Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELRCPartially AllowedCause No. 900 of 2012· [2018] KEELRC 46 (KLR)

Banking, Insurance & Finance (Kenya) v Consolidated Bank of Kenya Ltd [2018] KEELRC 46 (KLR)

Industrial Court of Kenya
20 December 2018
DMD. K. Njagi MareteMOMaureen Onyango
3,644 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~15 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
This was a first-instance referral to the Industrial Court of Kenya at Nairobi by the Banking, Insurance & Finance (Kenya) union against Consolidated Bank of Kenya Ltd over the dismissal of its member, Esther Nkirote, a subordinate-turned-supervisory employee at the bank's Laare branch, terminated on 1st March 2012 for negligence following fraudulent transactions on customer accounts. The union contended that the grievant, a junior unionisable officer without authority to authorise transactions, was selectively punished while the actual fraudster, an employee who disappeared, and negligent management staff were spared; that she was on leave during the 2009 fraud; and that she was never afforded a disciplinary hearing as required by section 41 of the Employment Act, 2007, nor proven reasons under section 43. The respondent denied the claim, asserting lawful termination after prior warnings, and also raised loan-contract matters, contending the court lacked jurisdiction over what it characterised as a debt recovery dispute. The court framed three issues: wrongfulness of termination, entitlement to relief, and costs. Relying on section 41(1) and the Mary Chemweno Kiptui authority, it found the grievant was never invited to a disciplinary meeting and her appeal was rejected unilaterally, rendering the termination a nullity; the reason of negligence was unproven. The court allowed the claim, awarding one month's notice pay (Kshs.67,303.00) and twelve months' salary (Kshs.807,636.00) as compensation, with alternative computation by the Commissioner of Labour, and ordered the respondent to bear the costs.

Key legal issues

#
01

Whether the termination of the grievant's employment was wrongful, unfair and unlawful

Holding

The termination was unlawful because the respondent did not afford the grievant a hearing under section 41(1) of the Employment Act and did not prove the reasons for termination under section 43

Reasoning

The court found that although a show cause letter was issued and answered, the grievant was never invited to a disciplinary meeting as required by section 41 of the Employment Act, 2007, and her appeal was rejected by a unilateral decision without an appeals committee. The reason of negligence was farfetched and unproven, and the respondent failed to comply with section 43 on notifying and ascertaining reasons. Procedural and substantive fairness having failed, the termination was a nullity and unlawful.

p. 5
02

Whether the grievant was entitled to the relief sought

Holding

Having proved unlawful termination, the claimant was entitled to relief: one month's notice pay and twelve months' salary as compensation

Reasoning

The court held that the claimant, having won on the case of unlawful termination of employment on a preponderance of evidence, became entitled to the relief sought. It quantified one month's salary in lieu of notice and twelve months' salary as compensation, with alternative computations pegged to the gross salary at termination.

p. 5
03

Whether the grievances of selective punishment, discrimination and victimisation undermined the termination

Holding

The court accepted the claimant's demonstration that the grievant, a junior unionisable officer without authority to authorise transactions, was selectively dismissed while other culpable employees were spared

Reasoning

The claimant showed that the fraud was perpetrated by an employee, Jacob Njuguna Ruriga, who disappeared, and that management staff who rubber-stamped the transactions per the audit report were not punished, while Florence Gikunda remained employed. The grievant was a junior unionisable officer with no authority to authorise transactions, making the dismissal an act of victimisation and selective punishment.

p. 4

Legal principles established

#
  • An employee must be taken through the mandatory procedural process under section 41 of the Employment Act before termination, whether by termination or summary dismissal
  • Termination without a hearing as prescribed under section 41(1) of the Employment Act is a nullity

Court orders

#
  1. 1.One month's salary in lieu of notice of Kshs.67,303.00
  2. 2.Twelve months' salary as compensation for unlawful termination of employment, Kshs.67,303.00 x 12 = Kshs.807,636.00
  3. 3.Alternatively, the amounts payable shall be pegged on the monthly gross salary of the grievant at the time of termination, should this be higher
  4. 4.In the event of any discrepancy between the gross salary and Kshs.67,303.00, the Letter of Confirmation of Appointment dated 20th January 2009 shall prevail in tabulation
  5. 5.The Commissioner of Labour shall, with the involvement of the parties, compute the amounts payable
  6. 6.Mention on 18th April 2019 for a report on computation by the Commissioner of Labour
  7. 7.The costs of the claim shall be borne by the respondent
Jurisdiction invoked
Referral following conciliation before the Minister of Labour under the Labour Relations Act; dispute over unfair/unlawful dismissal from employment

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (14)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Banking, Insurance & Finance (Kenya) v Consolidated Bank of Kenya Ltd [2018] KEELRC 46 (KLR)", Case Analysis (2018). Cause No. 900 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/46/eng@2018-12-28

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