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ELRCDismissedCause No. 495 of 2016

Dorcas Nyambura Njuguna v Spire Bank [2020] KEELRC 833 (KLR)

Employment and Labour Relations Court of Kenya
25 June 2020
2,501 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court dismissed a bank manager's unfair termination claim, ruling her dismissal over dishonesty and operational lapses was fair under Kenyan employment law.

What this practically means

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Executive summary

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The claimant, employed by the respondent bank as Service Manager at its Nakuru branch, sued for unfair termination of her employment on 26th July 2016 following allegations that she approved a Ksh.2,000 travel reimbursement for an ex-employee supported by forged receipts, and that she committed operational lapses relating to vault cash management, teller cash management and the attendance register. She sought July salary, three months' notice pay, service gratuity for ten years, unpaid leave days and statutory damages totalling over Ksh.1.35 million. The respondent defended the termination, asserting the claimant admitted the misconduct, that dismissal was justified under section 44 of the Employment Act, and that due process was followed through show-cause notices and a disciplinary hearing. The court framed two issues: whether the termination was unfair, and whether the remedies were owing. Applying section 47(5) of the Employment Act on burden of proof, and relying on authorities on the high duty of honesty owed by bank employees, the court found the claimant had admitted the lapses and the irregular expense approval. The respondent was held to have complied with sections 41, 43 and 45 of the Act, and the termination was found justified. All remedies were refused: notice pay and leave had been paid, gratuity was not contractual, three months' notice was unsupported, and no damages followed a justified termination. The claim was dismissed with each party bearing their own costs.

Questions the Court framed

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

  1. 1.Is there a case of unfair termination of employment?
  2. 2.Are the remedies sought owing?

Key legal issues

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01

Whether the termination of the claimant's employment was unfair substantively and procedurally

Holding

The termination was justified both on substance and process; the claimant admitted lapses and dishonesty in expense claims, and the employer complied with sections 41, 43 and 45 of the Employment Act by issuing show-cause notices and conducting a disciplinary hearing

Reasoning

The claimant, as Service Manager, admitted approving a Ksh.2,000 travel reimbursement without receipts (receipts found to be forged) and admitted operational lapses over vault register, cash transfer sheets and the attendance register. Show-cause notices dated 15th/18th and 21st July 2016 were issued and answered, and a disciplinary hearing was held on 26th July 2016 before termination. The bank, as an institution requiring utmost trust, was entitled to treat such dishonesty and negligence as justifying termination.

p. 4
02

Whether the remedies sought (July salary, three months' notice pay, service gratuity, unpaid leave and statutory damages) were owing

Holding

None of the remedies were owing; notice pay and leave had been paid, gratuity was not a contractual term, three months' notice pay was unsupported, and no damages follow from a justified termination

Reasoning

The court found that notice pay and accrued leave days had already been paid; gratuity did not apply to permanent and pensionable employment; the claim for three months' notice had no legal or contractual foundation; and since termination was justified, damages were unavailable. The claim for July salary was also settled by the notice pay.

p. 4

Legal principles established

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  • The employer-employee relationship in banking is premised on a high degree of honesty, trust and good faith, and where these are put into question the employment relationship becomes untenable
  • Under section 47(5) of the Employment Act the employee bears the burden of proving unfair termination, while section 43(2) defines the reasons for termination as matters the employer genuinely believed to exist at the time

Court orders

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  1. 1.The claim is dismissed
  2. 2.Each party shall bear 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
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (employment dispute over unfair termination)

Relief refused

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Salary for July

Not stated as to which year; notice pay having been made and termination being justified, the claim is settled

p. 4

Notice pay for 3 months (Ksh.210,000)

Not supported by any law or by the contract of 14th January, 2014

p. 4

Service gratuity for 10 years (Ksh.233,333)

Gratuity was not an agreed term of the contract; claimant was on permanent and pensionable terms

p. 4

Statutory damages (Ksh.840,000)

Termination of employment was found justified; no damages are payable

p. 4

Costs

Each party shall bear 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.

Termination of employment is hereby found justified.
p. 4Substantive fairness - justification of termination
The claimant was invited to show cause why her employment should not be terminated and further invited to a disciplinary hearing and hence the respondent duly complied with the statutory provisions of section 41, 43 and 45 of the Employment Act, 2007.
p. 4Procedural fairness - compliance with sections 41, 43 and 45
Accordingly, the claim herein is dismissed. Each party shall bear own costs.
p. 4Disposition and costs
section 47(5) of the Employment Act, 2007 placed the burden on the claimant as the employee to prove there was unfair termination of her employment.
p. 4Burden of proof in unfair termination claims

Issues in the judgment

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minor

The list of reliefs states 'Unpaid leave days 000' which appears to be a typographical omission of the amount claimed, though the judgment later records that leave days were paid

minor

The judgment inconsistently describes the termination letter as both terminating employment and dismissing the claimant

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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

Cite this brief

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Cite this brief

Caselaw, "Dorcas Nyambura Njuguna v Spire Bank [2020] KEELRC 833 (KLR)", Case Analysis (2020). Cause No. 495 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/833/eng@2020-06-25

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