Mwangi v Diamond Trust Bank (K) Limited (Cause 16 of 2019) [2025] KEELRC 2876 (KLR)
The bottom line
#A Kenyan bank employee won Kshs 564,080 after the court found his dismissal unfair, though his underpayment claim failed as time-barred.
What this practically means
#Executive summary
#Key legal issues
#Fair and valid reason for termination
The termination was substantively unfair; the reasons in the termination letter were general and unsubstantiated.
The termination letter alleged incompatibility and irreconcilable differences without specific incidents or examples. The show cause letter's absenteeism allegations were not among the reasons for termination. The Respondent adduced no evidence to substantiate the reasons, failing its burden under Sections 43(1) and 45(2)(a) and (b) of the Employment Act.
Procedural fairness
The termination was procedurally flawed and unlawful.
Although a show cause letter was issued and responded to, the hearing invitation letters did not inform the Claimant of his right to be accompanied under Section 41, and no minutes or proceedings of the 17th November 2017 hearing were produced. The Respondent thus failed to discharge its burden under Section 45(2)(c).
Scope of the CBA
The CBA applied to the Claimant despite his non-union membership.
Clause A1 covered unionisable employees including the Claimant's category; Section 59(1)(b) of the Labour Relations Act binds all unionisable employees, and Section 59(3) deems CBA terms incorporated into their contracts. The agency fee provision confirmed application to non-union members, upholding equal pay for work of equal value.
Limitation on underpayment claims
The underpayment claim was time-barred as a continuing injury claim.
Underpayment constituted a continuing injury under Section 89 of the Employment Act, requiring filing within twelve months of cessation. Employment ended on 21st November 2017, so the deadline was 21st November 2018; the suit filed on 15th January 2019 was statute-barred. The disturbance allowance claim, a single breach, fell within the three-year period and succeeded.
Disturbance allowance
The Claimant was entitled to two months' basic salary as disturbance allowance under Clause AB30(ii) of the CBA.
The CBA provides for a disturbance allowance equivalent to two months' basic salary for an employee permanently transferred between branches outside the same town. No evidence showed the allowance was paid on the transfer to Lamu, so the claim succeeded.
Legal principles established
#- An employer bears the burden under Sections 43 and 45(2)(a) and (b) of the Employment Act to prove valid and fair reasons for termination, and general allegations devoid of specific particulars fail to discharge that burden.
- A CBA is binding on all unionisable employees of the parties, and its terms are deemed incorporated into their contracts of employment under Section 59 of the Labour Relations Act, including non-union members who benefit via agency fees.
- Claims founded on a continuing injury must be instituted within twelve months of cessation of the injury under Section 89 of the Employment Act.
- Failure to inform an employee of the right to be accompanied at a disciplinary hearing and absence of proof the hearing took place breaches Section 41 of the Employment Act.
Court orders
#- 1.A declaration is issued that the termination of the Claimant's employment was unfair and unlawful
- 2.The Claimant is awarded compensatory damages of Kshs 429,810.00 being six (6) months of the gross salary he was entitled to under the CBA at the time of termination
- 3.The Claimant is awarded Kshs 134,270.00 being disturbance allowance equivalent to two months of the basic salary he was entitled to under the CBA
- 4.The total award is Kshs 564,080.00
- 5.Interest on the amount in (d) [the disturbance allowance] at court rates from the date of Judgment until payment in full
- 6.The Claimant shall have the costs of the suit
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (specific constitutional/statutory basis not stated)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwangi v Diamond Trust Bank (K) Limited (Cause 16 of 2019) [2025] KEELRC 2876 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2876/eng@2025-10-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.