Joseph Oduor Otieno v National Bank of Kenya Limited [2019] KEELRC 1483 (KLR)
The bottom line
#A Kenyan bank employee fired over alleged fraud won Kshs. 931,086 because his employer couldn't prove the fraud or hold a fair disciplinary hearing.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent had a valid reason to terminate the Claimant
The Respondent did not prove the alleged fraud or the Claimant's link to the loss of Kshs. 2,819,994, hence no valid reason existed.
The termination letter cited loss of confidence over fraud causing a loss of Kshs. 2,819,994. The suspension letter did not specify the alleged fraud or who mentioned the Claimant. Section 43 obliges the employer to prove the reasons for termination. The Respondent failed to prove the fraud or the Claimant's participation, so the termination lacked a valid reason.
Whether due process under Section 41 of the Employment Act was followed
No fair hearing was accorded; the minutes did not show the Claimant attended or was invited to a disciplinary hearing.
The Respondent relied on minutes of a meeting of 23/10/2015, but the minutes named other staff as the subject of discussion and did not show the Claimant attended or defended himself. There was no letter inviting the Claimant to a hearing. Section 41 requires explanation of the reasons, hearing of representations and the right to a representative. The Claimant was therefore denied a fair hearing.
Whether the termination was unfair under Section 45 of the Employment Act
The termination was unfair and unjustified, failing both the valid-reason and fair-procedure limbs of Section 45(2).
Section 45(2) renders a termination unfair if the employer fails to prove a valid and fair reason and a fair procedure. Having found neither valid reason nor due process, the court concluded the termination was unfair and unjustified, entitling the Claimant to remedies.
Remedies for the unfair termination
The court awarded 8 months' salary as compensation and one month's salary in lieu of notice, plus a Certificate of Service, but declined general damages and leave pay.
Exercising discretion under Section 49 of the Employment Act framework, the court awarded 8 months' salary (8 x 103,454 = 827,632) plus one month's notice pay (103,454), totalling Kshs. 931,086, and directed issuance of a Certificate of Service. No general damages for constitutional violations or accrued leave pay were granted.
Legal principles established
#- Under Section 43 of the Employment Act the employer bears the burden of proving the reason or reasons for termination, failing which the termination is unfair.
- Section 41 of the Employment Act requires notice of a disciplinary hearing, explanation of the reasons, and an opportunity to be heard and call witnesses before termination on grounds of misconduct.
- Minutes relied on to prove a disciplinary hearing must show the charges against the employee and the employee's responses, and evidence that the employee attended.
Court orders
#- 1.The Respondent to pay the Claimant compensation of 8 months' salary for the unfair termination (8 x 103,454 = 827,632)
- 2.The Respondent to pay the Claimant one month's salary in lieu of notice (103,454)
- 3.Total award of Kshs. 931,086/= to the Claimant
- 4.The Respondent to issue the Claimant with a Certificate of Service
- 5.The Respondent to pay costs of the suit plus interest at Court rates with effect from the date of the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court Act, 2011 (including Section 12(3)(vii) on reinstatement) read with the Employment Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joseph Oduor Otieno v National Bank of Kenya Limited [2019] KEELRC 1483 (KLR)", Case Analysis (2019). Cause No 895 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1483/eng@2019-05-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.