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ELRCAllowedCause No 575 of 2016· [2022] KEELRC 1347 (KLR)

Wagunya v Equity Bank Limited (Cause 575 of 2016) [2022] KEELRC 1347 (KLR)

Employment and Labour Relations Court
15 July 2022
2,190 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Mombasa court ruled a bank unfairly dismissed an employee without a genuine hearing and awarded the maximum 12 months' salary in compensation.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from March 14, 2006 in various capacities and lastly as Relationship Manager, Operations at Ukunda Branch, was summarily dismissed on April 3, 2014 over alleged manipulation of foreign exchange rates, through which the bank alleged he personally benefited Kshs. 1,124,805.00. He had earlier been arrested and charged with attempted stealing in Criminal Case 259 of 2014 at Kwale and was acquitted under section 87(a) of the Criminal Procedure Act on February 22, 2016. He claimed unfair termination, arguing he was never heard, in breach of section 41 of the Employment Act and Article 50 of the Constitution, and sought general damages, notice pay, 12 months' compensation, a certificate of service and costs. The respondent asserted that due procedure was followed, that the disciplinary process was independent of the criminal process, and that the acquittal did not exculpate him administratively. The claimant testified; the respondent called no witness. CW2, a Forensic Document Examiner, opined that the signature on the disciplinary minutes was not the claimant's. The court found, on a balance of probability, that the claimant was neither invited to nor attended the disciplinary hearing, breaching section 41 of the Employment Act and the rules of natural justice. It further found the respondent failed to prove the reasons for dismissal existed under sections 43 and 45. Applying section 49, the court awarded maximum compensation of 12 months' salary (Kshs. 1,711,008.00) plus notice pay of Kshs. 142,584.00, totalling Kshs. 1,853,592.00 less PAYE, a certificate of service within 30 days, and costs to the claimant.

Key legal issues

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01

Fairness of the dismissal procedure under section 41 of the Employment Act

Holding

The procedure was unfair; the claimant was not invited to or present at the disciplinary hearing.

Reasoning

The claimant's testimony and that of CW2, a Forensic Document Examiner, established that the alleged signature on the disciplinary minutes was not his. The respondent called no rebutting evidence. On a balance of probability the claimant was neither invited to nor attended the hearing, breaching section 41 and the rules of natural justice.

p. 4
02

Validity of the reasons for dismissal under sections 43 and 45

Holding

The respondent failed to prove the reasons for the summary dismissal existed at the time of dismissal.

Reasoning

Under section 47(5) the burden of justifying the termination rested on the employer. The claimant testified he had no system access to initiate the exchange transactions and that the alleged rate manipulation was impossible. The respondent called no witness, so it failed to discharge its burden under sections 43 and 45.

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Remedies under section 49 of the Employment Act

Holding

Maximum compensation of 12 months' salary was awarded, plus one month's salary in lieu of notice.

Reasoning

The claimant served for about eight years with a clean record and desired to continue in employment. Aggravating factors were denial of due process and the respondent pretending to have held a disciplinary hearing. The court found a case for maximum compensation as prayed, plus Kshs. 142,584.00 in lieu of notice.

p. 4

Legal principles established

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  • An employer must afford an employee notice, an opportunity to be heard and representation before dismissal, as required by section 41 of the Employment Act.
  • The burden of justifying the grounds for termination rests on the employer, and failure to prove the reasons existed at the time of dismissal renders the dismissal unfair.
  • An acquittal in a criminal case does not amount to exculpation in an administrative disciplinary process — as contended by the respondent, not decided against the claimant here.

Court orders

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  1. 1.Declaration that the summary dismissal was unfair
  2. 2.Respondent to pay claimant Kshs. 1,853,592.00 (less PAYE) by September 1, 2022, failing interest at Court rates from date of Judgment until full payment
  3. 3.Respondent to deliver certificate of service within 30 days from date of Judgment
  4. 4.Respondent to pay claimant costs of the suit

Authorities

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Legislation

  • Employment Act44(4)(f)
  • Employment Act41
  • Employment Act43
  • Employment Act45
  • Employment Act47(5)
  • Employment Act49
  • Criminal Procedure Act87(a)
  • Constitution of KenyaArticle 50
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination claims under the Employment Act, 2007 (sections 41, 43, 45, 47(5), 49) and Article 50 of the Constitution of Kenya invoked by the claimant

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, "Wagunya v Equity Bank Limited (Cause 575 of 2016) [2022] KEELRC 1347 (KLR)", Case Analysis (2022). Cause No 575 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1347/eng@2022-07-15

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