Michael Muriuki Ngari & 9 others v Equity Bank of (Kenya) Limited [2020] KEELRC 1001 (KLR)
The bottom line
#Kenya's Employment Court ruled Equity Bank's dismissals had valid reasons but unfair process, awarding each former employee four months' salary.
What this practically means
#Executive summary
#Key legal issues
#Whether there were valid reasons for termination/dismissal
The Respondent had valid reasons - the 1st Claimant admitted engaging in money lending in breach of Clause 19.9 of the Policy Manual, and the Claimants' accounts received unexplained sums consistent with cash-back fraud; staff are barred from private business
The court found that by admitting he lent money to fellow staff, the 1st Claimant engaged in private business in conflict with his employment contract, breaching Clause 19.23 of the Manual. The Claimants' knowledge of the Manual was established through the 1st Claimant's cross-examination. Bank statements showed unexplained deposits. Under section 43, the employer's genuinely held beliefs constituted valid reasons.
Whether due process was followed before dismissal
The Claimants were not given a fair hearing; the Group Chief Auditor was not called to testify, requested documents were not supplied, and the minutes of the disciplinary hearing were not produced
Although the Claimants attended disciplinary hearings, they requested particulars and documents that were not provided. The Respondent relied on the Group Chief Auditor's report without calling him as a witness. The absence of the minutes of the disciplinary hearing made it impossible to verify the fairness of the process, hence procedural fairness failed.
Whether the Claimants are entitled to the remedies sought
Only partial relief granted - 3 months' salary compensation and 1 month's pay in lieu of notice per Claimant; prayers for reinstatement-type relief, discrimination and defamation damages and retirement-based expectation damages refused
The court applied section 45(2) and found the terminations unfair due to procedural failure, but tempered compensation given some validity in the reasons. It declined the full package of terminal benefits claimed, refused discrimination and defamation damages for want of proof, and followed authority that damages for the unexpired term or until retirement are not awardable under the Employment Act.
Legal principles established
#- An employer must prove both the reason for termination and that fair procedure was followed; failure on either renders termination unfair under section 45(2) of the Employment Act
- Without minutes of a disciplinary hearing, a court cannot conclude that the disciplinary process was fair
- Terms of a staff manual or handbook are incorporated into a contract of employment by a clause requiring obedience to directives issued through them, without needing the employee's signature
Court orders
#- 1.Award of 3 months' salary as compensation for unfair termination to each Claimant except the 10th Claimant
- 2.Award of 1 month's salary in lieu of notice to each Claimant (1st to 9th)
- 3.Costs of the suit to the Claimants plus interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 and the Industrial Court Act over claims of unfair termination and terminal benefits
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Michael Muriuki Ngari & 9 others v Equity Bank of (Kenya) Limited [2020] KEELRC 1001 (KLR)", Case Analysis (2020). Cause No. 1430 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1001/eng@2020-05-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.