SMEP Microfinance Bank v Omina (Appeal E034 of 2025) [2025] KEELRC 2742 (KLR)
The bottom line
#A Kenyan court cut a wrongfully dismissed bank manager's award from Kshs.1,025,000 to Kshs.150,000 because his own misconduct caused the dismissal.
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 appellant proved its case against the respondent (valid and fair reason for summary dismissal)
- 2.Whether the procedure for termination was fair and in compliance with Section 41 of the Employment Act
- 3.Whether the trial court's reliefs (12 months' compensation, salary in lieu of notice, costs, interest) were justified
- 4.Whether the claim for settlement of Kshs.742,359 under a Memorandum of Understanding and the claim for aggravated damages were proved
Key legal issues
#Whether the appellant had valid and fair reasons to summarily dismiss the respondent
Yes - the appellant proved on a balance of probability that the respondent falsified receipts and failed to conduct due diligence before activating mobile banking for a customer
The court re-evaluated the evidence and found the receipts for cab services and fuel were falsified as no cab services were rendered and no travel took place. The respondent admitted at the disciplinary hearing that he submitted falsified documents and did not follow procedure in approving mobile banking activation. Applying Section 43 of the Employment Act and the balance-of-probability standard, the appellant genuinely believed and established the grounds for dismissal.
Whether the termination procedure was fair under Section 41 of the Employment Act
No - two procedural defects vitiated the process: the colleague accompanying the respondent was restricted to observer status, and only 24 hours was given to respond to the notice to show cause
Section 41 entitles an employee to be accompanied by a colleague of choice who may make representations; restricting that person to an observer contravened the section. Although no fixed period is prescribed for responding to a show-cause notice, the response is an integral part of the right to fair hearing and 24 hours impaired the respondent's ability to consult and gather evidence. The dismissal was therefore unfair within Section 45 notwithstanding valid substantive reasons.
Whether the reliefs awarded by the trial court were justified
Partly - the 12 months' compensation was inordinately high and substituted with two months; salary in lieu of notice was set aside; other orders upheld
Under Section 49(4) of the Employment Act the court must consider the employee's wishes, the circumstances of termination and the employee's contribution to the dismissal. The respondent substantially contributed to his own dismissal and was 'the sole author of his misfortune', so the maximum award of 12 months was not justified. Two months' compensation (Kshs.150,000) was considered appropriate, and other orders of the trial court were upheld.
Legal principles established
#- For a termination of employment to pass the fairness test there must be both substantive justification and procedural fairness
- The employer need only prove, on a balance of probability, the reasons it genuinely believed to exist at termination
Court orders
#- 1.Declaration that the summary dismissal of the respondent was unprocedural
- 2.Award of salary in lieu of notice set aside
- 3.Award of 12 months' compensation set aside and substituted with an award of two months' salary, Kshs.150,000.00
- 4.Claim for settlement of Kshs.742,359 (Memorandum of Understanding check-off loan) dismissed
- 5.Claim for aggravated damages dismissed
- 6.Other orders of the trial court upheld
- 7.Each party to bear its own costs of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Employment and Labour Relations Court (trial court)
- not stated in judgment
- Jurisdiction invoked
- First appeal to the Employment and Labour Relations Court from the trial court (stated in judgment: 'This being a first appeal, the role of this court is to reconsider and re-evaluate the evidence and arrive at its own conclusions')
Relief refused
#Salary in lieu of notice
The summary dismissal was affirmed on the substantive reason
12 months' compensation (maximum award)
The respondent substantially contributed to his dismissal and the trial court did not consider the Section 49(4) parameters justifying the maximum
Settlement of Kshs.742,359 (Memorandum of Understanding check-off loan)
No supporting evidence of the alleged MoU or of the appellant's liability
Aggravated damages
No evidence of entitlement tendered
Costs
Each party to bear its own costs of this appeal.
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.
In conclusion, the appeal partially succeeds. The award of Kshs.1,025,000 is set aside and substituted with an award of Kshs.150,000.00.
Each party to bear its own costs of this appeal.
In the considered view of this court by according the respondent 24 hours to respond to the notice to show cause, the appellant impaired the respondent's right to fair hearing which vitiated the process.
for a termination of employment to pass the fairness test, it must be shown that there was not only substantive justification for the termination but also procedural fairness
The standard of proof is on a balance of probability, not beyond reasonable doubt, and all the employer is required to prove are the reasons that it "genuinely believed to exist," causing it to terminate the employee's services.
The "additional information", in the court's view contravened the provisions of Section 41 of the Employment Act.
Issues in the judgment
#The judgment is marked 'DRAFT' at the end, and the date of delivery (8th October 2025) is later than dates referenced in the body relating to events of 2023; the heading also states the respondent's witness statement dated the event 25th March 2023 while the appeal concerns 26th May 2023.
Internal date contradiction in the judgment text regarding when the respondent received the summary dismissal letter.
The judgment contains a material misdescription of the event date in the respondent's case as pleaded versus the date relied on in the analysis.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "SMEP Microfinance Bank v Omina (Appeal E034 of 2025) [2025] KEELRC 2742 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2742/eng@2025-10-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.