Co-operative Bank of Kenya Limited v Ojwang (Civil Appeal 278 of 2019) [2024] KECA 1265 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a bank employee's negligence causing a Kshs 32 million loss justified summary dismissal, even though he was later acquitted criminally.
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 Bank was justified in summarily terminating the respondent's employment and whether the learned Judge erred in substituting the summary dismissal with normal termination
- 2.Whether the termination was procedurally sound
- 3.The relief(s), if any, to which the respondent is entitled
- 4.Whether the Judge erred in failing to consider the Bank's counterclaim
Key legal issues
#Whether the respondent's negligent conduct as vault co-custodian justified summary dismissal
Yes. The respondent's negligence contributed to the loss, a ground under Section 44(4)(c) justifying summary dismissal; the Bank's response was a reasonable and proportionate response within the band of reasonable responses.
The court re-appraised the evidence and found that the respondent, as Operations Manager and vault co-custodian, was responsible for authenticating vault transactions and acknowledged that money was removed irregularly without a cheque or instructions. His negligent conduct contributed to the loss of over Kshs. 32 million. The criminal acquittal was irrelevant. The position of vault custodian is one of trust, and summary dismissal fell within the range of reasonable responses of a reasonable employer.
Whether the termination procedure was fair under Section 41 of the Employment Act
Yes. The respondent was suspended, given a show-cause letter with clearly particularised charges, responded, and was heard by a disciplinary committee; the process accorded with the demands of Section 41.
The court traced the process: suspension on 25th March 2013, show-cause letter dated 15th April 2013 setting out and particularising the charges, the respondent's reply of 18th April 2013, and a disciplinary hearing on 9th May 2013 at which the same charges were levelled. The respondent did not complain at trial about the process, and the four elements of procedural fairness identified in Oyombe vs Eco Bank were met.
Whether the Judge erred in failing to consider the Bank's counterclaim
The ground failed because the counterclaim was withdrawn in the trial court on 14th July 2017, leaving the trial Judge with no basis to return to it.
The record showed counsel for the Bank informing the trial court on 14th July 2017 that he had instructions to withdraw the counterclaim as the claimant had satisfied the liabilities, and the court marking the counterclaim as withdrawn with costs to be addressed in submissions. The counterclaim having been withdrawn, the trial Judge could not determine it, and the Bank could not resurrect the point on appeal.
Legal principles established
#- A tribunal adjudicating the fairness of dismissal must apply the range of reasonable responses test and not substitute its own view for that of the employer
- An employee need not be convicted of a criminal offence for gross misconduct to be established; reasonable and sufficient grounds of suspicion suffice
- Section 44(4)(c) of the Employment Act justifies summary dismissal where an employee carelessly and improperly performs work it was his duty to perform carefully and properly
- Section 41(2) of the Employment Act sets the minimum threshold of a fair procedure before summary dismissal
- A first appellate court must reconsider and re-evaluate the evidence and draw its own independent conclusions
Court orders
#- 1.The judgment of the ELRC dated and delivered on 24th January 2019 is set aside in its entirety
- 2.The Respondent's cross appeal is dismissed
- 3.The Bank shall have the costs of the proceedings before the ELRC as well as the 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 at Kisumu
- ELRC Cause No. 43 of 2016
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal Rules, 2022 (Rule 31(1)(a)); appeal from the Employment and Labour Relations Court
Relief refused
#Respondent's cross-appeal claim for 12 months' salary compensation and a finding of unfair termination
The termination was both substantively justified and procedurally fair; the respondent was therefore not entitled to any reliefs
Bank's counterclaim of Kshs. 3,474,471.00 (raised as a ground of appeal)
The counterclaim had been withdrawn in the trial court and the trial Judge had no basis to return to it
Costs
The Bank shall have the costs of the proceedings before the ELRC as well as the 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.
In conclusion, the appeal succeeds to the extent that the judgment of the ELRC dated and delivered on 24th January 2019 is hereby set aside in its entirety. The Respondent's cross appeal fails and is hereby dismissed.
The Bank shall have the costs of the proceedings before the ELRC as well as the costs of this appeal.
The position of a vault custodian in a bank is undoubtedly a position of trust, a critical component in banking, and the response by the Bank to summarily terminate the respondent's employment was in our view a reasonable and proportionate response which any reasonable employer might have adopted.
Reasonable and suficient grounds to suspect that a criminal ofience has been committed to the detriment of the employer sufices to demonstrate or establish gross misconduct
It follows, based on the foregoing, that the respondent was not entitled to any reliefs.
Issues in the judgment
#The judgment states the counterclaim amount as Kshs. 3,474,741.00 in paragraph 2 but Kshs. 3,474,471.00 elsewhere (paragraphs 10, 13 and 41), an internal discrepancy in the figure.
The judgment does not state the appeal case number of this Court; only the originating ELRC Cause No. 43 of 2016 is identified, and the coram is given without explicit bench roles beyond 'JUDGE OF APPEAL'.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Co-operative Bank of Kenya Limited v Ojwang (Civil Appeal 278 of 2019) [2024] KECA 1265 (KLR)", Case Analysis (2024). Civil Appeal (Kisumu). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1265/eng@2024-09-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.