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ELRCPartially AllowedCause No E070 of 2022· [2023] KEELRC 3159 (KLR)

Wanyara v Equity Bank (Kenya) Limited (Cause E070 of 2022) [2023] KEELRC 3159 (KLR)

Employment and Labour Relations Court
30 November 2023
2,143 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Even if an employee commits serious misconduct, Kenyan employers must still give notice and a hearing before summary dismissal, or the dismissal is procedurally unfair.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank from 11 September 2008 and last serving as operations manager at Kwale, was arrested on 11 September 2019 on allegations of conspiracy and stealing by servant under Section 395(f) of the Penal Code, arising from Mpesa transactions through his phone and Till relating to his employment as cash officer. He remained in police custody for over 14 days and was released on bond. He was summarily dismissed by letter dated 25 September 2019 sent to his postal address, citing Section 44(4)(f) of the Employment Act, 2007, without any disciplinary hearing. He claimed notice pay, service pay, house allowances and 12 months' compensation. The court held that even where gross misconduct exists, the mandatory procedure of Section 41(2) — notification, hearing and consideration of representations — must be followed, and custody is no bar to issuing hearing notice. Relying on Oyombe v Eco Bank Limited and Jane Nyandiko v Kenya Commercial Bank Limited, the court found the dismissal procedurally unfair. However, given the substantive grounds, only three months' salary (Kshs. 258,000) was awarded as compensation plus notice pay of Kshs. 86,000. Service pay was denied because the claimant was in a pension scheme, and house allowance because his salary was consolidated. The respondent's surcharge of Kshs. 529,111 for losses was set off, and each party was ordered to bear its own costs.

Key legal issues

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01

Procedural fairness of summary dismissal

Holding

Termination was procedurally unfair because the claimant was not given notification and a hearing as required by Section 41(2) of the Employment Act.

Reasoning

The court held that Section 41(2) requires notification, a hearing and consideration of representations in the presence of a fellow employee of choice; absence of any one obviates fairness. The claimant's custody did not bar issuing a hearing notice to his last known address, as the respondent did with the dismissal notice. Failure to do so rendered the dismissal procedurally unfair despite substantive grounds.

p. 4
02

Compensation and notice pay

Holding

Three months' salary as compensation and one month's notice pay were awarded notwithstanding the procedural unfairness finding.

Reasoning

Taking into account the substantive grounds — the claimant's involvement in alleged conspiracy and stealing by servant — the court found three months' salary sufficient compensation, plus notice pay, since notice is also due where summary dismissal is found procedurally unfair.

p. 4
03

Deductions for losses caused by the employee

Holding

The respondent was entitled to deduct the surcharge of Kshs. 529,111 for losses caused by the claimant under Section 19 of the Act.

Reasoning

The court found the employer justified in deducting liabilities and losses caused by the claimant under Section 19 of the Employment Act. The respondent had informed the claimant of a liability of Kshs. 529,111 which he had not cleared, so this was set off against the awards.

p. 5

Legal principles established

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  • Even where an employer has grounds for summary dismissal under Section 44, the due process requirements of Section 41(2) of the Employment Act must be adhered to and are mandatory.
  • An employee's detention in police custody does not excuse the employer from issuing notice of a disciplinary hearing.

Court orders

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  1. 1.Compensation of Kshs. 258,000
  2. 2.Notice pay of Kshs. 86,000
  3. 3.Recognition of terminal dues paid at Kshs. 137,205.71 less Kshs. 529,111 due from the claimant
  4. 4.Each party to bear own costs

Authorities

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Legislation

  • Penal CodeSection 395(f)
  • Employment Act, 2007Section 44(4)(f)
  • Employment Act, 2007Section 41(2)
  • Employment Act, 2007Section 45
  • Employment Act, 2007Section 18(5)(b)
  • Employment Act, 2007Section 19
  • Employment Act, 2007Section 44

Cases cited (2)

  • Oyombe v Eco Bank Limited
    (Civil Appeal 185 of 2017) [2022] KECA 540 (KLR)
  • Jane Nyandiko v Kenya Commercial Bank Limited
    (2017) eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes under the Employment Act, 2007

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, "Wanyara v Equity Bank (Kenya) Limited (Cause E070 of 2022) [2023] KEELRC 3159 (KLR)", Case Analysis (2023). Cause No E070 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3159/eng@2023-11-30

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