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ELRCDismissedMemorandum of Claim dated 29th January, 2019· [2023] KEELRC 380 (KLR)

Odera v Cooperative Bank of Kenya Limited (Cause 62 of 2019) [2023] KEELRC 380 (KLR)

Employment and Labour Relations Court
10 February 2023
SRStella Rutto
5,667 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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A Kenyan bank employee's resignation with immediate effect ended his employment, so the bank's later termination letter was legally meaningless and he got nothing.

What this practically means

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Executive summary

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The claimant, formerly a Service Manager at Cooperative Bank of Kenya's Kisumu East Branch, sued over his termination on 8th June 2018 on grounds of alleged audit lapses and desertion of duty, seeking declarations of unfair termination, compensatory damages, salary for the remainder of his service to retirement, leave pay, gratuity and costs. The respondent defended the termination as substantively and procedurally fair following prior warnings and an audit report, and counterclaimed for Kshs 5,764,069.73 in outstanding staff loans. The court framed four issues, chief among them whether the termination had any legal consequence given the claimant's resignation. The claimant had resigned by letter dated 25th May 2018, protesting the invitation to a disciplinary hearing as double punishment. Relying on Edwin Beiti Kipchumba, Lottering and Kennedy Obala Oaga, the court held that resignation is a unilateral act effective upon notification without requiring employer acceptance, so the employment relationship was severed before the termination letter issued. The termination was declared null and void, and no determination of its fairness was possible. All reliefs founded on unlawful termination failed; leave pay was unpleaded and gratuity without basis. The unopposed counterclaim succeeded, the claimant having admitted the loan liability. The claim was dismissed with each party bearing its own costs; judgment was entered for the respondent on the counterclaim with interest from the date of judgment.

Key legal issues

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01

Legal effect of the claimant's resignation vis-à-vis the subsequent termination

Holding

The resignation took effect on 25th May 2018, severing the employment relationship; the later termination letter of 8th June 2018 was null and void

Reasoning

The court held that resignation is a unilateral act which requires no acceptance by the employer, adopting the reasoning in Edwin Beiti Kipchumba, Lottering and Kennedy Obala Oaga. The respondent itself issued a certificate of service showing the last day of service as 28th May 2018, the date the resignation was received, effectively acknowledging the employment relationship had ended before the termination letter was issued.

p. 10
02

Whether the termination was unfair and unlawful

Holding

No determination possible since the termination was null and void

Reasoning

Having found the termination a nullity, the court held it was illogical to inquire into its fairness, following Kennedy Obala Oaga, since declaring it unfair would imply it had legal consequences.

p. 10
03

The counterclaim for outstanding staff loans

Holding

Counterclaim succeeded as unopposed and admitted in cross-examination

Reasoning

The claimant did not file a response to the counterclaim despite leave granted, and admitted during cross-examination that he had outstanding loan liabilities; judgment was entered for Kshs 5,764,069.73 with interest from judgment.

p. 10

Legal principles established

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  • A resignation by an employee is a unilateral act that takes effect without the employer's acceptance
  • Once an employee resigns with immediate effect, the employer loses authority to discipline or terminate the employment

Court orders

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  1. 1.Declaration that the claimant effectively resigned on 25th May, 2018 and his subsequent termination on 8th June, 2018 was null and void
  2. 2.Dismissal of the claim in its entirety with an order that each party bears its own costs
  3. 3.Judgment entered for the respondent on the counterclaim in the sum of Kshs 5,764,069.73 together with costs, with interest from the date of judgment until payment in full

Authorities

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Legislation

  • Constitution of KenyaArticle 50
  • Constitution of KenyaArticles 27(4) & (5) and 28
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Employment Actsection 43(2)
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (11)

  • Evans Odhiambo Kidero & 4 Others vs Ferdinand Ndungu Waititu & 4 Others
  • Cooperative Bank of Kenya Limited vs Yator
    Civil Appeal 87 of 2018 KECA 95 (KLR)
  • Mahlakoane vs South African Revenue Service
    2018 (39) ILJ 1034 (LAC)
  • Jansen vs Legal Aid South Africa
    JA121/2014 (2018) ZALCCT 17; (2018) 39 ILJ 2024 (LC)
  • Kenya Revenue Authority vs Reuwel Waithaka Gitahi & 2 Others
    (2019) eKLR
  • Violet Kadala Shitsukane vs Kenya Post Savings Bank
    (2020) eKLR
  • Samson Thuku Mutiso vs Diamond Trust Bank Kenya Limited
    (2015) eKLR
  • Edwin Beiti Kipchumba vs National Bank of Kenya Limited
    [2018] eKLR
  • Lottering vs Stellenbosch Municipality
    (2010) 31 ILJ 2923 (LC)
  • Kennedy Obala Oaga vs Kenya Ports Authority
    [2018] eKLR
  • Mtati vs KPMG (Pty) Ltd
    (2017) BLL 315 (LC)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act over a claim of unfair termination and a counterclaim for outstanding staff loans

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Odera v Cooperative Bank of Kenya Limited (Cause 62 of 2019) [2023] KEELRC 380 (KLR)", Case Analysis (2023). Memorandum of Claim dated 29th January, 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/380/eng@2023-02-10

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