Cooperative Bank of Kenya Limited v Banking Insurance & Finance Union (K) [2017] KECA 136 (KLR)
The bottom line
#Kenya's Court of Appeal upheld a bank employee's dismissal, ruling that breaching trust and integrity at work can justify summary dismissal.
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 learned Judge erred in finding that there was no valid reason for the dismissal of the grievant, Samuel C. Njoroge
- 2.Whether the dismissal was procedurally unfair, including on the grounds of discrepancy in the amount alleged, the choice of union representative at the disciplinary hearing, and the alleged appeal against dismissal
- 3.Whether the learned Judge misapprehended the application of the remedies under Section 49(4) as read with Section 50 of the Employment Act, including reinstatement and damages
Key legal issues
#Whether there was a valid and justifiable reason for the summary dismissal of the grievant
Yes. The grievant signed a reconciliation form showing a cash difference of Kshs.7,000 when the actual difference was far larger, and admitted non-compliance with the dual custody requirements of the operations manual. His conduct went to the core of the employment relationship founded on mutual trust and integrity, which is cardinal in a bank.
Applying the band-of-reasonableness approach from British Leyland via Shollei and the contextual test in McKinley, the Court held that the grievant's conduct called into question his integrity and reliability given the nature of the banking business. The employer's disciplinary code classified failure to account for monies and signing false entries as gross misconduct attracting summary dismissal, and the Court declined to substitute its view of the sanction for that of the employer, following Nampak Corrugated Wadeville v Khoza.
Whether the disciplinary process was procedurally unfair as to the charges and representation
No. The discrepancy between the Kshs.531,000 in the suspension letter and Kshs.636,000 in the notice to show cause was immaterial because the charge was facilitation and concealment, not embezzlement; the grievant was represented by a union official of whom he made no complaint; and no appeal against dismissal was established.
The Court found the nature of the charge was clear in the suspension letter, notice to show cause and hearing invitation, so the grievant could prepare his defence. No evidence showed the union official was imposed or represented him ineffectively. The grievant conceded in cross-examination that the appeal was unsigned and unsure it reached the employer, so the benefit of doubt went to the employer.
Whether the ELRC remedies of reinstatement and damages were properly granted
No. Since the dismissal was justified, the trial court's reinstatement and damages orders, said to be grounded on Sections 49(4) and 50 of the Employment Act, could not stand and the suit was dismissed.
The remedies issue fell away once the Court found a valid reason and fair procedure. The Court noted the appellant's submission that damages under Section 49(1)(c) are capped at twelve months' salary and that remedies are discretionary, but did not need to decide the ceiling because the entire judgment below was set aside and the suit dismissed.
Legal principles established
#- In a claim of wrongful or unfair dismissal, the burden of proving that the dismissal was wrongful rests on the employee, while the burden of justifying the grounds of dismissal rests on the employer; it is a shared burden, and the court examines both the validity of the reasons for termination and procedural fairness.
- An employer's dismissal decision is tested against a band of reasonableness: if it was quite reasonable for the employer to dismiss, the dismissal must be upheld as fair even if other employers might not have dismissed.
- A court should not lightly interfere with an employer's choice of disciplinary sanction unless the employer acted unfairly in imposing it; the question is whether the sanction was reasonable in the circumstances.
- The choice of a representative under Section 41 of the Employment Act belongs to the employee, and where the employee is in fact represented by a union official and raises no complaint, the employer cannot be faulted absent evidence of imposition or ineffective representation.
Court orders
#- 1.Appeal allowed
- 2.Trial court's judgment dated 19th May, 2015 set aside and substituted with an order dismissing the respondent's suit in the ELRC
- 3.Appellant to have costs of the suit in the ELRC
- 4.Appellant to have costs of this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- E.L.R.C. Cause No. 1982 of 2013
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal Rules (appeal from the ELRC; Rule 86(1) of the Court of Appeal Rules referenced)
Relief refused
#Reinstatement of the grievant and payment of salaries and allowances from the date of dismissal as ordered by the ELRC
The Court found there was a valid reason for the dismissal and that the sanction was within the employer's discretion, so the trial court's remedial orders fell with the judgment
Costs
The appellant shall have costs of the suit in the ELRC and costs of this 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 set aside the trial court’s judgment dated 19th May, 2015 and substitute the same with an order dismissing the respondent’s suit in the ELRC with costs. The appellant shall also have costs of this appeal.
Samuel’s conduct clearly went into the core of the employment relationship which was based on mutual trust. It was such that it could not be ignored or wished away because it called into question Samuel’s integrity and reliability which is cardinal taking into account the nature of the appellant’s business.
under Section 47(5) of the Employment Act the burden of proving that the dismissal was wrongful rests on the employee, while the burden of justifying the grounds of wrongful dismissal rests on the employer. It is a shared burden
There is a band of reasonableness with which one employer may reasonably take one view; another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on.
The question is not whether it could have imposed the sanction imposed by the employer, but whether in the circumstances of the case the sanction was reasonable.
There was no evidence that the said union official had been forced on Samuel simply because the same was never raised during the disciplinary hearing.
Issues in the judgment
#The ELRC orders as reproduced in the judgment contain an internal date inconsistency, stating the reinstatement and salary orders were made on '19th of May 2010' although the judgment below is dated 19th May, 2015.
The notice to show cause reproduced in the judgment contains typographical errors ('difference o Kshs. 7000' and 'makes on signs a statement') and a figure of Kshs.636,000 that differs from the Kshs.531,000 stated in the suspension letter, a discrepancy the Court itself noted.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (3)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Mary Pamela Wanga v Shamrock (K) Limited [2021] KEELRC 1095 (KLR)[2021] KEELRC 1095 (KLR)13 Aug 2021
- George Karanja Ngunda v Meru Water and Sewerage Services (MEWASS) Registered Trustees & 3 others [2021] KEELRC 1939 (KLR)[2021] KEELRC 1939 (KLR)23 Mar 2021
- Joseph Odongo Owando v Marie Stopes Kenya [2020] KEELRC 1700 (KLR)[2020] KEELRC 1700 (KLR)7 Feb 2020
Cite this brief
#Cite this brief
Caselaw, "Cooperative Bank of Kenya Limited v Banking Insurance & Finance Union (K) [2017] KECA 136 (KLR)", Case Analysis (2017). Civil Appeal No. 293 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/136/eng@2017-12-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.