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ELRCPartially AllowedCause No 774 of 2019· [2023] KEELRC 2662 (KLR)

Lang'at v First Community Bank Limited (Cause 774 of 2019) [2023] KEELRC 2662 (KLR)

Employment and Labour Relations Court
30 October 2023
874 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 as fair because proper reasons and procedure were followed, but ordered the employer to issue his certificate of service.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank on 12.06.2017 as a Management Officer and confirmed as Finance Administration Officer effective 01.12.2017 at a monthly salary of Kshs.100,000.00, sued for unlawful termination and unpaid terminal benefits. He received two letters to show cause in March and April 2019: one regarding failure to repay a loan from Platinum Credit, including issuing bouncing cheques; the other regarding an overdrawn staff account. After a disciplinary hearing on 18.04.2019, which the claimant attended and whose minutes he signed, his employment was terminated by letter dated 10.05.2019, with dues computed subject to a staff facility car loan liability of Kshs.1,152,820.00. The respondent admitted the employment and defended the dismissal as lawful, on grounds of breach of the contract and Human Resource Manual, and prayed for dismissal of the suit with costs. The claimant testified, confirming the bouncing cheques, the show-cause letters, the disciplinary hearing and the dismissal letter. The court found the reasons for termination genuine under section 43 of the Employment Act and not unfair under section 45, as they related to the claimant's conduct, compatibility and the respondent's operational requirements. The respondent was found to have accorded the claimant due process of notice and hearing under section 41. The reliefs of salary in lieu of notice and compensation for unfair termination therefore failed. However, the claimant was held entitled to a certificate of service under section 51 of the Employment Act. Judgment was entered ordering the respondent to deliver the certificate of service by 15.11.2023, with each party to bear own costs.

Key legal issues

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01

Validity of reasons for termination

Holding

The reasons (issuing bouncing cheques, overdrawn staff account and breach of employer's policies) were genuine and valid under section 43 of the Employment Act.

Reasoning

The claimant admitted issuing bouncing cheques to Platinum Credit and failing to fully regularise his overdrawn staff account. Both show-cause letters alleged breach of the respondent's policies. The court found these genuine reasons relating to the claimant's conduct, compatibility and the respondent's operational requirements, satisfying sections 43 and 45 of the Employment Act.

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02

Procedural fairness of the termination

Holding

The respondent accorded the claimant due process of notice and hearing under section 41 of the Employment Act.

Reasoning

The claimant received two letters to show cause with time to respond, was invited by letter dated 11.04.2019 to a disciplinary hearing with the right to a staff representative, attended and participated in the hearing on 18.04.2019, and signed the minutes. This satisfied the procedural fairness requirements of section 41 of the Employment Act.

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03

Entitlement to a certificate of service

Holding

Despite failing on the substantive claim, the claimant is entitled to a certificate of service under section 51 of the Employment Act.

Reasoning

The court found the claimant failed to establish the reliefs claimed (notice pay and compensation) because the termination was lawful and procedurally fair. However, a certificate of service is a statutory entitlement under section 51 of the Employment Act, and the court ordered its delivery by 15.11.2023.

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Legal principles established

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  • Termination reasons are genuine and valid where they relate to the employee's conduct, compatibility and the employer's operational requirements under section 45 of the Employment Act
  • Due process under section 41 of the Employment Act is satisfied by a notice to show cause and a disciplinary hearing
  • An employee is entitled to a certificate of service under section 51 of the Employment Act regardless of the lawfulness of termination

Court orders

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  1. 1.The respondent to deliver the certificate of service by 15.11.2023
  2. 2.Each party to bear own costs of the suit

Authorities

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Legislation

  • Employment Actsection 43
  • Employment Actsection 45
  • Employment Actsection 41
  • Employment Actsection 51
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (sections 41, 43, 45 and 51) and other labour laws

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, "Lang'at v First Community Bank Limited (Cause 774 of 2019) [2023] KEELRC 2662 (KLR)", Case Analysis (2023). Cause No 774 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2662/eng@2023-10-30

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