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ELRCDismissedNot stated in the judgment

George Kennedy Otieno v Barclays Bank Limited [2019] KEELRC 988 (KLR)

Employment and Labour Relations Court
16 July 2019
2,625 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan bank employee fired over fraud was not unfairly dismissed because he could not explain how his password was used.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank since April 2007 and last serving at the Kisumu Branch, was summarily dismissed on 18th September 2012 after fraudulent transactions totalling approximately Kshs.3.7 million were authorised from his workstation using his password on 20th and 27th June 2012. He was arrested, charged in Kisumu Criminal Case No. 428 of 2012, suspended, subjected to a disciplinary hearing and an unsuccessful appeal, and was acquitted in 2015 for lack of sufficient evidence. He sought reinstatement, salary from September 2012, or alternatively one month's salary per year worked, plus costs. The respondent maintained the dismissal was lawful and fair and counterclaimed for Kshs.954,147 in staff loans and a credit card debt. The court framed three issues: whether the termination was unfair, whether the reliefs were due, and whether the counterclaim was proved. Holding that the claimant admitted he alone used his password and could not explain how the transactions occurred, the court found valid reason for dismissal under Section 44(4) of the Employment Act, and found procedural fairness under Section 41 satisfied through notifications and two hearings. Relying on authority that criminal acquittal does not immunise an employee from discipline, the court held the employer was not obliged to await the criminal outcome. The claim was dismissed, judgment entered for the respondent on the counterclaim for Kshs.954,147 with interest at bank rates, and each side was left to bear its own costs.

Questions the Court framed

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

  1. 1.Whether the claimant's employment was unfairly terminated
  2. 2.Whether the claimant is entitled to the reliefs he has prayed for
  3. 3.Whether the respondent has proved its counterclaim

Key legal issues

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01

Whether there was valid reason (substantive fairness) for the summary dismissal

Holding

There was valid reason: the claimant admitted he alone used his password and that the fraudulent transactions were authorised from his machine, warranting summary dismissal under Section 44(4) of the Employment Act

Reasoning

The claimant conceded he was the sole user of his password and was on duty when fraudulent transactions were authorised on his machine. Section 44(4) treats wilful neglect or careless performance of duty as gross misconduct, and Section 44(4)(g) permits dismissal on reasonable and sufficient grounds of suspected criminal offending against the employer. The claimant failed to explain how his password was used without his knowledge, so the dismissal was substantively fair.

p. 3
02

Whether termination before the conclusion of the criminal case rendered the dismissal unfair

Holding

No; the employer was entitled to discipline the employee before the criminal case concluded since the two processes are distinct and the grounds differed

Reasoning

Relying on the Court of Appeal decision in Attorney General and Another v Andrew Maina Githinji and Another, citing Kibe v Attorney General, the court held that acquittal does not confer immunity from discipline. The termination preceded the 2015 acquittal, but the disciplinary grounds (carelessness with the password) differed from the criminal charges, and the claimant admitted carelessness, so the employer's decision was neither wrongful nor unfair.

p. 4
03

Whether the disciplinary procedure complied with Section 41 of the Employment Act (procedural fairness)

Holding

The procedure was fair: the claimant was notified of the reasons, given suspension and hearing letters, attended two disciplinary hearings and confirmed the minutes were accurate

Reasoning

The claimant admitted under cross-examination that he received a suspension letter detailing the fraudulent transactions, an invitation to the disciplinary hearing stating the grounds, and that the minutes of both the disciplinary and appeal hearings were accurate and that the termination letter stated the reasons. He was notified of the hearings in good time, satisfying Section 41. His allegations of harassment by the investigator were unsupported and never raised at the time.

p. 4
04

Whether the respondent proved its counterclaim for staff loans and credit card debt

Holding

Yes; the claimant admitted the loans and credit card debt, and judgment was entered for Kshs.954,147 with interest at bank rates

Reasoning

In his reply to defence and defence to counterclaim the claimant denied owing money, but at trial he admitted being granted two loans and having a credit card debt totalling Kshs.954,147 which he had not cleared because he was out of employment. On this admission judgment was entered for the respondent with interest at the subsidised staff rates agreed in the credit terms.

p. 4

Legal principles established

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  • Acquittal in a criminal case does not automatically immunise an employee from employer disciplinary action; the two processes are distinct with different standards of proof
  • An employer need not await the outcome of criminal proceedings before taking disciplinary action where the grounds for discipline differ from the criminal charges
  • An employee is responsible for the use of his personal password, and reasonable suspicion of misuse based on that password constitutes a valid reason for summary dismissal

Court orders

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  1. 1.The claimant's case is dismissed
  2. 2.Judgment entered for the respondent against the claimant in the sum of Kshs.954,147 as prayed in the counterclaim
  3. 3.Interest on the judgment sum at bank rates in accordance with the terms of credit between the claimant and the respondent
  4. 4.No orders for costs

The bench

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

majority

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court jurisdiction over unfair termination claims under the Employment Act

Relief refused

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Reinstatement to work and payment of salary from September 2012

Termination was found valid and fair, so reinstatement was not available

p. 4

Pay in lieu of notice

It had already been paid and applied to offset the claimant's loans

p. 4

Salary after the date of dismissal

Not entitled following the finding of fair termination

p. 4

Costs of the cause

The court declined to award costs to either party

p. 4

Costs

There shall be no orders for 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 thus find the termination of the claimant’s employment both procedurally and substantively fair as there was valid reason and he was taken through a fair disciplinary process.
p. 4Fairness of termination
In conclusion, the claimant’s case is dismissed and judgment entered in favour of the respondent in the sum of Kshs.954,147 as prayed in the counterclaim.
p. 4Final orders
I therefore enter judgment for the respondent against the claimant in the sum of Kshs.954,147 with interest at bank rates in accordance with the terms of credit between the claimant and the respondent
p. 4Counterclaim judgment
There shall be no orders for costs.
p. 4Costs
Acquittal in a criminal case does not automatically render an employee immune to disciplinary action by an employer.
p. 4Criminal proceedings and disciplinary process

Issues in the judgment

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minor

The claimant testified he was 'subsequently promoted in 2001 to Retail Support Grade B2', which is inconsistent with employment commencing in April 2007; likely a typographical error for 2011

minor

Judgment dated and signed at Nairobi on 11th June 2019 but dated and delivered at Kisumu on 16th July 2019, with two judges signing

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, "George Kennedy Otieno v Barclays Bank Limited [2019] KEELRC 988 (KLR)", Case Analysis (2019). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/988/eng@2019-07-16

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