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ELRCPartially AllowedCause No E630 of 2022· [2024] KEELRC 1823 (KLR)

Ochieng v NCBA Bank Kenya PLC (Cause E630 of 2022) [2024] KEELRC 1823 (KLR)

Employment and Labour Relations Court
12 July 2024
SRSTELLA RUTTO
4,250 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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This was a first-instance employment claim before the Employment and Labour Relations Court at Nairobi, decided by Stella Rutto, J, on 12th July 2024. The Claimant, a former NIC Bank employee on permanent and pensionable terms from 2nd July 2014, claimed Kshs 2,296,770.00 as compensatory damages for unfair termination, severance pay, accrued leave for 2019, one month's pay in lieu of notice, and damages for discrimination and harassment, following the merger of NIC Bank and CBA into NCBA Bank. The Respondent contended that a tripartite agreement transferred employees on comparable terms; the Claimant alone rejected the offer and resigned by conduct. The court framed four issues: whether the Claimant was terminated; if so, whether the termination was fair and lawful; whether there was discrimination and harassment; and entitlement to reliefs. It first rejected the Claimant's technicality-based application to strike out the defence for lack of authority. On the merits, applying Section 47(5) of the Employment Act and Pius Machafu Isindu, the court held that the Claimant failed to prove the fact of termination: he rejected the offer by email citing remuneration expectations, cleared with NIC Bank citing personal interests, and thereby exited employment voluntarily. The discrimination claim was unsubstantiated, and demands to repay his defaulted staff loan were not harassment. Only accrued leave pay under Section 28 was awarded, prorated at Kshs 91,870.80 with interest at court rates from the date of judgment. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the Claimant was terminated from employment

Holding

No. The Claimant rejected the Respondent's offer of employment on comparable terms, cleared with NIC Bank and exited voluntarily; the burden under Section 47(5) of proving termination was not discharged.

Reasoning

The dispute arose from the NIC Bank-CBA merger. The Claimant admitted in cross-examination that he was offered employment and rejected it. His email of 30th September 2019 rejected the offer solely over remuneration expectations, and his Exit Interview Form cited personal interests. Citing Section 47(5) of the Employment Act and Pius Machafu Isindu, the court held the employee must first prove the fact of termination; the Claimant failed, so the unfair termination claim collapses.

p. 7
02

Whether there was discrimination and harassment

Holding

No. The discrimination claim was unsupported by evidence, and loan recovery demands on a defaulted staff loan cannot constitute harassment.

Reasoning

Relying on Barclays Bank of Kenya Ltd & Another v Gladys Muthoni, the court held that a discrimination claim must be supported by evidence. The Claimant admitted in cross-examination he had no evidence of discrimination, and he was offered comparable terms. On harassment, the staff loan terms could not subsist after he rejected the new offer, and the Respondent, having taken over the loan, was entitled to demand repayment.

p. 7
03

Whether the Claimant was entitled to accrued leave pay

Holding

Yes. Leave pay is an independent statutory entitlement regardless of the manner of exit, prorated at Kshs. 91,870.80 because the Respondent failed to avail leave records.

Reasoning

Section 28 of the Employment Act entitles an employee to leave, and Section 74(1)(f) obliges the employer to keep leave records. Since the Respondent did not avail the Claimant's leave records, leave pay was computed on a prorated basis for leave earned while employed by NIC Bank.

p. 8
04

Whether the Respondent's pleadings should be struck out for lack of authority of counsel and RW1

Holding

No. The argument was a technicality contrary to Article 159(2)(d) of the Constitution, and the authorities cited related to institution, not defence, of suits.

Reasoning

The Claimant urged striking out the defence on authority grounds. The court found the argument anchored on mere technicalities not affecting the substance of the suit, contrary to the overriding objective in Article 159(2)(d), and dismissed it before proceeding to the merits.

p. 5

Legal principles established

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  • Under Section 47(5) of the Employment Act, the employee bears the burden of proving that unfair termination or wrongful dismissal occurred before the employer is called upon to justify the grounds of termination
  • An employee who rejects an offer of employment on comparable terms following a transfer of undertakings and exits employment cannot claim unfair termination
  • Accrued leave pay is an independent statutory entitlement under Section 28 of the Employment Act regardless of the manner of exit, and where the employer fails to avail leave records under Section 74(1)(f), leave pay is to be prorated in the employee's favour

Court orders

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  1. 1.Claim of unfair termination dismissed as unproved; it collapses
  2. 2.Judgment entered for the Claimant only in respect of accrued leave pay, prorated at Kshs. 91,870.80
  3. 3.Interest on the awarded amount at court rates from the date of Judgment until payment in full
  4. 4.Each party to bear their own costs

Authorities

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Legislation

  • Employment ActSection 40(1)(a)
  • Employment ActSection 45(2)(c)
  • Employment ActSection 5(3) and (7)
  • Employment ActSection 47(5)
  • Employment ActSection 43(1)
  • Employment ActSection 28
  • Employment ActSection 74(1)(f)
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure RulesOrder 21 Rule 1
  • Civil Procedure ActSection 1B

Cases cited (5)

  • Janine Buss vs Gems Cambridge International School Limited
    (2016) eKLR
  • Geeta Joshi vs Pandya Memorial Hospital
    (2019) eKLR
  • Elizabeth Washeke & 62 others vs Airtel Networks (K) Limited & Another
    (2013) eKLR
  • Pius Machafu Isindu vs Lavington Security Guards Limited
    [2017] eKLR
  • Barclays Bank of Kenya Ltd & Another vs Gladys Muthoni & 20 Others
    [2018] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over employment disputes (Employment Act; Employment and Labour Relations Court Act)

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, "Ochieng v NCBA Bank Kenya PLC (Cause E630 of 2022) [2024] KEELRC 1823 (KLR)", Case Analysis (2024). Cause No E630 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1823/eng@2024-07-12

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