James Mogaka v KCB Bank Kenya Limited [2021] KEELRC 1389 (KLR)
The bottom line
#KCB could not prove it held a disciplinary hearing, so a Kenyan court ordered the bank to pay a former manager 12 months' salary.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of termination
Termination was unfair because the Respondent failed to prove that a disciplinary hearing took place
Section 41 of the Employment Act guarantees an employee safeguards of a fair hearing before termination. The Respondent asserted it applied its policies and carried out a disciplinary hearing, but produced no minutes or proof of the hearing. Under Section 43 the burden shifts to the employer to show fairness, and failing that evidence the termination is unfair. The Claimant had also refused to sign minutes that were never tendered in evidence.
Substantive fairness / valid reasons for termination
The court found the termination unfair, awarded maximum compensation and reduced the termination to normal termination
The Claimant argued the audit report did not name him, figures of the alleged loss were contradictory, and the reasons in the termination letter differed from the charges. The court did not make extensive findings on substantive reasons but, having found the process unfair, exercised its discretion under Section 49 to award maximum compensation of 12 months' salary computed on his salary at termination.
Remedy of reinstatement
Reinstatement refused due to breakdown of the employment relationship
Although reinstatement is an available remedy, the court held that a lot of bad blood had developed between the parties since the 2018 termination, making reinstatement inappropriate. The court instead awarded maximum compensation, directed that the Claimant continue enjoying preferential loan rates, and allowed offsetting of the compensation against outstanding loans.
Legal principles established
#- Where an employer asserts a disciplinary hearing took place but fails to provide evidence of it, the burden under Section 43 shifts to the employer and the termination is unfair
- Reinstatement is inappropriate where employment relations have irretrievably broken down; maximum compensation under Section 49 may be awarded instead
Court orders
#- 1.The termination of the Claimant's employment be reduced to normal termination
- 2.The Claimant to receive 12 months salary as compensation
- 3.Costs of the suit to the Claimant
- 4.Interest at court rates on the compensation sum from date of judgment till payment in full
- 5.The Claimant to continue enjoying the preferential loan rates until he defaults on loan repayments, and may opt to offset the compensation against his outstanding loans
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Court Act (first-instance employment claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Mogaka v KCB Bank Kenya Limited [2021] KEELRC 1389 (KLR)", Case Analysis (2021). Cause No. E012 of 2019 (Memorandum of Claim dated 29th January 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1389/eng@2021-06-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.