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ELRCDismissedCase No ELRCC/36/2020· [2021] KEELRC 2389 (KLR)

Kipchirchir Norman Kemboi v National Bank of Kenya Limited [2021] KEELRC 2389 (KLR)

Employment and Labour Relations Court
24 September 2021
JAJ. N. Abuodha
1,480 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court upheld an employee's dismissal for fraud, confirming employers need not issue a show cause letter before suspension and employees bear the burden of proving unfairness.

What this practically means

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Executive summary

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The Claimant, a data analyst employed by a bank (initially on contract from 15th July 2015 and later on permanent and pensionable terms from 10th March 2016), sued for unfair and unlawful termination. While on annual leave on 1st September 2018 he was arrested, suspended by letter dated 3rd September 2018 over a fraudulent transaction involving modification of a salaries account in favour of Mr. Peterson Nyakundi and others in which the bank allegedly lost about Kshs. 7.3 million, his personal account having received money from Nyakundi. He was invited to a disciplinary hearing, terminated, and his appeal was disallowed. He complained of the absence of a show cause letter before suspension and before termination. The respondent admitted parts of the claim, explained that the transaction monitoring department had flagged Nyakundi's account for suspect credits, that the Claimant was adversely mentioned in investigations and linked to a former employee facing conspiracy to defraud charges, and maintained that due process was followed, including an appeal. The Court held that under section 47(5) of the Employment Act the employer bears the burden of proving reasons for termination while the employee bears the burden of proving unfairness. It found the Claimant knew the charges and was heard, that no show cause letter is required before suspension, and that alerting a suspected fraudster would defeat discrete investigations. Valid reasons having been established, the claim was dismissed with costs.

Key legal issues

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01

Whether the Claimant was afforded a fair hearing before termination

Holding

The Court found the Claimant was aware of the charges and was heard; the disciplinary and appeal hearings satisfied natural justice.

Reasoning

The suspension letter and the invitation to the disciplinary hearing of 12th September 2018 set out the same charges, informed the Claimant of his right to be accompanied by a colleague, and he was heard and later heard on appeal. The Court was therefore not persuaded that the Claimant was unaware of the charges or denied a defence.

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02

Whether a show cause letter is required before suspension

Holding

No; suspension is a preliminary stage and need not be preceded by a show cause letter.

Reasoning

The Court reasoned that suspension is preliminary to any allegation against an employee, evidence at that stage may justify suspension without being conclusive, and alerting a suspected fraudster at the preliminary stage would defeat the purpose of investigations, which are discrete and swift.

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03

Whether valid reasons existed for the termination

Holding

Yes; the employer discharged its burden of proving valid reasons.

Reasoning

Investigations flagged the Peterson Nyakundi account for suspect credits, and the Claimant's account was credited with sums from Nyakundi while he worked in cahoots with a former employee facing conspiracy to defraud charges. The Claimant failed to show the termination was unfair or wrongful.

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Legal principles established

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  • There is no obligation on an employer to issue a show cause letter before suspending an employee
  • Under section 47(5) of the Employment Act the burden of proving reasons for termination rests on the employer, while the burden of proving unfair termination rests on the employee

Court orders

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  1. 1.The claim is found without merit and dismissed with costs

Authorities

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Legislation

  • Employment Actsection 47(5)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act, section 47(5) applied)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Kipchirchir Norman Kemboi v National Bank of Kenya Limited [2021] KEELRC 2389 (KLR)", Case Analysis (2021). Case No ELRCC/36/2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/2389/eng@2021-12-01

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