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ELRCDismissedELRC No. 2364 of 2017· [2024] KEELRC 1263 (KLR)

Kilumbi v Barclays Bank of Kenya Limited (Cause 2364 of 2017) [2024] KEELRC 1263 (KLR)

Employment and Labour Relations Court
16 May 2024
LNLinnet Ndolo
3,347 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled a bank fairly fired a branch manager who released funds he himself had flagged as suspicious money laundering.

What this practically means

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Executive summary

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The Claimant, a Branch Manager at the Respondent Bank's Rahimtulla Branch, was terminated on 16th June 2016 after authorising a Kshs. 14,000,000 over-the-counter cash withdrawal on 25th April 2016 to a customer whose account was later found to be a suspected conduit for money laundering. The Claimant had raised the alarm with the Financial Crime Unit and escalated the matter to the Money Laundering Reporting Officer, who on 22nd April 2016 told him to 'serve the customer in the normal manner', but at 1426 HRS on the payment day instructed him not to pay - by which time the funds had already been released at 1330 HRS. The Claimant sought declarations of unlawful and unfair termination, aggravated damages, 12 months' compensation, severance pay for 24 years, notice pay and a certificate of service; the Respondent counterclaimed for reimbursement of any regulatory penalty. The court applied the reasonableness test from Galgalo Jarso Jillo v Agricultural Finance Corporation and found the employer had a valid reason: the Claimant, having himself flagged the suspicion, 'failed the test of a steadfast banker'. Procedurally, following Kenya Plantation Workers Union v Eastern Produce, the absence of a show cause notice was not fatal, and section 41 requirements were met. The disguised redundancy allegation was rejected. The entire claim was dismissed with each party bearing their own costs.

Key legal issues

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01

Whether the employer had a valid reason for termination

Holding

The employer had a valid reason - the Claimant failed the test of a steadfast banker by paying out suspected money laundering funds after escalating the matter

Reasoning

Applying the reasonableness test under section 43 of the Employment Act, the court found the Claimant began well by reporting to the Financial Crime Unit and escalating to the MLRO, but crumpled under customer pressure and released the funds. The disguised redundancy allegation was rejected. The employer's genuine belief in the misconduct sufficed for substantive justification.

p. 7
02

Whether procedural fairness under section 41 of the Employment Act was observed

Holding

Procedural fairness was met notwithstanding the absence of a show cause notice, as the Claimant had adequate notice of the charges and an opportunity to be heard

Reasoning

The Claimant gave a written explanation, was suspended with full pay, was invited to a disciplinary hearing with rights to representation and to make representations, which he exercised. The court adopted authority that a notice to show cause is not mandatory unless the contract or HR policy requires it. The Claimant also had an unexercised right of appeal.

p. 8
03

Whether the Respondent's counterclaim was established

Holding

The counterclaim is not expressly determined in the judgment's final orders

Reasoning

The court framed the counterclaim as an issue for determination but the final orders only dismiss the Claimant's claim and address costs; no declaration of entitlement to reimbursement from the Claimant is made in the disposition.

p. 8

Legal principles established

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  • An employer need only have a genuine and reasonable belief in the grounds for termination at the time of the decision
  • Failure to issue a show cause notice is not fatal to the fairness of a disciplinary process

Court orders

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  1. 1.The Claimant's entire claim fails and is dismissed
  2. 2.Each party will bear their own costs
  3. 3.Orders accordingly

Authorities

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Legislation

  • Employment Actsection 43
  • Employment Actsection 41
  • Employment Actsection 42(1)
  • Employment Actsection 44(3) and (4)

Cases cited (2)

  • Galgalo Jarso Jillo v Agricultural Finance Corporation
    [2021] eKLR
  • Kenya Plantation Workers Union v Eastern Produce (K) Limited
    [2022] KEELRC 1302 (KLR) (21 July 2022) (Judgment)
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and Article 162(2) of the Constitution (employment dispute)

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, "Kilumbi v Barclays Bank of Kenya Limited (Cause 2364 of 2017) [2024] KEELRC 1263 (KLR)", Case Analysis (2024). ELRC No. 2364 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1263/eng@2024-05-16

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