Odipo v Absa Bank Kenya (Cause E938 of 2021) [2025] KEELRC 3003 (KLR)
The bottom line
#Kenya's Employment Court ruled a bank could fairly sack a branch manager for negligence in a fraud he didn't commit, and ordered him to repay his staff loans.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether there were valid reasons to warrant the claimant's termination
- 2.Whether the claimant was subjected to due process before termination
- 3.Whether the counter claim is proved
- 4.Whether the claimant is entitled to remedies sought
Key legal issues
#Whether there were valid reasons to warrant the claimant's termination
The court found valid reasons existed - the claimant, as Branch Manager, was negligent in his oversight duties, contrary to bank procedures on cash collection and PIN resets, exposing the bank to a fraud loss of Kshs. 7.96 million
The claimant was the overall in charge of the branch. He conceded visiting the customer in Moshi and collecting/depositing cash contrary to the cash collection regulations, and admitted flaws in escalation of suspicions. Under section 43 of the Employment Act, the employer need only prove reasons it genuinely believed to exist at termination. The court found the claimant negligent in failing to detect fraud occurring under his watch.
Whether the claimant was subjected to due process before termination
The court found the claimant was subjected to a fair disciplinary process under section 41 of the Employment Act
The claimant was served with a show cause letter and responded. The minutes of the disciplinary hearing show he was informed of the allegations, given a chance to respond, and allowed to call a witness. He was also afforded an appeal which was heard and dismissed. Section 41's requirements were therefore met.
Whether the counterclaim for Kshs. 4,308,560 loan balance is proved
The counterclaim was proved on the claimant's own admission and judgment entered for the respondent
The claimant admitted taking the staff loan facilities and that he had not completed repayment. Following this admission, the court found the counterclaim proved and payable as prayed, with interest from the date of judgment.
Legal principles established
#- In any claim arising out of termination of a contract, the employer must prove the reason or reasons for the termination, failing which the termination is deemed unfair
- A Branch Manager bears overall supervisory responsibility for branch operations and may be terminated for negligent failure to detect fraud occurring under his watch even where he was not directly involved in the fraud
Court orders
#- 1.The claimant's claim is dismissed
- 2.The counter claim is allowed against the claimant and is payable with interest with effect from the date of the judgment
- 3.The court declines to grant costs in the claim, each party bearing its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Article 162(2)(a) of the Constitution and Section 12 of the Employment and Labour Relations Court Act (employment disputes arising out of employment relations, including staff loans)
Relief refused
#Declaration that the Respondent violated the Claimant's constitutional and statutory rights to fair administrative action
Court found the termination was for valid reasons and after a fair process
Severance pay of Ksh. 1,681,386
Not awarded; termination was not on account of redundancy and the claim failed
Bonus pay for 2020 of Ksh. 1,300,000
Not awarded as the claim failed
Three months' salary in lieu of notice
Not awarded as the claim failed
Loss of earnings for 21 years
Not awarded as the claim failed
Damages for wrongful termination equivalent to 12 months' salary
Not awarded as the claim failed
Medical cover for 21 years
Not awarded as the claim failed
Maintenance of staff loan rate at 9% and non-listing on CRB
Counterclaim allowed; loans payable
Costs of the suit and interest at 6% per annum
Court exercised discretion to decline costs
Costs
The court declined to grant costs in the claim; no costs awarded ('I exercise my discretion and decline to grant costs in this claim.')
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.
Having found as above it is my finding that the claim by the claimant fails and is dismissed accordingly . The counter claim is allowed against the claimant and is payable with interest with efiect from the date of this judgment. I exercise my discretion and decline to grant costs in this claim.
It is therefore my finding that the claimant was subjected to a fair disciplinary process.
Whereas it is true that he may not have been involved in the fraud directly he was the branch manager and in performing his work in a negligent manner he failed or ignored to detect the fraud that was happening right under his note.
Issues in the judgment
#Internal date inconsistency: the suspension letter date is given inconsistently and the claimant's evidence references a Notice to Show Cause dated 20th March 2023 where 2021 is clearly intended
Name of the fraud perpetrator's co-accused/beneficiaries appears inconsistently (Juma Nassir vs Juma Arua) and the Respondent's counterclaim refers to the claimant as 'her' in one passage
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Odipo v Absa Bank Kenya (Cause E938 of 2021) [2025] KEELRC 3003 (KLR)", Case Analysis (2025). Not stated in the judgment (Statement of Claim dated 12th November 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/3003/eng@2025-10-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.