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ELRCDismissedNot stated in the judgment· [2020] KEELRC 1178 (KLR)

James Odhiambo Kaye v National Bank of Kenya Limited [2020] KEELRC 1178 (KLR)

Employment and Labour Relations Court
29 April 2020
OMONESMUS N MAKAU
2,569 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan bank lawfully dismissed a teller who paid money to a fraudster, because the bank proved both a valid reason and a fair process.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from 2011 and promoted to teller in November 2014, was summarily dismissed on 4 August 2015 on the ground of gross negligence resulting in a loss of Kshs. 250,000. He sued seeking a declaration that the dismissal was unjustified and unlawful, reinstatement, damages, overtime pay, a certificate of service and costs. He testified that he paid Kshs. 250,000 on 18 March 2015 and Kshs. 280,000 on 19 March 2015 to a customer who turned out to be a fraudster, but only after verifying identity documents and on the strength of a withdrawal voucher already approved by the Branch Operations Manager. The respondent's Employee Relations Advisor testified that a voucher for an amount within the teller's authority should never arrive pre-approved, and that the teller, as the bank's first point of contact, ought to have consulted the Operations Manager. The court framed three issues: validity of the reason, fairness of the procedure, and entitlement to reliefs. It held that a reasonable teller would have questioned the abnormal pre-approved voucher before paying, and that the respondent proved gross negligence on a balance of probability under section 44(4)(c) of the Employment Act and Clause 7.2.1 of the HR Manual, satisfying section 43. On procedure, the claimant's own admissions - a written statement, written explanations, and an oral hearing before a five-member panel - established compliance with section 41. Only the certificate of service was granted; the declaration, reinstatement, damages and overtime were all declined.

Key legal issues

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01

Validity of the reason for dismissal

Holding

The reason - gross negligence causing loss of Kshs. 250,000 - was valid and proved on a balance of probability

Reasoning

The claimant admitted paying Kshs. 250,000 and 280,000 to a fraudster on 18 and 19 March 2015. A pre-approved voucher for an amount within the teller's own authority was abnormal; a reasonable teller would have consulted the Branch Operations Manager before payment. His failure to do so amounted to willful and careless performance of duty under section 44(4)(c) and Clause 7.2.1(viii) of the HR Manual.

p. 3
02

Procedural fairness of the dismissal

Holding

A fair procedure under section 41 was followed

Reasoning

The claimant admitted being given a suspension letter requiring a written statement, being asked to give written explanations to the legal department, and being accorded an oral hearing before a panel of five committee members before the termination letter. Those admissions established compliance with the mandatory procedure under section 41.

p. 4
03

Entitlement to reliefs

Holding

Only the certificate of service was granted; all other reliefs failed

Reasoning

Since the termination was lawful and procedurally fair, the declaration, reinstatement and damages could not issue. The overtime claim failed for want of proof - no evidence that he was required to work or actually worked extra hours - while the certificate of service is an entitlement upon separation.

p. 4

Legal principles established

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  • A reasonable employee must verify anomalous transactions with the approving authority before acting; relying on an irregular pre-approved voucher without consultation constitutes gross negligence justifying summary dismissal under section 44(4)(c) of the Employment Act.
  • Section 41 of the Employment Act requires an employer to explain the reason for termination and accord the employee an opportunity to be heard before dismissal for misconduct.

Court orders

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  1. 1.Prayer for certificate of service granted
  2. 2.Claimant to be issued with certificate of service
  3. 3.All other reliefs (declaration of unfair dismissal, reinstatement, damages, overtime, costs) declined and suit otherwise dismissed

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 44(4)(c)
  • Employment Actsection 45
  • Respondent's Human Resource ManualClause 7.2.1(viii)

Cases cited (5)

  • Gilbert Mariera Makori vs Equity Bank Limited
    [2016] eKLR
  • Standard Group Limited v Jenny Luesby
    [2018] eKLR
  • Mutua Musau vs Barclays Bank of Kenya Ltd
    [2016] eKLR
  • Julius Arisi & 90 Others v Research International East Africa
    [2019] eKLR
  • Frank N. Kamau vs Tusker Mattresses Ltd
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act

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, "James Odhiambo Kaye v National Bank of Kenya Limited [2020] KEELRC 1178 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/1178/eng@2020-04-29

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