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ELRCPartially AllowedCause No 80 of 2019· [2023] KEELRC 945 (KLR)

Okomo v KCB Bank Kenya Limited (Cause 80 of 2019) [2023] KEELRC 945 (KLR)

Employment and Labour Relations Court
20 April 2023
7,913 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~32 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled a bank unfairly fired a union representative because it couldn't prove its reason, awarding him seven months' salary plus costs.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent bank since 2007 and elected Chair of the Central Stafi Committee of the Banking, Insurance and Finance Union (Kenya) in August 2018, was summarily dismissed on 9th November 2018 for gross misconduct. The dismissal stemmed principally from a text message he circulated in September 2018 urging unionised employees not to submit performance appraisal forms, which the Respondent said defied a Consent Order recorded on 6th or 7th September 2018 lifting an August 2017 court order stopping the evaluation. The Claimant contended the Consent Order was suspended and only effective on 20th September 2018, and that the disciplinary process violated his rights to fair labour practice and fair administrative action. The court framed the dispute as whether the employment relationship was lawfully closed and the parties' entitlement to relief. Applying sections 43 and 45 of the Employment Act, the court held the employer bore the burden of proving the Consent Order and its immediate effect, and having failed to produce the extracted order, the Respondent did not establish a valid reason for termination. Further procedural flaws were found: failure to supply requested information and reasons for rejecting the Claimant's defences, contravention of the CBA's two-warning requirement, an eight-month delay in hearing the appeal, and non-disclosure of panel recommendations attracting an adverse inference. The termination was declared unlawful. The court awarded seven months' gross salary (Ksh. 1,127,651.00) with interest, costs of the case, and a Certificate of Service. Claims for severance/service pay, bonus, and twenty-three years' loss of earnings were declined.

Key legal issues

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01

Whether the Respondent proved a valid reason for termination, namely defiance of a Consent Order and incitement of employees

Holding

The Respondent failed to prove the existence and immediate effect of the Consent Order lifting the August 2017 order; the termination reason was not validated under sections 43 and 45 of the Employment Act.

Reasoning

The reason for termination was the text message urging unionised employees not to submit evaluation forms, said to defy a Consent Order. The Claimant disputed that the Consent Order immediately lifted the August 2017 order. The burden lay on the employer under sections 43 and 45 to prove the order's existence, effect and the employee's awareness. The Respondent never produced the extracted Consent Order at the disciplinary hearing or in court, so the reason was unproved.

p. 6
02

Whether the disciplinary process and appeal met the requirements of procedural fairness and fair administrative action under article 47 and the Fair Administrative Action Act

Holding

The process was marred by procedural flaws: failure to supply requested information and reasons, an eight-month delay in hearing the appeal, and findings of guilt without disclosed reasons, infringing the right to fair administrative action.

Reasoning

The Disciplinary Committee made no comments on, and gave no reasons for rejecting, the Claimant's explanations regarding the media inquiry and the encrypted text. The Claimant was denied information necessary to decide on an appeal. The appeal took approximately eight months to process, with shifting justifications from the Respondent. This denied him administrative action that was expeditious, efficient, lawful, reasonable and procedurally fair under article 47.

p. 11
03

Whether the Claimant's conduct as a trade union representative was protected

Holding

The law recognises and protects a shop floor representative's participation in trade union activities, including disseminating information to members; challenging the employer's letter was not acting contrary to the employer's legitimate interest where the employer had not proved its order.

Reasoning

The Claimant wore two hats: employee and union representative. As shop floor representative he had a legitimate duty to protect unionised employees' interests and disseminate necessary information. Since the Respondent failed to prove the Consent Order lifted the August 2017 order, the Claimant was entitled to resist resumption of the evaluation and advise members to await evidence of the lifting of the order.

p. 6
04

Whether the CBA requirement of two warnings before termination for disobeying lawful orders was complied with

Holding

Clause A5(b(iv)) of the CBA required at least two warnings before termination for disobeying lawful orders; in the absence of evidence of previous warnings, summary dismissal contravened the CBA.

Reasoning

The CBA provided that an employee found guilty of failing to obey lawful orders should receive at least two warnings before termination. The Respondent produced no evidence of previous warnings, yet lumped all charges together and treated them as serious infractions warranting summary dismissal, thereby contravening the CBA provision.

p. 9
05

Quantum of compensation for unfair termination

Holding

A seven-month gross salary award (Ksh. 1,127,651.00) was appropriate given the union-representation trigger, the traumatic delay, and nearly ten years of unblemished service; the maximum twelve-month award was not justified.

Reasoning

Section 49 of the Employment Act guides assessment, considering notice entitlement, circumstances of termination and length of service. The court noted the termination was triggered by the Claimant's union role, the traumatic delay in the appeal, and close to ten years of unblemished service. Applying the principle that the maximum award requires justification, seven months' gross pay was awarded, subject to taxes and interest.

p. 13

Legal principles established

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  • The burden of proving the reason for termination rests on the employer, who must prove a valid reason and fair procedure under sections 43 and 45 of the Employment Act.
  • Where the validity of the reason for termination depends on the existence and effect of a court order (such as a Consent Order), the employer must produce the extracted order as evidence; mere assertion or a letter alleging the order is not proof.
  • An employee whose contract has been terminated prematurely cannot be compensated by salary until retirement age.
  • Except in exceptional circumstances, the court should not grant the maximum award under section 49 of the Employment Act without justification.
  • A shop floor/trade union representative is under a legitimate duty to protect the interests of unionised employees and to disseminate necessary information to those he leads.
  • Where an employer fails to release material information (such as disciplinary panel minutes) called for under articles 41 and 47 of the Constitution, the court may draw an adverse inference.
  • An employer's internal disciplinary process is distinct and separate from external court proceedings.

Court orders

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  1. 1.Declaration that the termination of the Claimant's contract was unlawful
  2. 2.Compensation equivalent to seven months' gross salary (Ksh. 161,093.00 x 7 = Ksh. 1,127,651.00), subject to applicable taxes
  3. 3.Interest on the award at court rates from the date of the decision
  4. 4.Costs of the case awarded to the Claimant
  5. 5.The Respondent to issue the Claimant with a Certificate of Service

Authorities

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Legislation

  • Constitution of Kenya 2010article 41
  • Constitution of Kenya 2010article 47
  • Employment Actsections 35, 40, 41, 43, 45, 49
  • Fair Administrative Action ActNot specified (read with article 47)
  • Labour Relations Actsections 73, 84
  • Trade Disputes Act (repealed)Not specified
  • Collective Bargaining Agreement between the partiesClause A5 (b (iv))
  • Recognition Agreement between the Kenya Bankers (Employers) Association and the Banking Insurance and Finance Unionclauses 18, 19 (d), (f) and (j)
  • ELRC Procedure RulesRule 28 (3)

Cases cited (3)

  • Lenny Kimathi Murungi v Kenya Wine Agencies Limited
    Civil Appeal No. E016 of 2021 (unreported)
  • Mary Saru Mwandawiro v Kenya Ports Authority
    [2016] eKLR
  • Ol Pejeta Ranching Limited v David Wanjau Muhoro
    [2017] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (sections 43, 45 and 49 of the Employment Act invoked)

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, "Okomo v KCB Bank Kenya Limited (Cause 80 of 2019) [2023] KEELRC 945 (KLR)", Case Analysis (2023). Cause No 80 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/945/eng@2023-04-20

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