Madagow & another v African Banking Corporation Ltd (Cause 424 & 425 of 2015) [2020] KEELRC 22 (KLR)
The bottom line
#Kenya's Employment Court ruled one bank employee's dismissal unfair because her employer couldn't prove she did anything wrong, awarding six months' salary.
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 dismissal of the Claimants was unfair and unlawful.
- 2.Whether the Claimants are entitled to the orders sought.
Key legal issues
#Whether there was a valid reason for dismissing the 1st claimant
No - the charges were not made out; she had notified her supervisor and the verifier by email and all officers had system alerts on the used cheque.
The email trail showed the 1st claimant sent the cheque to the domicile branch, was confirmed for payment by Ms. Magut, and forwarded it to the CBO (Ms. Costa), copying the 2nd claimant, who admitted she had told him the cheque had been used. Since the supervisor admitted being informed and the verifier had system access, the first charge (failure to inform) failed, and with it the second charge of misrepresentation fell away.
Whether there was a valid reason for dismissing the 2nd claimant
Yes - he negligently authorised the transaction and was rightly dismissed under s. 44(4).
As the 1st claimant's supervisor, he was told the cheque had previously been presented and honoured, yet he advised her to treat it as a Debit Voucher. The court believed Cw1's account and found he was the right person to stop the fraudulent transaction at branch level and escalate to senior managers. His negligence occasioned the loss of Kshs. 1,950,000, proving a valid reason on a balance of probability.
Whether a fair procedure under s. 41 was followed
Yes - both claimants were served with show cause letters, attended hearings, and were effectively recorded as admitting a fair hearing.
The claimants admitted receiving show cause letters and attending hearings with a fellow employee of their choice. Though they complained the notice was short, they never protested in writing or sought adjournment. When proceedings were withdrawn and fresh hearings scheduled, they objected through counsel rather than attend, which the court treated as an admission that the initial process was fair.
Legal principles established
#- Failure by an employer to prove a valid reason for dismissal renders the termination unfair under ss. 43 and 45 of the Employment Act.
- Under s. 41 of the Employment Act, an employer must accord a fair hearing to an employee before termination on account of misconduct.
Court orders
#- 1.1st Claimant: compensation of Kshs. 222,000 (6 months' gross salary at Kshs. 37,000) for unfair dismissal, subject to statutory deductions
- 2.1st Claimant: Certificate of Service
- 3.1st Claimant: costs plus interest at court rates from the date of judgment
- 4.2nd Claimant: Certificate of Service
- 5.2nd Claimant: no order as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (ss. 41, 43, 44(4), 45, 49, 51) and ELRC Procedure Rules
- Consolidated with
- The two separate claims instituted on 19.3.2015 against the Respondent were consolidated on 31.5.2018
Relief refused
#2nd Claimant's compensation of Kshs. 1,867,824 for unfair termination
The court found his dismissal fair - valid reason proved and fair procedure followed.
General claim for the balance of claimed compensation and other reliefs by both claimants
Terminal dues had been computed and paid; the other reliefs were not supported by the evidence.
Costs
1st Claimant: costs of the proceedings plus interest at court rates from the date of judgment. 2nd Claimant: no order as to costs.
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.
I award 6 months’ gross salary as compensation for the unfair dismissal.
In the end, I enter judgment in favour of the claimants as follows: 1st claimant Compensation Kshs. 222,000 Certificate of Service Costs plus interest at court rates from the date hereof but the above award is subject statutory deductions. 2nd Claimant Certificate of Service No order as to costs.
However, as regards the 1st claimant, the termination of her employment contracted was unfair within the meaning of section 45 of the Employment Act because there was no valid reason to justify the same.
the respondent has proved on a balance of probability that the reason for dismissing the 2nd claimant was valid under section 44(4) of the Employment Act
Under section 43 of the Employment Act, failure by the employer to prove a valid reason for dismissing an employee renders the dismissal unfair within the meaning of section 45 of the Act.
Issues in the judgment
#The consolidated case number of the suits is not stated anywhere in the judgment, only the dates of filing (19.3.2015) and consolidation (31.5.2018).
The Respondent is referred to throughout without being named; the parties are identified only as Claimants and Respondent.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Madagow & another v African Banking Corporation Ltd (Cause 424 & 425 of 2015) [2020] KEELRC 22 (KLR)", Case Analysis (2020). Consolidated suits instituted on 19.3.2015 and consolidated on 31.5.2018 (ELRC, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/22/eng@2020-12-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.