Mutai v Co-operative Bank of Kenya (Cause 16 of 2020) [2024] KEELRC 412 (KLR)
The bottom line
#A Kenyan bank lawfully dismissed an employee over fraud allegations even though he was later acquitted in criminal court, because workplace disciplinary cases use a lower standard of proof.
What this practically means
#Executive summary
#Key legal issues
#Whether termination was substantively and procedurally fair
Termination was fair; the Respondent's forensic evidence and adherence to its procedures and section 41 of the Employment Act sufficed
Forensic investigations established that an unauthorised computer installed with the bank's BFUB system accessed customer accounts under the Claimant's user 'jmutai', including the Jojami General Suppliers account, which later received fraudulently disbursed loans. The Court found this sufficient basis for disciplinary proceedings. The Claimant was notified, heard, given minutes, and informed of his right to appeal but did not appeal. The Respondent followed its Code of Conduct, Staff Manual and circulars, discharging its mandate under section 43.
Effect of criminal acquittal on disciplinary termination
Acquittal does not invalidate the dismissal because disciplinary proceedings are decided on a balance of probability, not beyond reasonable doubt
The Claimant was acquitted in the criminal case on 7th December 2023, but the Court held the dismissal was not tested on the criminal threshold. Relying on the Court of Appeal precedent, internal disciplinary proceedings anchored on the employment contract require proof on a balance of probability, whereas criminal proceedings require proof beyond reasonable doubt. For a court to overturn a termination there must be manifest unfairness, both procedural and substantive, which was absent here.
Counterclaim for outstanding loans
Respondent entitled to judgment for Kshs. 506,507/- as the Claimant admitted the debt, but without interest
The Claimant admitted the sum owed on his personal and laptop loans. Judgment was entered for the Respondent for the admitted amount. On interest, the Court exercised discretion considering the parties' conduct, the circumstances of the suit and the Claimant's weak economic position, finding an interest award potentially debilitating, and declined to award interest pursuant to the reconciliation objective in Article 159(2)(c).
Legal principles established
#- Where an employer discharges its mandate under section 43 of the Employment Act by proving reasons it genuinely believed to exist, the termination is fair notwithstanding an acquittal in criminal proceedings, which are judged on a higher standard of proof
- Award of interest is discretionary and the Court may consider the conduct of the parties, the subject of litigation and the need to promote reconciliation
Court orders
#- 1.The Claimant's claim is dismissed with no order as to costs
- 2.Judgment entered for the Respondent against the Claimant on the counterclaim for Kshs. 506,507/-
- 3.The Respondent awarded costs of the suit on the counterclaim sum
- 4.No interest awarded on the counterclaim sum
- Jurisdiction invoked
- Employment and Labour Relations Court Act, section 12; Employment Act 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mutai v Co-operative Bank of Kenya (Cause 16 of 2020) [2024] KEELRC 412 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/412/eng@2024-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.