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ELRCDismissedNot stated in judgment· [2023] KEELRC 904 (KLR)

Ochieng v KCB Bank Kenya Limited (Cause 2591 of 2016) [2023] KEELRC 904 (KLR)

Employment and Labour Relations Court
13 April 2023
MNMathews N Nduma
1,748 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court upheld a bank employee's dismissal, ruling her employer had both a valid reason and followed a fair disciplinary process.

What this practically means

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Executive summary

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The claimant, formerly employed by the respondent bank for over 22 years and rising from teller to management, sued for reinstatement, consolidated pay with interest, and a declaration that her March 3, 2013 dismissal (following a December 30, 2014 transaction) was unlawful and unfair. The dispute arose from an erroneous credit of Ugshs 281,700,000 to a customer's account instead of Ugshs 9,390,000, resulting in a loss of about Kshs 5.5 million after the customer encashed the overpayment. The claimant, who was Acting Operations/Branch Manager, attributed the error to a system failure beyond her control and blamed the substantive Branch Manager for failing to detect the error from the Branch Manager's report. The respondent's witness maintained the error was human, caused by the teller's incorrect input negligently approved by the claimant, who also failed to detect it in time. The Court framed three issues: valid reason, fair procedure, and entitlement to reliefs. Applying Sections 43(1) and (2) and Sections 36, 41, 43, 44 and 45 of the Employment Act, 2007, and the test in Walter Ogal Anuro v Teachers Service Commission requiring both substantive justification and procedural fairness, the Court found the claimant's system-failure explanation lacked credibility, that she negligently approved the transaction and failed to check the trial balance before handover. Procedure was held fair: notice to show cause, disciplinary hearing, appeal, and terminal benefits. The suit was dismissed with each party bearing its own costs, the Court noting the claimant's long service.

Key legal issues

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01

Whether the respondent had a valid reason to dismiss the claimant

Holding

Yes - the claimant negligently approved an erroneous transaction and failed to detect the error before encashment

Reasoning

The Court found the overpayment of Ugshs 281,700,000 resulted from a teller's human error in inputting the wrong amount, which the claimant negligently approved. As Acting Branch Manager until December 31, 2014, she was obliged to check the trial balance in the Branch Manager's report but failed. Her explanation of a system failure lacked credibility.

p. 3
02

Whether the respondent followed a fair procedure

Holding

Yes - the claimant received a notice to show cause, answered it, attended a disciplinary hearing with the right to a colleague or union representative, appealed, and received terminal benefits

Reasoning

The claimant admitted receiving a notice to show cause which she answered, attending a disciplinary hearing informed of her right to be accompanied, and appealing the dismissal, which was upheld. Terminal benefits were paid. The Court held Sections 36, 41, 43, 44 and 45 of the Employment Act were complied with.

p. 4

Legal principles established

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  • For a termination of employment to pass the fairness test, there must be both substantive justification and procedural fairness
  • Under Section 43(1) and (2) of the Employment Act, 2007, the employer must prove a valid reason to dismiss an employee

Court orders

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  1. 1.The entire suit is dismissed
  2. 2.Each party to bear the costs of the suit

Authorities

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Legislation

  • Employment Act, 2007Section 43(1) and (2)
  • Employment Act, 2007Sections 36, 41, 43, 44 and 45

Cases cited (2)

  • Felix Mbolozi Kioko v Director of Public Prosecutions
    [2020] eKLR
  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
Jurisdiction invoked
Original jurisdiction under the Employment Act, 2007 (Sections 36, 41, 43, 44 and 45)

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, "Ochieng v KCB Bank Kenya Limited (Cause 2591 of 2016) [2023] KEELRC 904 (KLR)", Case Analysis (2023). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/904/eng@2023-04-13

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