Patrick Nyakonu Ombati v Credit Bank Limited [2016] KECA 730 (KLR)
The bottom line
#A Kenyan bank wrongly sacked its accountant, but the Court of Appeal awarded only one month's notice pay and a certificate of service.
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 termination of the appellant's employment was wrongful
- 2.Whether the claims stipulated in the memorandum of claim are payable
Key legal issues
#Whether the summary termination was lawful under the repealed Employment Act
The termination was unlawful as it contravened the appointment letter, entitling the appellant to one month's salary in lieu of notice, though the employer was not obliged to state reasons under the then-applicable law
The appointment letter permitted termination on one month's notice or payment in lieu, reserving summary dismissal for gross misconduct. Although the repealed Employment Act did not require reasons to be stated, the employer terminated with immediate effect without invoking the summary dismissal clause validly, hence breaching the contract and entitling the employee to one month's salary in lieu of notice only.
Scope of remedies for wrongful dismissal under the repealed Employment Act
The sole pecuniary remedy is salary for the contractual notice period; claims for lost future earnings, exemplary damages and the like are not available
Relying on prior decisions of the Court (Central Bank of Kenya v Nkabu, Githinji v Mumias Sugar, Rift Valley Textiles v Oganda), the court held that wrongful dismissal under the repealed Act attracted only notice-period salary. Claims for salary during the criminal case, 24 months' special damages, loss up to retirement and punitive damages had no legal basis and were correctly rejected by the trial court.
Whether the appellant proved malicious prosecution and racial discrimination
Both claims failed for want of proof of the required elements
The court restated the four elements of malicious prosecution from Murunga v Attorney General and found the appellant did not establish absence of reasonable and probable cause or malice. The respondent merely reported the alleged fraud to the Banking Fraud Investigations Unit, which independently investigated and preferred charges, and there was no evidence of racial discrimination.
Entitlement to a certificate of service
The appellant was entitled to a certificate of service under section 18(1) of the repealed Employment Act
The trial court had not pronounced itself on this claim and the respondent did not appear to oppose it. The court found the statutory entitlement engaged and ordered issuance forthwith, this being one of the two respects in which the appeal succeeded.
Legal principles established
#- Under the repealed Employment Act an employer was not obliged to give reasons for terminating employment, provided one month's notice or salary in lieu was given
- Where an employer terminates employment with immediate effect contrary to the contractual notice period, the remedy is salary in lieu of the contractual notice period only
- Every employee is entitled to a certificate of service upon termination unless employment lasted less than four consecutive weeks
Court orders
#- 1.The respondent to pay the appellant Kshs.92,286/= being one month's salary in lieu of notice
- 2.The respondent to issue the appellant a certificate of service forthwith
- 3.The rest of the grounds of appeal dismissed
- 4.Each party to bear its own costs of the suit and the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Kisumu (sitting as Industrial Court)
- Industrial Court Claim No. 105 of 2013
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court/Industrial Court (Industrial Court Claim No. 105 of 2013)
Relief refused
#Salary in lieu of reasonable notice beyond one month (Kshs.1,661,148/=)
Under the repealed Employment Act the remedy for wrongful dismissal is limited to salary for the contractual notice period
Unpaid salary for February 2006 (Kshs.17,959/=)
Not proved; appellant failed to produce his bank statement for February 2006
Loss of salary for the period the criminal case was pending, special damages for wrongful termination, loss of employment up to retirement, punitive/exemplary damages, and loss of salary up to retirement age
No basis in law
Pension claim of Kshs.399,234/=
Pension funds from Kenindia Assurance had already been credited to the appellant's account
Damages for racial discrimination (Kshs.2,000,000/=) and malicious prosecution (Kshs.700,000/=)
Insufficient evidence; the respondent did not determine who to charge and the elements of malicious prosecution were not established
Costs
Each party bears its own costs of the suit and the appeal
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.
we hold that the respondent's termination of the appellant's employment was unlawful as it contravened the terms set out in his appointment letter
under the repealed Employment Act the remedy for wrongful dismissal is such salary as an employee would have earned for the period of notice as stipulated in the Appointment Letter
since no appeal was filed against that ruling, the issue does not fall for determination in this appeal
We find and hold that the appellant is entitled to a certificate of service and we order the respondent to issue the same forthwith.
As regards costs of the suit and this appeal, we direct that each party bears its own costs.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Evanson Jidraph Kamau Waitiki v Kenya Power & Lighting Company Ltd [2017] KECA 526 (KLR)[2017] KECA 526 (KLR)11 May 2017applied
Cite this brief
#Cite this brief
Caselaw, "Patrick Nyakonu Ombati v Credit Bank Limited [2016] KECA 730 (KLR)", Case Analysis (2016). Civil Appeal No. 9 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/730/eng@2016-03-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.