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ELRCPartially AllowedNot stated in the judgment as provided· [2022] KEELRC 1113 (KLR)

Chumbe v National Bank of Kenya Limited (Cause 1791 of 2016) [2022] KEELRC 1113 (KLR)

Employment and Labour Relations Court
28 April 2022
SRStella Rutto
3,171 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan bank followed fair dismissal procedure, but lost because it could not actually prove the misconduct allegations in court.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from July 7, 2014 and confirmed as Head, Medium Business on March 1, 2016, was issued a show cause letter on May 26, 2016 alleging gross misconduct and misrepresentation of financial information, and was summarily dismissed on June 22, 2016 following a disciplinary hearing. He challenged the termination as procedurally unfair and substantively unjustified, seeking declarations, constitutional damages, reinstatement or alternatively a certificate of service, 12 months' salary under section 49 of the Employment Act, interest, and costs. The respondent maintained the dismissal was lawful, grounded on reckless lending contrary to its policies and prudential guidelines, and that due process was followed. The respondent filed a witness statement but called no oral evidence. The court framed two issues: whether the termination was unfair and unlawful, and entitlement to reliefs. On substance, the court found the respondent failed to prove the reasons for dismissal: it did not produce its policies, the Deloitte and Touché investigation report, the audited accounts or the Business and Loan Restructure and Extension Flow, and its witness did not testify, leaving its case untested by cross-examination. Procedurally, however, the court found section 41 of the Employment Act was satisfied - the claimant was notified, supplied with requested information, and heard. The termination was thus declared unfair and unlawful on substantive grounds. The court awarded six months' gross salary (Kshs 2,700,000) as compensatory damages with interest, a certificate of service, and costs of the suit. Broader constitutional and reinstatement reliefs were not granted.

Key legal issues

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01

Substantive justification for termination

Holding

The respondent failed to prove the reasons for dismissal; termination was substantively unjustified

Reasoning

The respondent did not produce its policies, prudential guidelines, the Deloitte and Touché investigation report, the audited accounts or the Business and Loan Restructure and Extension Flow. Its witness did not testify, so its case could not be tested by cross-examination. The claimant's detailed defence was unrebutted, hence the allegations were not substantiated.

p. 5
02

Procedural fairness under section 41

Holding

The respondent complied with section 41; the process was procedurally fair

Reasoning

The claimant received a show cause letter with clear particulars, was furnished with requested information by letter dated May 31, 2016, responded to the show cause letter without complaining of insufficient information, and appeared at a disciplinary hearing before dismissal. The section 41 requirements of notification, hearing and consideration of representations were therefore satisfied.

p. 6
03

Remedies for unfair termination

Holding

Six months' gross salary as compensatory damages and a certificate of service awarded

Reasoning

Compensatory damages were assessed at six months' gross salary, informed by the length of the employment relationship and the respondent's failure to substantiate the reasons for termination. Because employment was not disputed, a certificate of service was mandatory under section 51(1) of the Employment Act.

p. 6

Legal principles established

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  • Fair termination requires both substantive justification and procedural fairness, and the burden of proving the reason for termination lies with the employer
  • A document marked for identification but not formally produced has no evidential value
  • A party that elects not to call oral evidence cannot have its pleaded case tested and fails to discharge its burden

Court orders

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  1. 1.A declaration that the claimant's termination by the respondent was unfair and unlawful
  2. 2.Compensatory damages of Kshs 2,700,000 being equivalent to 6 months gross salary
  3. 3.Interest on the damages at court rates from the date of judgment till payment in full
  4. 4.A certificate of service to issue to the claimant
  5. 5.The claimant to have the costs of the suit
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court under the Employment Act, 2007

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, "Chumbe v National Bank of Kenya Limited (Cause 1791 of 2016) [2022] KEELRC 1113 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1113/eng@2022-04-28

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