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ELRCDismissedCause No 38 of 2017· [2022] KEELRC 504 (KLR)

Allan Karare v Barclays Bank of Kenya Limited [2022] KEELRC 504 (KLR)

Employment and Labour Relations Court
11 March 2022
SRStella Rutto
3,640 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court upheld Barclays' dismissal of an employee who ran a side business, confirming employers can fire for conflict-of-interest breaches done fairly.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from 2007 and rising to customer adviser, was arrested by the Banking Fraud Investigations Unit at Jamii Bora Bank in August 2014, suspended on 1 September 2014, and terminated on 2 October 2014 for financial misconduct of borrowing from another financial institution and putting the bank's name into disrepute. He sued for a declaration that the termination was unlawful, terminal benefits, general damages, an order to recall an adverse Credit Reference Bureau listing, costs and interest. The respondent defended the termination as lawful and contractually grounded. The court framed three questions: justifiable reason, fair hearing, and entitlement to reliefs. On reason, evaluating emails, a UN visitors' pass, UN supplier registration naming the claimant under JIMCO Office Suppliers, and the Jamii Bora Bank offer letter for Kshs 8 million, alongside the claimant's own six-page handwritten statement, the court found the claimant was the central figure in a private tender venture using his official email, breaching his contract's exclusivity clause and exposing the bank to disrepute in a fraudulent transaction. On procedure, the court found compliance with section 41 of the Employment Act: notice of allegations, opportunity to respond in writing, a properly constituted disciplinary hearing with the option of accompaniment (which the claimant waived), an appeal, and an invitation to request documents. The court held the termination was for valid and fair reasons reached through a fair process, dismissed the claim in its entirety, and made no orders as to costs.

Key legal issues

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01

Whether the respondent had justifiable reason to terminate the claimant's employment

Holding

Yes. The evidence, including the claimant's own handwritten statement, established that he engaged in a private business venture involving JIMCO Office Suppliers, the UN and Jamii Bora Bank, using his official email, breaching the exclusivity clause and bringing the bank into disrepute.

Reasoning

Under sections 43 and 45(2)(a) and (b) of the Employment Act, the employer must prove valid and fair reasons. Documentary evidence - emails, visitor's pass, supplier registration and the Jamii Bora offer letter - plus the claimant's own six-page admission showed he was the central figure in the transaction. This contravened the exclusivity clause of his contract and dragged the respondent's name into a fraudulent scheme.

p. 4
02

Whether the claimant was accorded a fair hearing prior to termination

Holding

Yes. The respondent complied with section 41 of the Employment Act.

Reasoning

The claimant was notified of the allegations by the suspension letter, given an opportunity to tender a written explanation, invited to a disciplinary hearing with notice of date, venue, panel and his right to accompaniment, and given a right of appeal. He was also invited to request documents and witnesses; he never demonstrated he requested information that was withheld.

p. 5
03

Whether the claimant is entitled to the reliefs sought

Holding

No. The claim was dismissed in its entirety with no orders as to costs.

Reasoning

Having found valid reason and fair procedure, the termination was neither unfair nor unlawful, so none of the declaratory, pecuniary or discretionary reliefs sought could issue.

p. 5

Legal principles established

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  • Under section 43(1) of the Employment Act, the employer bears the burden of proving the reasons for termination, failing which the termination is unfair
  • An employee's own admission in a written statement can constitute valid and fair grounds for termination where it shows breach of the employment contract and disrepute to the employer
  • Compliance with section 41 of the Employment Act includes notifying the employee of the allegations, giving an opportunity to respond, and offering access to documents and witnesses relevant to the investigation

Court orders

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  1. 1.The claim is dismissed in its entirety
  2. 2.No orders as to costs

Authorities

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Legislation

  • Employment ActSection 45(2)
  • Employment ActSection 43(1) and (2)
  • Employment ActSection 41(1)
  • Employment ActSection 45(2)(a), (b) and (c)
  • Civil Procedure RulesOrder 21 Rule 1
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B

Cases cited (3)

  • Pamela Nelima Lutta vs Mumias Sugar Co. Ltd
    (2017) eKLR
  • Janeth Chepkemoi Machira & another vs Laikipia University
    (2021) eKLR
  • Abraham Nyambane Asiago vs Barclays Bank of Kenya Limited
    (2019) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under Article 162(2) of the Constitution (employment and labour relations dispute; court not expressly stated in judgment)

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, "Allan Karare v Barclays Bank of Kenya Limited [2022] KEELRC 504 (KLR)", Case Analysis (2022). Cause No 38 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/504/eng@2022-03-11

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