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ELRCDismissedCause No. 1376 of 2015· [2020] KEELRC 732 (KLR)

Paul Otieno Okeyo v Consolidated Bank of Kenya Limited [2020] KEELRC 732 (KLR)

Employment and Labour Relations Court of Kenya at Nairobi
16 July 2020
OMOnesmus N. Makau
4,027 words in judgment
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The bottom line

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Kenya's Employment Court upheld a banker's dismissal for breaching bank policies, confirming that documented policy violations plus a fair hearing make termination lawful.

What this practically means

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Executive summary

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The claimant, formerly Branch Operations Manager at the respondent's Embakasi Branch, sued on 7 August 2015 alleging unfair and unlawful summary dismissal on 23 August 2013 following transactions in the account of Horizon Media Investments, including a suspected fraudulent RTGS of about Kshs. 4,162,000. He sought 12 months' salary as compensation, damages for loss of career, service pay, one month's pay in lieu of notice, reinstatement in the alternative, an apology and recommendation letter, and costs. The respondent maintained the dismissal was for gross misconduct, specifically breaches of bank policies on KYC, credit and operations, and that the claimant was accorded a hearing. The court framed two issues: whether the dismissal was unfair and unlawful, and whether the claimant was entitled to the reliefs sought. Applying sections 45, 41 and 44(4)(c) of the Employment Act, the court found the respondent proved valid and fair reasons on a balance of probability, relying on the claimant's unequivocal admissions of breaching bank procedures, including authorising payments against uncleared effects and against insufficient funds without approval, and failing to charge commission. On procedure, the disciplinary hearing minutes, produced without objection, showed the claimant was given an opportunity to be heard, satisfying section 41. The dismissal was therefore held fair and lawful. All reliefs were refused: compensation and reinstatement because the dismissal was lawful; notice pay for the same reason; service pay because the claimant was a beneficiary of a pension scheme under section 35(6); and the apology for lack of merit or legal basis. The suit was dismissed with no costs, the court considering that the claimant had not secured alternative employment. Judgment was delivered on 16 July 2020 by Onesmus N. Makau, Judge.

Key legal issues

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01

Whether there was a valid and fair reason for summary dismissal

Holding

The employer proved valid and fair reason on a balance of probability, being breach of bank policies and procedures

Reasoning

The claimant admitted failure to comply with express bank policies and procedures relating to KYC, credit and operations, including authorising payments against uncleared effects and without approval, and paying against insufficient funds. Section 44(4)(c) permits summary dismissal for carelessly and improperly performing duties. The court found the respondent proved valid reason on a balance of probability.

p. 4
02

Whether a fair procedure was followed before dismissal

Holding

The claimant was accorded a fair hearing before the disciplinary panel and procedure under section 41 was satisfied

Reasoning

The claimant was invited to a disciplinary hearing on the charge of the fraudulent RTGS, other charges from the Branch Manager's memo were raised, and the minutes show he was given a chance to present his defence. The minutes were produced without objection. The committee found gross misconduct and recommended summary dismissal.

p. 5
03

Entitlement to reliefs

Holding

None of the reliefs sought was granted as the dismissal was fair and lawful

Reasoning

Having found the dismissal fair and lawful under section 45 of the Employment Act, the court declined compensatory damages, reinstatement, notice pay and apology. Service pay was refused because the claimant was a member of a pension scheme under section 35(6).

p. 5

Legal principles established

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  • Termination is unfair where the employer fails to prove both valid and fair reason and fair procedure
  • An employee who benefits from a pension scheme cannot claim service pay

Court orders

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  1. 1.The suit is dismissed with no costs.

Authorities

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Legislation

  • Employment Actsection 45(2)
  • Employment Actsection 41
  • Employment Actsection 44(4)(c) and (e)
  • Employment Actsection 35(6)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Cause No. 1376 of 2015)

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, "Paul Otieno Okeyo v Consolidated Bank of Kenya Limited [2020] KEELRC 732 (KLR)", Case Analysis (2020). Cause No. 1376 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/732/eng@2020-07-16

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