Banking Insurance Finance Union (K) v Co-operative Bank of Kenya Ltd [2019] KEELRC 2350 (KLR)
The bottom line
#A Kenyan bank lawfully dismissed a loans officer for lending money to a customer at high interest, because the dismissal followed proper legal procedure.
What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent had valid and justifiable reason to summarily dismiss the grievant
Yes — the grievant engaged in lending money to a bank customer at almost 50% interest without consent, contrary to his terms of employment and the Business Code of Conduct and Ethics
The grievant's letter of appointment strictly prohibited borrowing and lending of money without the Managing Director's written consent. As a loans officer marketing the bank's loan products, lending money to a customer at high interest during working hours using the bank's facilities posed a serious conflict of interest. The court found the Respondent proved its reason for termination.
Whether the Respondent accorded the grievant due process under section 41 of the Employment Act and Clause A5 of the CBA
Yes — the grievant was issued a show cause letter, responded, was heard at a disciplinary hearing accompanied by a colleague of his choice, and his appeal was considered
Section 41 requires an employer to explain the reasons for termination and to hear and consider the employee's representations. The Respondent issued a show cause letter, found the response unsatisfactory, convened a disciplinary hearing at which the grievant was accompanied by a unionisable member of staff, and dismissed him after considering his case. His appeal was also declined on its merits.
Whether the grievant is entitled to reinstatement, compensation, notice pay or terminal dues
No — having found the dismissal fair and lawful, none of the reliefs sought are available
Reinstatement is not available where the dismissal was lawful and fair. Terminal dues were paid upon dismissal, and compensation and pay in lieu of notice are remedies for unfair termination. The Respondent also averred that breach of trust made reinstatement impractical.
Legal principles established
#- An employee engaged in a fiduciary position based on trust and good faith breaches his employment terms by lending money to a customer without written consent, creating a conflict of interest that constitutes valid reason for summary dismissal
- Compliance with section 41 of the Employment Act — show cause letter, response, disciplinary hearing with an accompaniment of the employee's choice, and appeal — constitutes a fair hearing and due process
Court orders
#- 1.The claim is dismissed
- 2.Each party shall bear its own costs
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over the referenced dispute following a certificate of unresolved dispute
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Banking Insurance Finance Union (K) v Co-operative Bank of Kenya Ltd [2019] KEELRC 2350 (KLR)", Case Analysis (2019). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/2350/eng@2019-02-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.