Recent Court decisions on termination of employment.
2 years ago
In this article, I look at 3 very recent decisions of the Court of Appeal which address issues arising from the termination of employment.
As you probably know, the majority of court cases on employment matters arise from terminations.
CASE 1 (termination letter not signed):
A.N.A (Appellant) vs Barclays Bank of Kenya Limited (Respondent), Civ App No. 70 of 2016.
Facts: The Appellant was terminated by the Respondent for engaging in unauthorised financial dealings with a bank customer. The Bank followed the termination procedure stipulated at Section 41 of the Employment Act (EA) but the termination letter that was issued to the Appellant was, for some reason, not signed!
Finding (27th September 2019): The Court of Appeal agreed with the Employment & Labour Relations Court (ELRC) that the bank had proved that the Appellant had behaved improperly and therefore the bank was justified in terminating him. However, the failure to issue a signed termination letter rendered the termination unfair as it was a violation of the principles of fair labour practices, for which the Appellant was entitled to 6 months compensation.
I certainly don’t understand how the Bank issued an unsigned termination letter BUT since there is no argument that he was terminated, I find it hard to justify an award of 6 months compensation. The Bank having proved that the staff had grossly misconducted himself, the former staff should only have been awarded 5 days compensation!
The purpose of damages is not to enrich unjustly…
The Court of Appeal made another important finding… that “an award of maximum compensation must always satisfy stringent conditions that demonstrate gross abuse of procedure or extreme cruelty on the part of the employer.”
A similar finding was made by the Court of Appeal in O.D.N vs Mtwapa Beverages Limited Civ App No. 104 of 2018 where the court reiterated the finding in the case of D.K.N vs TSC Ind Cause No. 379 of 2009, that employment remedies are not aimed at facilitating the unjust enrichment of aggrieved employees.
CASE 2 (due process not followed):
Kenya Commercial Bank Limited (Appellant) vs TNM (Respondent), Civ App No. 53 of 2017 (decided on 27th September 2019)
Facts: The Respondent was found to have engaged in unauthorised financial dealings with a Bank customer. He was asked to show cause and he wrote a detailed response. The Bank subsequently engaged a forensic auditor who conducted investigations and produced a report containing evidence of the Respondent’s wrong-doing. The Bank proceeded to terminate him without following the termination procedure spelt out at Section 41 of the EA. The Respondent was awarded 12 months compensation by the ELRC.
Finding: The Court of Appeal agreed that the Bank had reasons for terminating the Respondent but had failed to follow proper procedure. For this, the Court reduced the damages from 12 months to 4 months.
I agree with the Court of Appeal – the termination was unlawful for failure to comply with proper procedure and there was no justification for the award of 12 months compensation. In my last post, I highlighted a decision of the Court of Appeal where the Court found the termination lawful despite the fact that the proper procedure was not followed. See also the below case.
CASE 3 (due process not followed & oral hearings mandatory):
KRA (Appellant) vs RWG (Respondent) & 2 others Civ App No. 66A of 2017 (decided on 11th October 2019)
Facts: The Respondents were summarily dismissed for defrauding KRA. They were reinstated by the ELRC whereupon KRA appealed.
Finding: The Court of Appeal found (i) that KRA was justified in summarily dismissing the Respondents and (ii) that the process was unfair because KRA did not comply with due process as per Section 41 of the EA. The Court proceeded to find that “the termination, though flawed due to procedural lapses, was lawful and justified. In the circumstances of this case and in consideration of public interest, the remedy that commends itself to us is that the services of the respondents shall stand terminated.“
Well…I’m sure, with time, we shall have a meeting of minds in the Court of Appeal.
Oral hearings are mandatory…
The Court of Appeal made another important finding on the issue of whether or not an oral hearing is necessary, or whether disciplinary proceedings can be conducted through exchange of documents. The Court found that for purposes of Section 41(2) of the EA, an oral hearing is mandatory.
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