Kioi v Consolidated Bank of Kenya Limited (Cause 1982 of 2015 & 1381 of 2016 (Consolidated)) [2024] KEELRC 1143 (KLR)
The bottom line
#A Kenyan court ruled that suspending employees on half pay without justification and firing them without disclosing evidence was unfair, awarding them compensation.
What this practically means
#Executive summary
#Key legal issues
#Lawfulness of the protracted suspension and withholding of 50% salary
The suspension was unjustified and the withholding of half salary lacked legal and contractual justification.
The Respondent had already internally investigated the matter and concluded beyond reasonable doubt that malpractice occurred before suspending the Claimants, and could not explain what changed to justify exclusion from the workplace. The 2016 HR Manual relied on for half-pay suspension only came into effect after the suspension; the 2011 version had no such provision. The Respondent therefore failed to discharge its burden.
Whether the termination was substantively fair
The dismissal was not substantively fair; the Respondent failed to prove the reasons for dismissal under sections 43 and 45 of the Employment Act.
The Respondent alleged the Claimants used the wrong formula for auctioneer fees contrary to its credit policy, but never placed the policy before the Court nor cited the specific offended provision or stipulation, either in the disciplinary process or at trial. The Court drew an adverse inference that no policy or statutory provision supported the allegations, so the Respondent stated but did not prove the reasons for dismissal.
Whether the dismissal was procedurally fair
Although the Respondent partially complied with section 41 (show cause letters, hearing, right of accompaniment), the dismissal was procedurally unfair because the Claimants were denied access to documents and details needed to respond, and their counsel's letter raising constitutional issues was ignored.
Procedural fairness requires notification, hearing and consideration. The hearing component was incomplete because the Claimants were denied the files and the details of the alleged M-Pesa payments, impeding their defence. The Respondent was also wrong to dismiss legal representation in disciplinary processes as improper; the post-2010 Constitution brings rights into the workplace. Partial adherence does not make the process fair.
Remedies
The Claimants were entitled to notice pay, section 49 compensatory damages (3 months for the 1st Claimant and 6 months for the 2nd), the withheld half salary for 13 months, interest, costs, and certificates of service; constructive dismissal, anticipatory earnings, unpaid leave and exemplary damages were refused.
Section 35 read with section 36 entitled them to notice pay since no notice was issued. Compensation under section 49(1)(c) is discretionary; the Court considered length of service, expectation to serve until retirement, the Respondent's lack of substantive justification and procedural lapses. Leave had been paid and exemplary damages were not proved.
Legal principles established
#- A decision to suspend an employee requires prima facie grounds for believing serious misconduct and an objectively justifiable reason for excluding the employee from the workplace, and the employer bears the burden of proving it.
- There is no inherent right to suspend an employee without pay; any such power must arise from the terms of the contract.
- In a claim of unfair termination, the employee bears the initial burden of proof, which shifts to the employer to justify the grounds and the procedural fairness of the termination.
- Procedural fairness embodies notification, hearing and consideration, and the hearing component is incomplete where the employee is denied adequate material to prepare a defence.
- Anticipatory earnings to retirement age are not payable as damages for wrongful termination because no employment is permanent.
Court orders
#- 1.Declaration that the termination of the Claimants' employment was unfair and unlawful
- 2.1st Claimant to be paid one month's salary in lieu of notice (Kshs. 170,000/-)
- 3.1st Claimant to be paid compensation for unfair termination being 3 months' gross salary (Kshs. 510,000/-)
- 4.1st Claimant to be paid the withheld half salary for the 13 months of suspension
- 5.2nd Claimant to be paid one month's salary in lieu of notice (Kshs. 162,000)
- 6.2nd Claimant to be paid compensation for unfair dismissal (Kshs. 810,000)
- 7.2nd Claimant to be paid the withheld half salary for the 13 months of suspension
- 8.Interest on the above at court rates from the date of judgment until payment in full
- 9.Respondent to pay costs of the suit
- 10.Respondent to issue the Claimants certificates of service within 30 days of the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment disputes; reliefs anchored on sections 35, 36, 41, 43, 45, 49 and 51 of the Employment Act, 2007 and Articles 41, 47 and 50 of the Constitution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kioi v Consolidated Bank of Kenya Limited (Cause 1982 of 2015 & 1381 of 2016 (Consolidated)) [2024] KEELRC 1143 (KLR)", Case Analysis (2024). ELRC Cause No. 1982 of 2015 (consolidated with ELRC Cause No. 1381 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1143/eng@2024-04-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.