Ojiambo & 2 others v Diamond Trust Bank (Cause 1608 of 2017) [2024] KEELRC 2735 (KLR)
The bottom line
#A Kenyan court ruled three bank employees were fairly dismissed for misconduct, but the bank's flawed disciplinary process made the dismissals procedurally unfair, entitling them to compensation.
What this practically means
#Executive summary
#Key legal issues
#Unionisability and applicability of the CBA to non-unionised employees
The Claimants were unionisable junior employees and the CBA bound the Respondent, whose terms had to be incorporated into their contracts as they were more favourable.
Section 2 of the Labour Relations Act defines a unionisable employee; Section 59(1)(b) binds all unionisable employees of an employer party to a collective agreement and Section 59(3) incorporates its terms into contracts of employment. Section 26(2) of the Employment Act requires more favourable terms to apply. The Respondent never alleged the Claimants were not unionisable and adduced no evidence that it informed them of the CBA or its changes.
Retrospective operation of the CBA
The CBA did not operate retroactively; claims predating it cannot be sustained under it.
Clause A2 of the CBA fixed its duration at 24 months commencing 1st March 2013. CWI confirmed there was no other CBA on record and no credible evidence of any agreement for retrospective application. Claims predicated on CBA terms for periods predating the CBA were contradictory and unenforceable.
Substantive fairness of the summary dismissal
The Respondent had a valid and fair reason - the Claimants' gross misconduct in requisitioning cartridges for non-existent printers.
Applying Sections 43 and 45(2) of the Employment Act and the balance-of-probabilities standard, the uncontroverted investigation report and the Claimants' own admissions on cross-examination showed they requisitioned cartridges for non-existent printers in collusion with John Keya. Their conduct constituted gross misconduct entitling summary dismissal under Section 44.
Procedural fairness of the summary dismissal
The dismissal was procedurally unfair for non-compliance with Section 41 of the Employment Act.
The alleged minutes of the disciplinary hearing were unsigned, unauthenticated, identical to each other, erroneously numbered and of no evidential value. No invitation letters were produced, the investigation report was not shown to have been availed, the dismissal letters made no reference to any hearing and were silent on the right to appeal contrary to the HR Manual.
Suspension pending investigation
The suspensions were not shown to be unlawful.
Suspension pending investigation is integral to the disciplinary process per Mary Chemweno Kiptui V Kenya Pipeline and Charles Muturi Mwangi V Invesco Assurance. Paragraph 3.7.3 of the HR Manual permitted suspension at half pay to facilitate investigations, and the Claimants adduced no evidentiary proof of its unlawfulness.
Entitlement to compensation and CBA-based reliefs
Each Claimant was awarded the equivalent of two months' gross salary as compensation, the difference between CBA rates and actual pay from 1st March 2013 to 18th November 2014, and 3 days' annual leave pay.
Procedural unfairness attracted compensation under Section 49(1)(c). Weighing length of service, absence of prior warnings, the Claimants' substantial contribution to their dismissal and lack of appeals, two months' gross salary was fair. CBA-differential salary, house allowance and leave allowance were awarded for the CBA period only.
Legal principles established
#- Terms of a collective agreement are incorporated into the contracts of employment of every unionisable employee covered by it, even if not a union member.
- The reason for termination is what the employer genuinely believed to exist at the time, tested on a balance of probabilities and within a band of reasonable responses.
- Unsigned and unauthenticated minutes of a disciplinary hearing lack authorship and are of no evidential value in proving procedural fairness.
- An employer who fails to prove compliance with Section 41 of the Employment Act has not conducted a fair procedure.
- A claim for overtime is a continuing wrong under Section 90 of the Employment Act and must be made within 12 months of cessation thereof.
Court orders
#- 1.Declaration that the summary dismissal of the Claimants by the Respondent was procedurally unfair.
- 2.Equivalent of 2 months gross salary as compensation for each Claimant.
- 3.The difference between the amount payable under the CBA and the salary and house allowance paid from 1st March, 2013 to 18th November, 2014, to be computed by Counsel and filed within 30 days for adoption.
- 4.Payment for 3 days annual leave each for the duration of the CBA.
- 5.The difference between the leave allowance paid in 2013 and November 2014 and the amount payable under the CBA, to be computed by Counsel.
- 6.Interest on the sum awarded at Court rates from the date of judgment.
- 7.50% costs of the suit.
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court under the Employment Act and Labour Relations Act (specific enabling provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ojiambo & 2 others v Diamond Trust Bank (Cause 1608 of 2017) [2024] KEELRC 2735 (KLR)", Case Analysis (2024). Not stated in the judgment (Memorandum of Claim dated 28th July, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/2735/eng@2024-11-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.