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ELRCPartially AllowedCause No 2093 of 2015· [2020] KEELRC 701 (KLR)

Hellen Mbela Ouko v Kenya Post Office Savings Bank [2020] KEELRC 701 (KLR)

Employment and Labour Relations Court
17 July 2020
3,190 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court upheld a bank manager's dismissal for failing to check transactions, awarding only her unpaid dues and certificate of service.

What this practically means

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Executive summary

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The Claimant, formerly the Respondent bank's Branch Manager at Kenyatta Avenue Branch, was dismissed with effect from 10 February 2014 after fraudulent Pata cash activations on two customer accounts resulted in losses of about Kshs.2,132,900. She was accused of failing to exercise due diligence as a checker and of allowing a sales executive to perform the duties of the Customer Relations Officer, who was on annual leave. She sought a declaration that the dismissal was null and void, reinstatement, or alternatively various monetary reliefs including compensation, notice pay, leave dues and general damages. The Respondent maintained that the dismissal was lawful, for valid reasons and followed fair procedure under the Employment Act. The court, Maureen Onyango J, framed two issues: whether the termination was lawful and justified, and whether the Claimant was entitled to the reliefs sought. The court found a valid reason for dismissal - the Claimant, as the overall authority at the branch, ought to have verified details before approving the Pata cash registrations even absent guidelines, and ought not to have left the CRO desk to a sales executive without system access. Procedure under section 41 of the Employment Act was complied with, though the internal appeal was not handled per the respondent's manual. The dismissal was therefore lawful. Only unpaid earned dues were awarded: salary for 10 days worked in February 2014 (Kshs.56,210.95), leave travel allowance (Kshs.14,230), and 26 untaken leave days (Kshs.168,639.90), totalling Kshs.239,080.85. Reinstatement, compensation, notice pay, general damages and lost income claims all failed. The Respondent was ordered to issue a certificate of service under section 51(2), pay the Claimant's costs, with interest at court rates from the date of judgment. Judgment delivered at Nairobi on 17 July 2020.

Key legal issues

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01

Validity of the reason for termination

Holding

The Respondent proved a valid reason: the Claimant failed to exercise due diligence in approving Pata cash activations and allowed a sales executive without DMS access to stand in for the CRO

Reasoning

The show cause letter cited failure of due diligence and allowing a sales executive to perform CRO duties. The Claimant admitted appointing the sales executive and failing to verify details in the application forms, presuming the cashier had done her job. Clause 6.1.1.4 of the HR Manual treats failure to perform work carefully as misconduct, and section 44(4) of the Employment Act makes wilful neglect a justifiable ground for summary dismissal.

p. 4
02

Fairness of the procedure adopted

Holding

Procedure under section 41 of the Employment Act was complied with, though the appeal was not handled in accordance with the respondent's manual

Reasoning

The Claimant was issued a show cause letter, responded to it, was interdicted and subjected to a disciplinary hearing before dismissal, satisfying section 41. However, the court found the internal appeal was not concluded in accordance with the respondent's manual, though this did not render the dismissal unfair in the circumstances.

p. 4
03

Entitlement to reliefs

Holding

Only unpaid earned dues (10 days' salary, leave travel allowance, untaken leave) and a certificate of service were awarded; all other heads failed

Reasoning

Because the dismissal was lawful and fair, declaratory relief, reinstatement, notice pay, compensation and general damages failed. Where the Respondent adduced no evidence to controvert unpaid earned dues, those were awarded as prayed. The certificate of service was ordered under section 51(2) of the Employment Act.

p. 5

Legal principles established

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  • Termination is unfair under section 45(2) of the Employment Act unless the employer proves both a valid reason and a fair procedure
  • Wilful neglect or careless and improper performance of one's contractual duties is a justifiable ground for summary dismissal under section 44(4) of the Employment Act
  • An employee in overall authority at a branch must verify details before approving transactions even in the absence of guidelines
  • Reinstatement is only available within three years of termination

Court orders

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  1. 1.Judgment entered for the claimant against the respondent in the sum of Kshs.239,080.85
  2. 2.Leave travel allowance awarded as prayed in the sum of Kshs.14,230
  3. 3.Salary for the 10 days worked in February 2014 awarded in the sum of Kshs.56,210.95
  4. 4.26 untaken annual leave days awarded in the sum of Kshs.168,639.90
  5. 5.Respondent directed to issue the Claimant with a certificate of service in line with Section 51(2) of the Employment Act
  6. 6.Respondent to pay the claimant's costs
  7. 7.Interest to accrue at court rates from the date of judgment

Authorities

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Legislation

  • Employment ActSection 45(1) and (2)
  • Employment ActSection 41
  • Employment ActSection 44(4)
  • Employment ActSection 51(2)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1

Cases cited (4)

  • Frederick Were v MK Jeffrey's Hauliers
    [2013] eKLR
  • Michael Aloyo Ulage v Gitonga Stanley
    [2013] eKLR
  • Bett Francis Barngetuny & Another v Teachers Service Commission & Another
    [2015] eKLR
  • Bamburi Cement Limited v Farid Aboud Mohammed
    [2016] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Articles 159(2)(d) and 48 of the Constitution referenced on mode of delivery)

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, "Hellen Mbela Ouko v Kenya Post Office Savings Bank [2020] KEELRC 701 (KLR)", Case Analysis (2020). Cause No 2093 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/701/eng@2020-07-17

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