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ELRCPartially AllowedNot stated in the excerpt provided· [2020] KEELRC 784 (KLR)

Edwin Kibet Kipyegomen v Kenya Post Office Savings Bank [2020] KEELRC 784 (KLR)

Employment and Labour Relations Court
29 June 2020
JRJames Rika
2,707 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan bank lawfully dismissed an employee over CCTV-identified fraud, but still paid damages because it mishandled the disciplinary process.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent Bank from 2000 and last serving as Cashier/Customer Relations Officer at the Mombasa Moi Avenue Branch, was summarily dismissed on 22nd April 2016 on the allegation that on 9th October 2015 he used a colleague's (Purity Mbusya's) computer credentials to fraudulently transfer Kshs. 40,000 from a customer's account to the account of one Moses Cheptoo. He sued for notice pay, salary for days worked, annual leave, anticipatory salary of Kshs. 22.8 million for 22 remaining years, 12 months' compensation for unfair termination, and a declaration that termination was unfair, totalling Kshs. 24,139,013. The Respondent maintained the dismissal was for a valid reason and followed a fair process. The Court viewed CCTV footage showing the Claimant occupying Mbusya's unattended desk at the precise moment the fraudulent transfer occurred, and noted Cheptoo was his village-mate. Applying Section 43 of the Employment Act, the Court held the Respondent genuinely believed the Claimant was behind the fraud, so there was valid reason; password exclusivity and missing Transaction Reports were non-issues at the civil stage. However, procedure was flawed: the Respondent failed to produce disciplinary minutes proving Trade Union (BIFU) participation as required by Section 41, and the appeal handling was unclear. The Court awarded 15 days' salary (Kshs. 43,361) as compensation for procedural unfairness plus Kshs. 70,045 for 21 days worked in April 2016, total Kshs. 113,406. Claims for leave pay, 12 months' compensation and anticipatory salary were declined. The Claimant was ordered to pay the Respondent's costs. Judgment delivered at Chaka, Nyeri County on 29th June 2020 by James Rika, Judge.

Key legal issues

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01

Validity of the reason for termination

Holding

There was valid reason - the Claimant was captured on CCTV at the colleague's desk at the precise moment of the fraudulent transfer

Reasoning

CCTV footage showed the Claimant occupying Purity Mbusya's unattended workstation at the exact time Kshs. 40,000 moved from Riziki's account to Cheptoo's account. The beneficiary was the Claimant's village-mate. Section 43(2) asks only whether the employer genuinely believed the reason existed at termination; questions of password exclusivity and missing Transaction Reports are non-issues, capable only of creating doubt in a criminal trial, not of defeating the employer's genuine belief.

p. 3
02

Fairness of the procedure

Holding

Procedure was flawed: the Trade Union was not involved and the appeal process was unclear

Reasoning

The Respondent did not avail the minutes of the disciplinary hearing to the Court, making it impossible to find that BIFU representatives participated as required by Section 41 of the Employment Act. The handling of the Claimant's appeal was also not clear from the record. These were the two identifiable procedural flaws justifying modest compensation despite a valid reason for dismissal.

p. 4
03

Remedies

Holding

Compensation limited to 15 days' salary plus salary for 21 days worked in April 2016; other prayers declined

Reasoning

Because procedure was imperfect though the reason valid, the Court granted compensation equivalent to 15 days' salary. Salary for 21 days worked in April 2016 was unpaid and awarded. The annual leave claim failed for want of evidence, the 12 months' compensation was unnecessary given valid grounds, and anticipatory salary of Kshs. 22.8 million was misconceived and would unjustly enrich the Claimant.

p. 4

Legal principles established

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  • Under Section 43(2) of the Employment Act, the reason for termination is a matter the Employer genuinely believed to exist at the time of termination
  • Procedural irregularities in a dismissal grounded on a valid reason attract only minimal compensation
  • Section 41 of the Employment Act entitles an employee to have a fellow employee or shop floor union representative present during a disciplinary hearing

Court orders

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  1. 1.Declaration implicit in the ruling that termination was based on valid reason but minimally flawed on procedure
  2. 2.The Respondent shall pay the Claimant compensation for unfair termination equivalent of 15 days' salary at Kshs. 43,361
  3. 3.The Respondent shall pay the Claimant salary for 21 days worked in April 2016 at Kshs. 70,045
  4. 4.Total award of Kshs. 113,406 payable by the Respondent to the Claimant
  5. 5.Costs of the Claim shall be paid by the Claimant to the Respondent

Authorities

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Legislation

  • Employment ActSection 43 (including subsection 2)
  • Employment ActSection 41
  • Employment and Labour Relations Court (Procedure) Rules, 2016Rule 38
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (Section 41 and Section 43 applied); E&LRC (Procedure) Rules, 2016

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, "Edwin Kibet Kipyegomen v Kenya Post Office Savings Bank [2020] KEELRC 784 (KLR)", Case Analysis (2020). Not stated in the excerpt provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/784/eng@2020-06-29

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