Eustace Muchigiri Njuguna v Consolidated Bank of Kenya Limited [2020] KEELRC 939 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Compliance with the employer's own HR Manual (Clause 10.4) on who signs dismissal letters
The Respondent flouted Clause 10.4 by having the Head of Human Resource author the show cause and dismissal letters of an officer instead of the CEO
Clause 10.4 required recommendations to the CEO for approval before action, and termination and dismissal letters for officers to be signed by the Chief Executive, with the Head of HR signing only for unionisable employees. The Claimant was in management, yet the Head of Human Resource authored both letters, and no delegation from the CEO was proved. The court held this position of the Manual was flouted, contributing to the finding of unfairness.
Whether valid and fair reasons for dismissal were established
The minutes of the disciplinary hearing were unclear; it was not established that the allegations were put to the Claimant and his responses recorded, so valid reasons were not proved
The minutes were in prose form and did not clearly show the complaints against the Claimant, whether they were put to him, or his responses. The response to the Masafi overdrawn account issue was not recorded. The investigation report and vouchers were not produced in court, and part of the findings related to another employee (Jeremiah). Coupled with the procedural breach, the court found the dismissal unfair.
Bias in the composition of the disciplinary committee
No objection to the composition was raised at the hearing; the minutes show no such objection, and the claim of bias by Joshua Kaiga was not established
The Claimant testified that Joshua Kaiga, patron of Umoja branch, sat on the committee and was biased. However, the minutes showed no objection raised at the hearing, and the Respondent's witness explained that Kaiga was Head of Treasury dealing with forex, not transfers. The court did not found its decision on this ground but on procedural and substantive unfairness.
Remedies for unfair termination
Six months' salary as compensation plus one month's salary in lieu of notice awarded
Having found the dismissal unfair, the court exercised its discretion under the Employment Act to award six months' gross salary as compensation and one month's salary in lieu of notice, subject to statutory deductions, together with costs and interest. Reinstatement and the declaration of nullity were not granted.
Legal principles established
#- An employer who does not follow its own Human Resource Manual procedure in effecting dismissal undermines the validity of the dismissal.
- An employer must demonstrate valid reasons for dismissal and record that the allegations were put to the employee with his responses, failing which the dismissal is unfair.
Court orders
#- 1.Respondent to pay the Claimant 6 months' salary as compensation for unfair termination (6 x 129,837 = Kshs 779,022/=) subject to statutory deductions
- 2.Respondent to pay the Claimant 1 month's salary in lieu of notice (Kshs 129,837/=), subject to statutory deductions
- 3.Respondent to pay costs of the suit plus interest at court rates with effect from the date of judgment
- Jurisdiction invoked
- Employment Act, Sections 44, 45 and 49 (employment dispute filed by Amended Memorandum of Claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Eustace Muchigiri Njuguna v Consolidated Bank of Kenya Limited [2020] KEELRC 939 (KLR)", Case Analysis (2020). Cause No 1106 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/939/eng@2020-05-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.