Khasiani v Barclays Bank of Kenya Limited & another (Cause 926 of 2016) [2022] KEELRC 1487 (KLR)
The bottom line
#A Kenyan court ordered a bank and a Sacco to pay an ex-employee over Kshs 1.1 million after their careless letter got him fired.
What this practically means
#Executive summary
#Key legal issues
#Retrospective applicability of the Employment Act, 2007
The Act does not apply; the claimant's contract had already been terminated before enactment, so section 93's saving clause did not capture it
The cause of action arose in 2002, before the Employment Act, 2007. Section 93 is a transition clause saving valid contracts of service at enactment. The claimant's contract had already been terminated and was no longer valid, so it did not transit to the new Act. It would also be unfair to judge an employer's conduct against a standard that did not exist when the employment was terminated.
Liability of the 2nd respondent for wrongful dismissal
The dismissal was wrongful; it was based on unsubstantiated allegations of double payment of salary despite the bank's clarification
The 2nd respondent dismissed the claimant for misappropriating funds by double payment. However, the 1st respondent's letter of October 9, 2002 clarified the error, and the salary was returned and acknowledged before the dismissal. No evidence backed the allegations of gross misconduct. The dismissal was therefore wrongful and the 2nd respondent liable.
Liability of the 1st respondent for negligent misrepresentation
The 1st respondent was liable; it communicated an erroneous account status without verification and breached its duty of confidentiality
The bank stated on September 11, 2002 that the claimant's account had been credited and funds utilised, which was erroneous - the credit was a cash deposit unconnected to the 2nd respondent's funds. A banker owes a duty of reasonable skill and care and confidentiality to its customer. The bank disclosed account information to the 2nd respondent without authority and without verifying facts, triggering the dismissal.
Liability of the 1st respondent for defamation and the Court's jurisdiction
The Court had jurisdiction over the defamation claim arising from employment, but the claim failed for want of proof of publication to third parties
The court held it has jurisdiction over defamation arising within the employment relationship under section 12(3) of the Industrial Court Act. However, the letter was addressed only to the 2nd respondent, a corporate entity, and no third-party officer was named or called to prove publication and injury to reputation. The claimant therefore failed to discharge the burden of proof.
Legal principles established
#- The Employment Act, 2007 does not apply retrospectively to a contract of employment terminated before its enactment; the applicable law is that in force at the time of termination
- A bank owes its customer a duty to exercise reasonable skill and care and a duty of confidentiality, breach of which renders it liable for negligent misrepresentation
- The ELRC has jurisdiction to determine defamation claims arising within an employment relationship
- A defamatory statement must be published to a third party, and the burden of proving publication lies on the claimant
- General damages are not awardable for wrongful termination; damages are limited to salary in lieu of notice
Court orders
#- 1.The 2nd respondent to pay to the claimant damages, equivalent to one month's salary in lieu of notice, being the sum of Kshs 100,000.00
- 2.The 1st respondent to pay to the claimant damages for negligent misrepresentation being the sum of Kshs 1,000,000.00
- 3.Interest on the amount in (a) at court rates from the date of filing the suit until payment in full
- 4.Interest on the amount in (b) at court rates from the date of Judgment until payment in full
- 5.The respondents shall bear the costs of the suit in equal proportion
- Jurisdiction invoked
- Article 162(2) of the Constitution and sections 12(1) and (2) of the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Khasiani v Barclays Bank of Kenya Limited & another (Cause 926 of 2016) [2022] KEELRC 1487 (KLR)", Case Analysis (2022). Cause No 926 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1487/eng@2022-06-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.