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ELRCPartially AllowedNot stated in judgment (Employment and Labour Relations Court claim)· [2021] KEELRC 611 (KLR)

Darius Kiseu Mwamburi v Co-operative Bank of Kenya Ltd [2021] KEELRC 611 (KLR)

Employment and Labour Relations Court
29 October 2021
OKOcharo Kebira
8,104 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~32 min to read original · ~4 min brief

The bottom line

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A Kenyan court found a bank's dismissal of its Voi Branch Manager fair in substance but unfair in procedure, awarding one month's salary plus costs.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank from 3rd February 1992 until 23rd February 2016 and rising to Branch Manager at Voi, challenged the termination of his employment. He alleged the dismissal followed a decision that was unlawful, without justifiable cause and without due process, and sought a declaration that the dismissal was unfair, twelve months' salary as compensation, costs and interest. The Respondent maintained that the Claimant approved loans on accounts less than three months old without the mandatory Head Office ratification required by its Micro Credit Banking Manual, occasioning a loss, and that it followed fair procedure. The Court framed three issues: procedural fairness, substantive fairness, and reliefs. On procedure, it held that fairness does not end at notification and hearing; a disciplinary panel must render a clear, reasoned decision from which the termination letter flows. The disciplinary minutes contained no verdict, and the Respondent issued two conflicting letters of the same date - one placing the Claimant on a Performance Improvement Plan and one terminating his employment. The Court drew an adverse inference from the Respondent's failure to call the Head of Coast Region after alleging his letter was a forgery, and found the termination procedurally unfair under section 45(4)(b) of the Employment Act. On substance, however, the Claimant's admission that he approved loans on accounts under three months old without Head Office ratification constituted a valid and fair reason for dismissal. Declaring the dismissal procedurally unfair but substantively fair, the Court awarded a nominal compensation of one month's gross salary (Kshs. 237,339) under section 49(1)(c), with interest at court rates from filing and costs to the Claimant. Judgment was delivered by Ocharo Kebira, J, virtually at Nairobi on 29th October 2021.

Key legal issues

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01

Procedural fairness of the termination

Holding

The termination was procedurally unfair because the disciplinary panel minutes contained no verdict and the Respondent issued two conflicting letters flowing from the same hearing

Reasoning

Although the Claimant received a show-cause notice, responded, and was heard by a disciplinary panel, the minutes did not disclose any decision. The panel's decision must be traceable to the termination letter, as a decree flows from a judgment. The employer issued a performance improvement plan letter and a termination letter of the same date, evidencing conflicting action and failure to act with justice and equity under section 45(4)(b).

p. 7
02

Substantive fairness of the termination

Holding

The dismissal was substantively fair - the Claimant's approval of loans on accounts less than three months old without Head Office ratification was a valid and fair reason

Reasoning

Under sections 43 and 44(3) of the Employment Act the employer must prove a fundamental breach of contractual obligations. The Claimant, a manager of 24 years' experience, admitted approving loans on accounts under three months old without the mandatory Head Office ratification under the Micro Credit Banking Manual, and the loans occasioned a loss. Applying the contextual approach, the conduct justified dismissal.

p. 10
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Reliefs

Holding

A nominal compensatory award of one month's gross salary under section 49(1)(c), with interest and costs

Reasoning

Compensation under section 49(1)(c) is discretionary and depends on the circumstances of each case. Given that the dismissal was substantively fair and the unfairness resulted from a single procedural mis-step, only a nominal award of one month's gross salary (Kshs. 237,339) was warranted, with interest at court rates and costs.

p. 10

Legal principles established

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  • Procedural fairness under section 41 of the Employment Act extends beyond notification and hearing to a clear and reasoned decision by the disciplinary panel from which the termination letter must flow
  • An employee has a right to a reasoned decision by the disciplinary committee or panel
  • Where an employer alleges a document is a forgery but fails to call the author as a witness, an adverse inference may be drawn
  • A prejudicial act by an employer such as 'overruling' a prior letter entitles the employee to be notified and heard under the Fair Administrative Actions Act and Article 47 of the Constitution
  • Employee misconduct does not inherently justify summary dismissal unless so grave that it indicates abandonment of the employment relationship

Court orders

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  1. 1.A declaration that the dismissal of the Claimant from employment was procedurally unfair
  2. 2.A nominal compensatory award of one month's gross salary - Kshs. 237,339 pursuant to section 49(1)(c) of the Employment Act
  3. 3.Interest on the award at Court rates from the date of filing suit till full payment
  4. 4.Costs to the Claimant

Authorities

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Legislation

  • Employment Actsection 41(1) and (2)
  • Employment Actsection 43
  • Employment Actsection 44(1), (3), (4)
  • Employment Actsection 45
  • Employment Actsection 45(2)(c), 45(4)(a) and (b)
  • Employment Actsection 47(5)
  • Employment Actsection 49(1)(c), 49(4)
  • Employment Act, 2007sections 41-49
  • Fair Administrative Actions Act
  • Constitution of KenyaArticle 47

Cases cited (11)

  • Jacob Kelly Omondi Onyango =vs= National Bank of Kenya
    (2021) eKLR
  • Kenya Revenue Authority =vs= Reuwel Waithaka Gitahi and 2 others
    [2019] eKLR
  • Bamburi Cement Limited =vs= William Kilonzi
    [2016] eKLR
  • Judicial Service Commission =vs= Gladys Boss Shollei
    Civil Appeal No. 50 of 2014
  • Mc Kinley =vs= B. C. Tel.
    (2001) 2 S.C.R. 161
  • Kenya Ports Authority =vs= Fadihl Juma Kisuwa
    [2017] eKLR
  • Lydia Moraa Obara =vs= Tusker Mattresses
    [2021] eKLR
  • Janet Nyandiko =vs= Kenya Commercial Bank Limited
    [2017] eKLR
  • National Bank of Kenya =vs= Anthony Njue John
    [2019] eKLR
  • Prof. Macha Isunde =vs= Lavington Security Guards Limited
    [2017] eKLR
  • Laws =vs= London Chronicle Limited
    [1959] 2 All E.R. 285
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 44, 45, 47(5), 49)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Darius Kiseu Mwamburi v Co-operative Bank of Kenya Ltd [2021] KEELRC 611 (KLR)", Case Analysis (2021). Not stated in judgment (Employment and Labour Relations Court claim). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/611/eng@2021-10-29

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