Nganyi v National Bank of Kenya Limited (Cause 725 of 2019) [2023] KEELRC 234 (KLR)
The bottom line
#A Kenyan bank lawfully dismissed an employee for hidden debts and secretly selling the bank's security, because it proved a valid reason and followed fair procedure.
What this practically means
#Executive summary
#Key legal issues
#Whether the Claimant's conduct amounted to misconduct under the contract and section 44 of the Employment Act
Yes - her unauthorised private borrowing, living beyond her means and unauthorised sale of the charged security constituted misconduct
The court construed the restrictive contractual clauses (prohibiting undisclosed borrowing and living beyond means) as reasonable in the banking context, which demands high financial probity. The evidence showed chronic undisclosed borrowing, unpaid debts forcing the employer into a debt-collector role, and the unauthorised sale of charged property with misapplied proceeds of Ksh 2,500,000. This fitted Black's Law Dictionary's definition of misconduct within section 44's non-exhaustive list.
Whether the termination was for a valid reason
Yes - the Respondent proved a valid reason under sections 43 and 45 of the EA
The Respondent demonstrated breach of agreed terms of engagement and dishonest conduct in attempting to sell pledged property without the bank's involvement. The court found this constituted misconduct under section 44 and therefore a valid reason existed for termination under sections 43 and 45.
Whether a fair procedure was followed
Yes - show-cause notice, disciplinary hearing, right to accompaniment and right of appeal were all afforded
The record showed a notice to show cause dated 5th July 2017 answered the same day, an invitation to a disciplinary session on 7th July 2017 with the right to a co-employee or union representative, minutes showing the charge was explained and the Claimant heard, a termination letter paying one month in lieu of notice and restating the right of appeal. The Claimant's own copy of the termination letter contradicted her claim of denial of appeal.
Whether prior warnings and employment record could be considered
Yes - under section 45 the Respondent was entitled to consider the Claimant's past poor disciplinary record
The employment record showed repeated disciplinary interventions for the same generic financial misconduct, admissions and relapses. The court held the Respondent acted in accordance with justice and equity, considering the totality of circumstances and prior warnings as sanctioned by section 45 and the Saboke authority.
Legal principles established
#- Under section 43 read with section 45 of the Employment Act, the employer must prove both a valid reason for termination and that fair procedure was followed
- Before the employer justifies termination, the employee must first establish a prima facie case of unlawfulness under section 47 of the Employment Act
- The list of acts of misconduct in section 44 of the Employment Act is not exhaustive; conduct not expressly listed may still constitute misconduct
- In assessing the justice and equity of a termination, the court may consider the employee's previous conduct and prior warnings
Court orders
#- 1.A declaration implied by the holding that the Claimant's contract of service was lawfully terminated
- 2.The Claimant's suit dismissed
- 3.Costs of the suit awarded to the Respondent
- Jurisdiction invoked
- Employment Act, sections 41, 43, 44, 45 and 47; ELRC Procedure Rules (Rule 28(3))
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nganyi v National Bank of Kenya Limited (Cause 725 of 2019) [2023] KEELRC 234 (KLR)", Case Analysis (2023). Cause No 725 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/234/eng@2023-02-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.