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ELRCPartially AllowedNot stated in the judgment as extracted· [2023] KEELRC 3187 (KLR)

Wang v Equity Bank (Cause E945 of 2021) [2023] KEELRC 3187 (KLR)

Employment and Labour Relations Court
5 December 2023
AJABUODHA NELSON JORUM
5,005 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court ruled a bank unfairly fired an executive, holding dismissal must be proportionate and employers must prove employees were actually conflicted.

What this practically means

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Executive summary

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The claimant, formerly employed by the respondent bank on two occasions, most recently as Group Head of Chinese Coverage Business from 10th September 2020 until his summary dismissal on 15th October 2021, sued for unfair termination. He was dismissed on two allegations: failure to declare a personal interest in a transaction between two bank customers (South River Homes and Eris Property Developers) and sharing confidential credit proposal information with a bank customer's director by email. The court framed two issues: whether the reasons for dismissal were valid and justifiable, and whether the dismissal process was fair, plus remedies. On the first allegation, the court found it common ground that the transaction pre-dated the claimant's re-employment, and the respondent failed to demonstrate how he became conflicted. On the second, the court held that the claimant's inquiry to a director of a customer within his own portfolio, prompted by concerns of possible fraud, could not amount to unauthorized disclosure absent evidence of inappropriate use. Applying the reasonableness and proportionality standard, the court found the dismissal disproportionate, since lesser disciplinary measures were available and no reputational jeopardy or loss was demonstrated. Reinstatement was not awarded; instead the court entered judgment for the claimant for one month's salary in lieu of notice (USD 16,000) and four months' salary as compensation (USD 64,000), with costs of the suit and interest at court rates from delivery until payment in full, subject to taxes and statutory deductions where applicable. Claims for reinstatement, defamation damages and the alternative Kshs. 31,188,400/- were not granted. Judgment delivered virtually at Nairobi on 5th December 2023 by Abuodha Nelson Jorum, Judge.

Key legal issues

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01

Validity of the reason for termination (conflict of interest)

Holding

The conflict-of-interest reason was invalid because the transaction occurred when the claimant was not an employee and the respondent failed to show how he became conflicted.

Reasoning

It was common ground that the guarantorship transaction took place in September 2019, after the claimant had resigned and before his re-employment in September 2020. The Code of Conduct clause relied on binds 'any member of staff', and the claimant was not a member of staff at the material time. The respondent therefore bore, but did not discharge, the burden of demonstrating how the claimant became conflicted in a pre-employment transaction.

p. 9
02

Validity of the reason for termination (sharing confidential information)

Holding

The inquiry to Mr. Chen Chong, a director of a customer within the claimant's portfolio, could not be construed as unauthorized disclosure of confidential information absent evidence of inappropriate use.

Reasoning

The claimant was Group Head of Chinese Business Coverage and Eris was in his portfolio. He sought clarification from the company's director about a loan application the director said he was unaware of, out of caution about possible fraud. Without evidence of inappropriate use of the information, the communication was within his responsibility and not a breach of confidentiality.

p. 9
03

Proportionality of the sanction of dismissal

Holding

Termination was disproportionate and unreasonable; lesser disciplinary measures would have sufficed, rendering the dismissal unfair.

Reasoning

The respondent did not demonstrate reputational jeopardy or risk of loss from the alleged infractions. Even if the conduct breached the code of regulations, milder sanctions such as warnings or surcharge were available. Dismissal as the first and ultimate sanction was disproportionate and therefore unfair.

p. 9
04

Assessment of remedies

Holding

The court awarded one month's salary in lieu of notice and four months' salary as compensation, having regard to the claimant's one year of service and the one-month termination clause.

Reasoning

The claimant served about a year on a permanent and pensionable contract with a one-month notice termination clause. Considering the short duration, the possibility of natural end of contract, and his juniority in any restructuring, four months' salary was deemed adequate compensation in addition to notice pay.

p. 10

Legal principles established

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  • Reasons for termination need not be strictly proved but must be reasonable and proportional in the circumstances.
  • Not all workplace infractions attract dismissal; lesser disciplinary measures may be appropriate and termination must be proportionate.

Court orders

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  1. 1.One month's salary in lieu of notice of USD 16,000
  2. 2.Four months' salary as compensation of USD 64,000
  3. 3.Costs of the suit to the claimant
  4. 4.Interest at court rates on items (i) and (ii) from date of delivery until payment in full, subject to taxes and statutory deductions where applicable
Jurisdiction invoked
Employment and labour relations jurisdiction (Employment Act; unfair termination claim under a statement of claim filed in the ELRC)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Wang v Equity Bank (Cause E945 of 2021) [2023] KEELRC 3187 (KLR)", Case Analysis (2023). Not stated in the judgment as extracted. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/3187/eng@2023-12-05

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