. The grievant received a show cause letter, responded, and was heard by the disciplinary committee with a colleague present, satisfying the Employment Act principles.

p. 2
02

Valid reason for termination

Holding

No valid reason existed; the debit was made on the Branch Manager's instructions relayed from the customer, the money was kept safely in the vault, the customer collected it without complaint, and no breach of the Operations Manual or risk of loss was demonstrated.

Reasoning

The respondent's witnesses did not demonstrate in what way the grievant breached the Operations Manual, and conceded she would have been guilty of insubordination had she disobeyed. The manager's letter corroborated her account; the customer collected the money the next day without complaint; the vault was conceded to be safe; and no impropriety was alleged against her.

p. 2

Legal principles established

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  • A termination may follow a fair procedure yet be unfair for want of a valid reason; where the employee acted on instructions from her manager and no loss or impropriety is shown, there is no valid reason for termination.

Court orders

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  1. 1.Judgment entered in favour of the grievant against the respondent
  2. 2.One month's salary in lieu of notice of Kshs 70,044
  3. 3.Ten months' salary as compensation for unfair termination of Kshs 700,440
  4. 4.Items (a) and (b) to attract interest at court rates from date of judgment but subject to taxes and statutory deductions

Authorities

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Legislation

  • Employment Actsection 41(1)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (section 41(1) pleaded)

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, "Banking Insurance and Finance Union (K) v Co-operative Bank of Kenya Limited [2019] KEELRC 1231 (KLR)", Case Analysis (2019). Cause 864 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1231/eng@2019-06-28

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