Moreno v Credit Bank Limited (Cause 1366 of 2018) [2024] KEELRC 2371 (KLR)
The bottom line
#A Kenyan court upheld a bank employee's dismissal for negligence, confirming that written disciplinary hearings can satisfy fairness requirements in the digital age.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Claimant's termination from employment was unfair and unlawful
- 2.Whether the Claimant is entitled to the reliefs sought
Key legal issues
#Whether the termination was substantively fair
Yes - the Respondent had fair and valid reasons for the termination
The Claimant activated a dormant account and approved a mobile banking application without verifying with the customer, contrary to the bank's Procedure Manual, leading to a loss of Kshs 1,237,600. The mobile number used was not the customer's, and physical attendance of the customer was required in such circumstances. This amounted to gross misconduct and negligence, which section 44(4) of the Employment Act and the HR Manual permit summary dismissal for.
Whether the termination was procedurally fair despite absence of a physical disciplinary hearing
Yes - the hearing conducted by correspondence satisfied section 41 of the Employment Act
The Claimant was given two occasions to respond to the allegations - before internal security investigators and in response to the show cause letter - and did so comprehensively without complaining about inadequacy of information. Relying on the master-of-own-procedures principle, the court held that in the digital age a physical hearing is not mandatory; the test is whether a reasonable degree of fairness appropriate to the circumstances was achieved.
Whether the Claimant was entitled to compensation under section 49 of the Employment Act
No - having found the termination lawful and fair, the claim for 12 months' compensation failed
Both limbs of the fairness test were satisfied, so the foundation for compensation under section 49 fell away. The court also noted the Respondent itself was faulted for gaps in its mobile banking activation procedures, but held that the Claimant failed in her mandate to verify the application, and that someone had to be liable for the loss to the customer.
Legal principles established
#- For a termination to pass the fairness test there must be both substantive and procedural fairness.
- Decision-making bodies other than courts whose procedures are not laid down by statute are masters of their own procedures, provided they achieve the degree of fairness appropriate to their tasks.
- In the digital age, a physical disciplinary hearing is not mandatory; what matters is whether the employee was clearly informed of the charges, furnished with information, and given adequate opportunity to respond.
- Banking rules and procedures for handling customers' affairs must be strictly adhered to; negligence in performing official duties constitutes gross misconduct justifying summary dismissal under section 44(4) of the Employment Act.
Court orders
#- 1.The claim is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and the Employment Act (not expressly quoted)
Relief refused
#12 months' salary compensation for wrongful and unfair termination
The court found the Respondent had fair and valid reasons and followed a fair procedure in terminating the Claimant's services
Costs plus interest of the claim
The claim was found without merit and dismissed with costs to the Respondent
Costs
Claim dismissed with costs to the Respondent
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
It is now established requirement that for termination to pass fairness test there must be both substantive and procedural fairness.
in this digital age where even Court proceedings are being conducted virtually, physical attendance to meetings or sessions is no longer mandatory.
by not subjecting the claimant to an in-person disciplinary hearing did not vitiate the reasonable degree of fairness appropriate in the circumstances.
In conclusion this court finds and holds that the Respondent had fair and valid reasons for terminating the Claimant's service.
The claim is therefore found without merit and is hereby dismissed with costs
Issues in the judgment
#Internal inconsistency on dates of employment: the pleading and evidence conflict on when the Claimant was employed and dismissed
Typographical/date inconsistency: judgment dated 27th September 2024 while submissions dated May/June/July 2024 were filed after the pleaded events but the claim itself is dated August 2018; additionally the judgment header describes the judge as 'PRESIDING JUDGE-APPEALS DIVISION' in a first-instance claim
Inconsistent figures for the bank's loss/reimbursement - Kshs 1,237,600 as loss versus Kshs 1,142,861.92 reimbursed
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Moreno v Credit Bank Limited (Cause 1366 of 2018) [2024] KEELRC 2371 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2371/eng@2024-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.