Akala v Kenya Commercial Bank Limited (Cause 1569 of 2018) [2025] KEELRC 1724 (KLR)
The bottom line
#A Kenyan bank must pay a former director Kshs. 9.3 million after the Employment Court found his dismissal unfair because he never saw the full audit report against him.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the termination
Termination was procedurally unfair: the Claimant was not supplied with the complete Forensic Audit Report, was not informed of his right to be accompanied, and the hearing was a mere formality.
Section 41 of the Employment Act sets mandatory minimum standards: explanation of grounds in a language the employee understands, the reason for contemplated termination, entitlement to a companion, and hearing of representations. The Respondent's own witnesses admitted the Claimant received only excerpts of the report and was never informed of his right to representation. Selective disclosure of the central adverse material prevented meaningful preparation of a defence, so the process fell fundamentally short of Section 41.
Substantive justification of the termination
Termination was substantively unfair; the Respondent failed to prove the Claimant's guilt or reasonable grounds for the allegations.
Under the Burchell test, the employer must show it believed the employee guilty, had reasonable grounds for that belief, and conducted as much investigation as was reasonable. The Forensic Audit Report that anchored the termination did not recommend disciplinary action against the Claimant, and all three of the Respondent's witnesses conceded the report did not implicate him. The Respondent therefore failed to discharge the burden under Sections 43, 45(2) and 47(5).
Reliefs: compensation, reinstatement and claimed salary/notice payments
Seven months' salary awarded as compensation; reinstatement, suspended salary and notice pay refused.
Considering length of service (since 2011) and prospects of comparable employment, seven months' gross salary was deemed sufficient compensation under Section 49. Reinstatement was time-barred by the 3-year rule in the Employment and Labour Relations Court Act, the Claimant having been out of service close to 7 years. Payment claims for the suspension period and notice failed because those sums were included in the Kshs.3,473,157.95/= terminal dues the Claimant admitted receiving.
Legal principles established
#- Section 41 of the Employment Act is mandatory; failure to comply renders a termination unfair.
- An employee facing disciplinary action must be supplied with the full and complete adverse investigative report in good time; selective disclosure undermines the right to be heard.
- The employer bears the burden of proving substantive justification under Sections 43, 45(2) and 47(5) of the Employment Act.
- Reinstatement under Section 49(4)(c) and (d) of the Employment Act is unavailable where the employee has been out of employment for more than 3 years.
Court orders
#- 1.A declaration that the Claimant's termination is unfair.
- 2.An order that the Claimant be paid Seven (7) months' salary as compensation for the unfair termination at Kshs.9,300,851/- subject to statutory deductions.
- 3.The Respondent shall bear the costs of the suit and interest on the compensation from the date of judgment until payment in full.
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 and the Employment and Labour Relations Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Akala v Kenya Commercial Bank Limited (Cause 1569 of 2018) [2025] KEELRC 1724 (KLR)", Case Analysis (2025). Statement of Claim dated 29th November, 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/1724/eng@2025-06-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.