Esadia v Co-operative Bank of Kenya Limited (Cause E740 of 2021) [2023] KEELRC 2740 (KLR)
The bottom line
#Kenya's Employment Court upheld Co-operative Bank's summary dismissal of a senior manager for gross misconduct and ordered him to repay over Kshs.5.3 million in loans.
What this practically means
#Executive summary
#Key legal issues
#Whether the summary dismissal of the Claimant was substantively fair
The dismissal was substantively fair; the Claimant's negligent conduct in respect of the loan facility that caused a loss of SSP 105M constituted gross misconduct justifying summary dismissal under section 44(4)(c) of the Employment Act and the Staff Manual.
The Claimant, as Head of Corporate & Trade Finance in South Sudan, held a sensitive position of trust. An audit and investigations established that he misrepresented performance results and negligently performed duties, leading to loss of SSP 105M. The court accepted that a manager entrusted with loan appraisal and oversight who betrays that trust may be summarily dismissed for gross misconduct.
Whether the dismissal was procedurally fair under section 41 of the Employment Act
The procedure followed was fair: a cautionary letter, a show cause letter, the Claimant's written response, a disciplinary hearing with a right to be accompanied, a reasoned dismissal letter, and a considered appeal.
The court accepted the Respondent's chronology: show cause letter dated 4 October 2019, the Claimant's written response, an invitation to a disciplinary hearing held on 6 December 2019 with the right to be accompanied and to tender documentary evidence, a dismissal letter dated 24 December 2019 setting out reasons and the right of appeal, and the hearing and rejection of the appeal. The presence of Anthony Mburu at the hearing did not vitiate the process.
Whether the Respondent was entitled to the counter claim of Kshs.5,324,476.07
Yes. The Respondent was awarded the outstanding loan liabilities of Kshs.5,324,476.07 with interest at prevailing commercial bank rates until payment in full.
The court treated the counter claim as straightforward, noting the Respondent's submission that the outstanding loan balance under the personal loan and Commercial Loan Facility was admitted or undisputed by the Claimant. The court found the Respondent entitled to the counter claim and awarded the sums with interest and, as to costs, ordered each party to bear their own.
Legal principles established
#- The standard of proof in an employer's justification for termination is on a balance of probabilities, and the employer need only prove the reasons it genuinely believed to exist.
Court orders
#- 1.The Claimant's claim for wrongful, unfair and unlawful termination of employment is dismissed.
- 2.The Claimant is ordered to meet and pay Kshs.5,324,476.07 owing to the Respondent on the counter claim.
- 3.The Claimant is ordered to pay interest on the sum of Kshs.5,324,476.07 at the prevailing commercial bank interest rates until payment in full.
- 4.Each party shall bear their costs of the suit and counter claim.
- Jurisdiction invoked
- First-instance employment and labour relations claim; Employment Act No. 11 of 2007 and Articles 22(1), 23(1), 25(c), 27, 41(1), 47 and 50 of the Constitution of Kenya, 2010 invoked in the dispute
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Esadia v Co-operative Bank of Kenya Limited (Cause E740 of 2021) [2023] KEELRC 2740 (KLR)", Case Analysis (2023). Cause No E740 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2740/eng@2023-10-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.