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ELRCDismissedCause No. 621 of 2010

Banking Insurance & Finance Union (Kenya) v Kenya Commercial Bank Ltd [2014] KEELRC 1155 (KLR)

Industrial Court of Kenya
9 April 2014
3,064 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court upheld a barman's dismissal for failing to declare surplus stock, ruling that older employment disputes must be judged under the law in force at the time.

What this practically means

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Executive summary

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The claimant union, on behalf of grievant Nathan Launi Mugambi, claimed wrongful termination of his employment as a Barman with Kenya Commercial Bank Ltd. The grievant was dismissed on 10th June 2005 after a surprise check on 9th March 2005 found him with an undeclared overage of 18 sodas, which he explained as a crate left over after he paid cash for an apparent shortage caused by a supervisor-requested transfer of a crate from the bar to the restaurant. The union sought reinstatement without loss of benefits, contending the termination breached the CBA, that no warning was issued, that the union was not involved, and that the respondent suffered no loss. The respondent maintained the grievant was untrustworthy, failed to account for stock, and was lawfully terminated under section 17 of the Employment Act Cap 226 (now repealed) and clause 5(d) of the CBA; it also opposed reinstatement on grounds of lost trust and the lapse of over nine years. The court held that the cause of action arose in 2005 under the repealed Employment Act Cap 226 and the CBA negotiated under it, and the claimant could not import the wrongful and unfair termination concepts of the Employment Act 2007. It found the grievant's failure to declare or receipt the overage breached the stringent accounting standards of his role, justifying termination, and that he received notice and terminal dues. The claim for reinstatement was dismissed, with each party to bear their own costs. Judgment was delivered at Nairobi on 9th April 2014 by M. Mbaru, J.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Was there wrongful termination of the grievant's employment terms?
  2. 2.Should the grievant be reinstated?

Key legal issues

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01

Whether the grievant's employment was wrongfully terminated

Holding

The termination was justified; the grievant failed to declare or receipt an overage of 18 sodas, contrary to the stringent accounting processes of his role and section 17 of the repealed Employment Act Cap 226

Reasoning

The grievant was found with an undeclared overage during a surprise check, gave an unsatisfactory explanation, and investigations by Mrs Kibiego found him culpable. He was given notice, terminal dues were paid, and his failure to declare the overage immediately breached the trust and diligence his role required under the CBA and the repealed Employment Act.

p. 5
02

Whether reinstatement should be ordered

Holding

Reinstatement was refused as the claimant had not established wrongful termination

Reasoning

Since the court found the termination justified, the sole relief sought - reinstatement without loss of benefits - could not issue. The claimant had sought no other orders, so the entire claim failed. Costs were not claimed and each party was left to bear its own costs.

p. 2
03

The applicable law where the cause of action arose under repealed legislation

Holding

A cause of action arising in 2005 under Employment Act Cap 226 (now repealed) must be assessed under that law and the governing CBA, not the Employment Act 2007

Reasoning

The cause of action arose in 2005 under the repealed Employment Act Cap 226 and a CBA negotiated under it. The claimant could not rely on concepts of wrongful and unfair termination under the 2007 Act to cure the limitations of the repealed regime, as that would defeat the parties' intentions when the CBA was negotiated.

p. 4

Legal principles established

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  • A claimant seeking wrongful termination under the repealed Employment Act Cap 226 cannot transplant protections of the Employment Act, 2007 regime onto a cause of action that arose under the repealed law
  • Parties are bound by their pleadings, which must clearly and specifically set out the facts constituting the cause of action
  • An employee who discovers an overage of stock must declare it immediately; failure to do so justifies termination under section 17 of the repealed Employment Act Cap 226

Court orders

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  1. 1.The claim for reinstatement of the grievant is dismissed/not granted
  2. 2.Each party to bear their own costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Industrial Court Act, section 20; dispute reported to the Minister under the Employment Act regime

Relief refused

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Reinstatement of the grievant (Nathan Launi Mugambi) without loss of benefits

The court found there was good justification for the termination of the grievant and the orders sought for reinstatement were not warranted

p. 5

Costs

Costs were not claimed; each party to bear their own costs

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

I therefore find good justification for the eventual termination of the grievant and therefore the orders sought for reinstatement are not warranted. This will not be granted. Costs were not claimed and will not be considered.
p. 5Final orders - dismissal of reinstatement claim and costs
It is now trite that parties are bound by their pleadings and not just sufficient to rely on Article 159 of the Constitution or section 20 of the Industrial Court Act to avoid a procedure that is stipulated by law.
p. 4Pleadings and cause of action
Even in a case of innocent overage, the same ought to have been declared immediately it was discovered otherwise the affected employee would not be acting in good faith to state that the keeping of the overage was for own consumption.
p. 4Employee duty to declare overage
To now seek application for a law that relate to what is now wrongful termination anf unfair termination is to avoid the essence of the protections that were under the repealed law and their limitations which cannot now be cured in this case.
p. 4Repealed law governs cause of action arising under it

Issues in the judgment

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minor

Judgment appears to contain a transcription/paragraph numbering anomaly - the two questions for determination appear between paragraphs 18 and 19 after a stray paragraph number '17.'

minor

Typographical errors within the judgment text (e.g. 'whiten submissions', 'anf unfair termination')

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Banking Insurance & Finance Union (Kenya) v Kenya Commercial Bank Ltd [2014] KEELRC 1155 (KLR)", Case Analysis (2014). Cause No. 621 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/1155/eng@2014-04-09

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.