REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR RELATIONS COURT OF KENYA AT

MOMBASA

CAUSE NO. E065 OF 2023

THOMAS MACHARIA MWANGI ………………………………………… CLAIMANT

VERSUS

ABSA BANK KENYA PLC ……………………………………………… RESPONDENT

JUDGMENT

The respondent bank employed the claimant as a branch manager on 14 February 2019 at the
Lavington branch, Nairobi and then promoted to a senior branch manager, at the Nkrumah
Road branch, Mombasa on 29 March 2021.

On 17 March 2023, the claimant was issued with a notice of suspension signed on behalf of
Doufold Odanga, regional manager by one Serah Muthui who is the branch manager, of the
Nyali branch. This was a junior officer to the claimant.

The suspension was because the claimant was involved in irregular unauthorized overdraft
facilities advanced to some customers at the Nkrumah Road branch. The suspension was for
30 days.

On 14 April 2023, the suspension was extended for 30 days. On 2 May 2023, the claimant
was issued with a notice to show cause why his employment should not be terminated on the
grounds that following his suspension, there was an investigation finding that there were
irregular and unauthorized overdraft facilities advanced to bank customers under his
leadership. On several occasions, he had violated the bank policies and procedures by
engaging in irregular lending for two separate customers INO Safinah Petroleum and DM
Kanyi. He was directed to file his response by 8 May 2023.

The claim is that the claimant submitted his response to the notice to show cause on 4 May
2023 upon which he was invited to the disciplinary hearing on 7 June 2023. The disciplinary
panel was comprised of;

a) Gunilla Ouko, country representative head of sales;

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 b) Beatrice Mwago, head of retail;
c) Elkana Momanyi, digital credit;
d) Fathiya Noordin, senior dealer;
e) Tabitha Mutwa, employee relations manager.

Following the disciplinary hearing which was virtual, the respondent supplied the claimant
with draft minutes for his perusal and confirmation on 17 May 2023. These minutes did not
capture the issues addressed during the disciplinary hearing and the claimant requested the
respondent to make amendments but this was declined. On 26 May 2023, the claimant was
issued with a letter terminating his employment. He was allowed the right of appeal which he
filed on 29 May 2023.

The claim is that before the claimant’s appeal could proceed for the hearing, the respondent
advertised for his position meaning that there was a premeditated position that he would not
be successful. This resulted in unfair and unlawful termination of employment contrary to
Sections 41, 43 and 44 of the Employment Act.

There was an appeal hearing on 7 June 2023 and again, the minutes failed to capture what
had been stated at the hearing and despite his protests, the respondent refused to make
amendments. On 16 June 2023, the claimant was issued with a notice rejecting his appeal.

The claim is that the claimant’s employment was terminated on grounds of nepotism and a
witch hunt against him for raising questions touching on three senior employees who
castigated and victimized him as per his email dated 20 March 2023 sent to Arrie
Rauttenbach, the CEO. During the claimant’s suspension, the respondent engaged a private
investigator into his personal and private conduct and followed him in public, restaurants and
pubs and also demanded to be supplied by different establishments with information in
violation of his rights. This is contrary to the Constitution and the Employment Act. This has
placed the claimant in public ridicule from reports circulated to the claimant’s subordinates
and the general public.

The claimant is a man of good character with no criminal record and there was no previous
warning letter. Following the publication of an incident which occurred in a hotel
establishment, the claimant suffered character assassination and prayed for damages.

Following investigations into an incident that occurred on 6 April 2023 in a hotel

establishment, the respondent portrayed the claimant as a person of questionable character

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which amounts to character assassination which has cost him a career banker in banking
institutions. The claimant is unable to secure new employment in the sector due to
reputational damage. He has suffered career progression, and chances of employability. The
respondent failed to give the claimant a fair hearing by refusing to capture the disciplinary
minutes as they happened and rendering his appeal academic. There were no valid reasons
leading to the termination of the employment and despite working diligently for the
respondent from February 2019 to June 2023, his track record was not addressed.

While the claimant was the senior branch manager at Nkrumah Road, the branch realized a
net profit of Ksh.1.2 billion for the year 2022 and owing to the said realized profits, he was
entitled to a performance bonus of Ksh.2.3 million which the respondent deliberately failed to
pay and instead levelled malicious accusations in an attempt to avoid paying the bonus.

The claimant worked for the respondent while earning a salary of Ksh.572, 760 per month
which was to be increased to Ksh.647, 218 (13% increment) from January 2023. The
respondent declined to effect the said increment and the same should be awarded.

Termination of employment was without due process, the respondent has refused to pay
terminal dues and the claimant is seeking the following;

a) Damages for defamation Ksh.5,000,000;

b) Damages for character assassination Ksh.5,000,000;
c) Unpaid bonuses for the year 2022 ksh.2,300,000;
d) 12 months compensation Ksh.7,766,625.60;
e) Notice pay Ksh.647,218;
f) Unpaid salary increments at 13% from January 2023 to May 2023 Ksh.373,294;
g) Certificate of service;
h) Costs.

The claimant testified that upon employment by the respondent, he was of exemplary
performance which saw him rise to the position of senior branch manager, Nkrumah Road,
Mombasa. He was however issued with a suspension on 17 March 2023 signed by his junior
Serah Muthui instead of Doufold Odanga the regional manager. The suspension was on the
grounds that he was involved in irregular and unauthorized overdraft facilities for some
customers at the branch.

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The claimant testified that he was accused of authorizing an overdraft for one David Mureithi
Kanyi without proper collateral. The customer delayed in making payments for the loan
facility. The collateral used was a building where the claimant purchased a unit and banked
Ksh.500, 000 and despite declaring his interest through the zone system he was accused of
having a conflict of interest which was not the case. The purchase of the property was a year
earlier on 30 March 2022 and he had a sale agreement as proof.

The second reason used to suspend the claimant was that he advanced Timothy Gachoka
credit facility through the Credit team which was said to be erroneous. The transaction had
been approved by another officer and the respondent claimed that there was excess lending
contrary to policy.

The claimant responded to the notice to show cause and denied the allegations against him.
There were two main allegations relating to a mortgage facility of Ksh.39.2 million to D.M.
Kanyi and unauthorized excess lending to Safinah Petroleum. He noted that D.M. Kanyi
applied for a mortgage loan facility and was advanced Ksh.39.5 million to be repaid over 180
months with a monthly instalment of Ksh.493, 399 as per the offer letter dated 1 st November
2021. The claimant noted that he had been introduced to D.M. Kanyi by two of his staff at the
Nkrumah branch, Bashir Oroko and Mary Mwaniki. Both had done background requirements
on the loan facility including a risk assessment and on 19 June 2021, an offer letter was
prepared. It was noted that the customer had been servicing his debt well without any
collection challenges.

The claimant testified that on 25 March 2022, James Mureithi informed him that the loan
facility could not be discharged as the rental security had not been sighted in the account. On
29 March 2022, Dunfold Odanga the regional manager requested that the respondent approve
the disbursement despite not receiving the rental income from the customer who had
committed to make deposits.

On the allegations that the claimant failed to advise DM Kanyi to channel the rental income
into the ABSA account, he responded that the facility issued was to run from March 2021 to
February 2036 and he was not aware that the customer was in arrears. The claimant was away
for two months at the time. The bank procedure required that the matter be escalated to the
collections and recoveries department under Philip Maweu followed by a formal demand
letter to the customer.

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The claimant testified that on his alleged engaging in unauthorized dealings with the
customer, his deposit of Ksh.500, 000 into the account of the customer on 24 January 2022,
was a top-up from his salary which he used to purchase a house from DM Kanyi. He made
full disclosure before the purchase and had a sale agreement dated 26 January 2023. There
was no conflict of interest and he had a right to purchase property.

On the second allegation, the claimant testified that on 10 January 2023, he got a request
from Safinah Petroleum for an excess of Ksh.4 million which he raised from his office while
Felix Maingi was acting branch manager, Diani Branch. The customer request was approved
by Peter Kamau, senior corporate credit manager, and Mary Mwaniki was to input the request
for approval. On 13 February 2023 where it was alleged that the claimant sought an extension
of excess approval for Ksh.4 million for 10 days before the due amounts were paid at
Ksh.1.66 million against insufficient funds, the claimant had noted that Peter Kamau was
away, hence he wrote to Alfred Mutuku on 14 February 2023 to review the customer account
and the need for resolution of the excess limit by 24 April 2023 since the customer had
serviced a similar facility and had paid up.

On the payment of Ksh.1.66 million over the counter, the claimant noted that he was not
aware of the payment and had directed his staff to address it by 24 April 2023. All other
matters raised on this account were flagged out and before the claimant could address them,
he was suspended from duty.

The claimant also called Dunfold Odanga as his witness and testified that he was the
immediate leader of the claimant and worked together while employed by the respondent.
The claimant demonstrated exceptional performance and his integrity was beyond reproach.

Mr. Odanga testified that the show cause letter issued to the claimant was signed by a junior
employee working under the claimant and the same ought to have been signed by him as the
regional manager or the directors. Owing to his refusal to cooperate with the respondent and
to subject the claimant to disciplinary action leading to termination of his employment, the
said notice was signed by a person reporting to the claimant and not him.

Mr. Odanga testified that during the suspension and disciplinary hearing he did not issue any
notice and was not in agreement with the process. The contents of these letters and notices
were pure malice and meant to destroy a young career that was flourishing at the time.
Termination of the claimant’s employment was based on malice and was not justified.

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Response

In response, the respondent admitted that the claimant was employed as a senior branch
manager, in Mombasa from 29 March 2021. Two customer accounts, D.M. Kanyi and
Safinah Petroleum Limited were domiciled and operated from his branch, Nkrumah Road.
The account of D.M. Kanyi was in arrears at the time the claimant was the branch manager.
He deposited Ksh.500, 000 in the account on 31 st January 2023. The account of Safinah
Petroleum Limited was overdrawn in the sum of Ksh.1, 665,000 on 27 February 2023 by a
transfer over the counter at Nkrumah Road branch.

The claimant was employed and issued with the letter of appointment and his employment
was regulated under the Regulatory Compliance and Rules and key Policies, Procedures and
Practices of the respondent, formerly Barclays and Barclays Africa Group.

Following internal investigations of customer accounts and leading status at the Nkrumah
Road branch, the respondent discovered anomalies in the handling of some accounts. As
relates to the claimant, the account held by D.M. Kanyi was found to have an outstanding
facility which had been taken over from other banks when he went into arrears where he had
been in arrears.

Investigations revealed that D.M. Kanyi was granted an equity release facility of Ksh.39.2
million on 30 May 2022 but the account was soon flagged for loan arrears in breach of
approval terms by way of rental income not channeled through the ABSA account. The
claimant deposited Ksh.500, 000 into the customer’s account on 31 January 2023 for loan
arrears and as the manager he had committed to ensure that the customer would repay the
loan facility in conflict of interest.

Another customer was Safinah Petroleum Limited which had a short-term loan facility since
May 2022 and had cash flow challenges but was being granted excess funds without due
process.

The investigations also revealed a breach of the bank SME procedure manual by the claimant
concerning Safinah's account, in that he failed to ensure that the excess was paid 10 days
before previous excesses were cleared. He failed to ensure that the customer refers stream
code was properly undated and that a report on CCRS to the sanction for account in excess
over 10 days for Ksh.4 million for 14 days.

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The conduct of the claimant was found in breach of the respondent’s policies and guidelines.
The Absa SME Banking Procedure Manual requires the manager to secure disbursements and
streaming of codes which the claimant failed to address in the case of Safinah. The policy
also requires proper account under SME portfolio management provisions.

The Absa Way Code of Ethics, the same requires maintaining high ethical standards, honesty
and staff to avoid conflict between personal interests and the interests of the bank.

The claimant was taken through a disciplinary process following policy. On 2 May 2023, the
claimant was issued with a notice to show cause and he replied on 4 May 2023. Through
notice dated 10 May 2023, the claimant was invited to attend the disciplinary hearing with a
representative of his choice but opted to attend alone. The hearing was conducted on 16 May
2023 and through notice dated 26 May 2023, the respondent terminated employment. The
claimant filed an appeal which was addressed and found without good basis and dismissed.

Termination of employment was justice and due process followed. The claimant was found to
be in breach of bank policies and procedures and his responses were found unsatisfactory.

The claim that there was character assassination due to the private investigations conducted
by the respondent following a reported incident on 6 April 2023 is without any particulars to
justify the claims made. The alleged claims for defamation are outside the jurisdiction of this
court and should be dismissed with costs.

The advertisement for the position previously held by the claimant followed the termination
of employment. He cannot justify a claim of pre-meditated breach of his rights. A disciplinary
hearing was conducted and the claimant was invited to attend. His appeal was dismissed for
failing to raise any substantial grounds.

The performance of the Nkrumah Road branch does not provide a complete picture for the
reasons that such a branch achieved success as a collective effort of many employees and this
cannot be attributed to the claimant only. He violated various obligations and responsibilities
as a senior officer and cannot justify the claims made.

The claimant’s salary and entitlement to increment is per the offer of promotion letter dated
24 March 2021 being Ksh.6, 192,000 per year. The contract of employment had no automatic
increment clause. Any increment was at the discretion of the employer.

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There was a fair disciplinary process and reasons leading to termination of employment were
stated. He was in breach of bank policies and procedures. A copy of the Certificate of Service
has since been issued but the claimant filed suit before he could collect it. The claim for
damages for defamation or constitutional rights violation is not justified and is without
evidence. The alleged unpaid bonus of Ksh.2.3 million for the year 2022 is discretionary and
not an automatic right. Employment is terminated fairly and compensation is not due or
notice pay and the suit should be dismissed with costs.

The respondent called three witnesses, Kennedy Olung’o, Generose Karimi Njue, and Vaslas
Odhiambo.

Olung’o testified that he is an investigator employed by the respondent and did forensic
audits in this case.

In March 2023 he was requested by the respondent to conduct investigations into an account
held at the Nkrumah branch by Safinah Petroleum Limited following internal reviews which
had revealed potential anomalies in the management and operations of the account. He made
findings that;

a) The SME customer had an assert-based financing facility;

b) The customer was facing cash flow issues from January 2023;
c) Staff at the branch continued to grant excesses to the customer without following
proper guidelines on excess management;
d) On 27 February 2023 a transfer of Ksh.1,665,000 was done over the counter at the
branch against insufficient funds in the account;
e) The branch manager failed to ensure that the refer code system was renamed for
proper excess management as required by the SME banking procedures upon the exit
of the customer relationship manager or the monitoring and control officer;
f) For accounts in excess over 10 days, the relationship manager should have raised the
required excess report on CCRS to the sanctioner as per SME banking procedures and
no action was taken to ensure adherence to procedures in place.
g) There was an excess request on 13 February 2023 for Ksh.4 million for 10 days
erroneously approved to mature on 24 April 2023 but this was not flagged or reported
to CCRS after 10 days;

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 h) On 13 March 2023, the claimant requested a colleague, Gillian Karimi to issue a
repossession order for the customer’s vehicle while the asset-based Based Financing
facility was not in arrears.

Olung’o testified that he filed his report dated 11 April 2023 with the respondent with the
facts and without breach of confidentiality to third parties.

Njue testified that she is an investigator responsible for forensic audits within the respondent.
In October 2022 she was requested to conduct investigations at the Nkrumah branch into the
account held by D.M. Kanyi following initial internal reviews which revealed potential
anomalies in the management and operations of the account.

The investigations revealed the following;

a) The loan account had a history of repayments falling into arrears month-on-month but
a single bulk repayment of Ksh.1,488,500 cleared the September to November 2023
repayments. At the time of investigations, the loan account was in arrears of two
months;
b) The claimant as branch manager gave his commitment to the approvers that he would
ensure the customer would channel his rental income through his Absa account but
the commitment did not materialize;
c) The claimant made a cheque deposit of Ksh.500, 000 into the customer account on 31
January 2023, it was reversed with a counter withdrawal followed by a cash deposit.
This payment was done at the time the customer was struggling with loan repayments
and hence the deposit by the claimant was used to clear the mortgage arrears;
d) The claimant explained his conduct that he had purchased a house from the customer
but the land agreement had several discrepancies and the copy filed had not been
properly executed.

Njue filed her report dated 26 April 2023 stating the facts without breach of confidentiality to
the third parties involved.

The respondent called Odhiambo who testified that he is the head of employment relations
and wellness with the respondent and conversant with the matter. On 16 January 2019 the
claimant was employed as a branch manager in Nairobi and on 24 March 2021 he was
promoted to branch manager, Nkrumah branch.

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Under the letter of appointment, clause 4 bound the claimant under the regulatory compliance
and dealing rules to comply with all legal and policies of the respondent. The respondent also
places various internal policies and guidelines to regulate the conduct of employees including
the Absa Way Code of Ethics of 6 October 2020 and the Absa SME Banking Procedures
Manual.

All employees are expected to familiarize and comply with these policies and ensure they
maintain high ethical standards, be honest and avoid conflict of interest.

Odhiambo testified that from October 2022 to March 2023 internal reviews and
investigations of operations at the Nkrumah branch revealed a breach of policies and
procedures concerning two accounts of D.M. Kanyi and Safinah Petroleum Limited. The
account held by D.M. Kanyi had outstanding facilities which had been taken over from other
banks and remained in arrears while the account held by Safinah had a short-term loan
facility since May 2022 and despite having cash flow issues, the customer continued to
receive more excesses.

Internal investigations revealed a breach of the bank SME procedures on the part of the
claimant who failed to ensure the excess to Safinah's account was paid within 10 days and
also failed to ensure that the customer refers stream code was properly updated despite these
issues, he was given an excess of Ksh.4 million for 14 days.

Investigations revealed that in the account of D.M. Kanyi the customer was granted an equity
release facility of Ksh.39.2 million on 30 March 2022 but the account was flagged for loan
arrears and breach of approval terms by way of rental income not being channeled through
the Absa account. The claimant deposited Ksh.500, 000 in the customer account on 31
January 2023 to cover the loan arrears and as the manager he had committed to ensuring that
the customer made rental deposits but this was not done.

Under the bank policy, the claimant was required to file a C-Zone form notifying the
respondent of the potential conflict of interest posed by his dealing with the customer but he
neglected to do so.

Odhiambo testified that the respondent invited the claimant to show cause following the
investigations which revealed serious breaches of the policy and procedures and his
explanations were found not satisfactory. He was invited to attend a disciplinary hearing and

Page 10 of 20
again his representations were found unsatisfactory leading to termination of employment
through notice dated 26 May 2023. He was paid his terminal dues including;

a) One-month notice pay;

b) 15 days accrued leave days for the year 2023;
c) A certificate of service.

The claim for the unpaid bonus is discretionary or based on contractual obligations which
were not in the claimant’s contract. Bonus is only due to an employee who is not under
investigation or subject to a disciplinary hearing under the policy.

Salaries were reviewed based on the policy and discretion of the employer. Following
termination of employment, the claimant received all terminal dues and the suit should be
dismissed with costs.

At the close of the hearing, both parties filed written submissions which are taken into
account and the issues which emerge for determination are;

Whether there was unfair termination of employment;

Whether there was a breach of constitutional rights;

Whether the remedies sought should be issued.

Termination of employment is allowed under the provisions of Sections 35, 41, 43 and 45
where the employer issues notice upon the employee noting misconduct on the grounds of
poor work performance, incapacity or capability. Upon the notice, the employee must be
allowed time to the respondent and attend to make his representations as held in the case of
Willie Kipkpech Langat v County Public Service Board & 2 others [2022] eKLR and in
the case of Josephine M. Ndungu & others v Plan International Inc. [2019] eKLR.

Through notice dated 26 May 2023, the respondent terminated the claimant in his
employment because he engaged in irregular and unauthorized overdraft facilities advanced
to bank customers at the Nkrumah Road branch under his leadership. The claimant violated
the bank policies and procedures by engaging in irregular lending for two separate customers
INO Safinah Petroleum and D.M. Kanyi.

The respondent gave the claimant the particulars of the grounds for termination of
employment.

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On the allegations that the claimant engaged in irregular advancing of loan facility to DM
Kanyi, the details were that;

a) He supported the loan application of Ksh.39.2m which was disbursed exceptionally

on account of his commitment to Leadership that he would ensure the customer
channeled his rental income through the Absa account and ensure the loan was repaid
to completion but the claimant failed to follow through and the client failed to pay the
loan leading to arrears.
b) There were inconsistencies in the responses given and the claimant resulted in
blaming junior employees but the records demonstrated he was dishonest;
c) Investigations revealed that the claimant had single-handedly handled the customer
contrary to due process;
d) On 31st January 2023 the claimant unprocedural and under unclear circumstances
made a cash deposit of Ksh.500,000 from his staff's current account into the customer
account which was used to repay the mortgage arrears in the customer account;
e) Contrary to laid down guidelines, the claimant engaged in unauthorized dealings with
the customer and failed/ignored to make full disclosure to management on the
potential conflict of interest in his dealings with the customer.

Concerning the grounds that the claimant did unauthorized overdraft facilities advanced to
Safinah Petroleum, the particulars were that;

a) On 13 February 2023 the claimant asked for an extension of excess approval of Ksh.4
million for 10 days and before it was paid, on 27 February 2023 a transfer was made
over the counter for Ksh.1.66 million against insufficient funds in the customer’s
account. The claimant failed to ensure that previous excesses were cleared before
granting new excess per the procedure;
b) On 3 March 2023 the customer's short-term loan matured increasing the account
excess balance to Ksh.7,977,261 in addition to the earlier excess as per the 10 days
request and this was not reported to the CCRS per procedure;
c) The customer was allowed to open a new personal account on 1 st March 2023 to
facilitate the ABF payment which was in arrears and possibly avert reprocessing of
ADF as well to abandon the overdrawn CBSA;
d) While it was expected that the claimant understood the guidelines and processes of
recoveries, on 13 March 2023, without a reasonable cause he initiated the issuance of

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 a repossession order for the customer’s vehicle while the ADF was not in arrears thus
exposing the respondent to litigation;
e) The claimant was careless in the performance of his duties by failing to ensure that
the customer refer stream codes were properly updated as required by the process who
should have been responsible for the excess requests and management of the account;
f) By the careless lending, the claimant failed his fiduciary duty to the bank, exposing it
to a potential loss of Ksh.7, 966,261 and hence the respondent lost confidence in the
claimant.

On the allegations made against the claimant, indeed, he had the right to own property and to
enjoy his constitutional right under Article 43 of the Constitution. However, as an employee
of the respondent, being a senior officer and branch manager, the claimant was privy to
internal dealings between the respondent and third parties such as D. M. Kanyi who had a
bank facility and was required to service his Ksh.39.2 million loan facility through rental
deposits for the secured mortgage. However, the customer had arrears and the claimant opted
to buy a unit and made a deposit of Ksh.500, 000 on 31 January 2023 while the customer
account was in arrears.

Whereas the respondent had a policy on how to recover loan repayments that were in arrears,
for the claimant to transact with the customer or a defaulting loan repayment customer, he
was bound under the policy on conflict of interest. The requirement to submit his C-Zone
form on conflict of interest was a contractual requirement which he failed to address.

The claimant testified that he filed the conflict of interest form in the C-Zone system and the
same is in the custody of the respondent, but this evidence is negated by the fact that the
alleged sale agreement for the purchase of the unit from D.M. Kanyi was taken through a
forensic audit by Ms. Njue and found to have several discrepancies. Fundamentally, it lacked
execution by an advocate to authenticate the transaction. It was not a proper sale agreement.
It cannot support or justify the claimant’s transaction with D.M. Kanyi. The policy on conflict
of interest existed to secure the claimant against undertaking transactions that potentially
tainted his employment while the respondent was secured from insider trading to its
detriment.

In this case, the court finds there was a conflict of interest specifically addressed under
Clause 9.9 of the Absa Way Code of Ethics. Under the terms and conditions of employment,
the claimant was in breach of this code.

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On the Safinah account, the claimant was the overall officer at the Nkrumah branch as the
manager. The staff under him were overall reporting to him. Shifting blame to these officers
is contrary to the letter of appointment giving the claimant overall leadership at the branch.

The claimant testified that he was aware that on 25 January 2023 the customer, Safinah
sought a second excess approval of Ksh.4 million to be paid in 14 days. These transactions
were not cited in the CCRS. Further on 13 February 2023, the excess was extended for 10
days and before being paid up on 27 February 2023 a transfer over the counter for Ksh.1,
665,000 was done against insufficient funds in the customer account. Moreover, the excess
allowed for 10 days was noted as due on 24 April 2023 whereas it had been granted on 27
February 2023.

As the overall responsible officer for activities in the Nkrumah branch, the claimant cannot
blame the SME department or that he was not conversant with the policies to be applied.
Ultimately, the directions by the claimant to Gillian Karimi to issue a repossession order for
the customer’s vehicle on 13 March 2023, while the asset Financing facility was not in
arrears, this act, confirms that he was well versed with the matter and running of the
account(s) of Safinah. The claimant cannot extricate himself from responsibility and the
fiduciary duty held as the branch manager for the respondent. Such conduct exposed the
respondent.

The court finds the claimant liable for his conduct in failing to undertake his duties properly
and as required by the employer.

It is acknowledged that the banking sector it sensitive and highly regulated through its
policies and the Central Bank of Kenya. Breach of fiduciary duty extends to third party and
the conduct of the claimant justified the sanction taken and termination of employment.

Similarly, certain positions such as a branch manager of a bank, attract a high calling of
integrity and financial probity. Once held, great responsibility and accountability is called for.
As the branch manager, of the Nkrumah Road branch, Mombasa, the claimant had bigger
accountability beyond what his junior staff held. In the case of Celina Nadite & 19 others v
National Police Service Commission [2019] eKLR the court held that where an employee
fails to give a proper account of his financial probity and integrity, the employer is allowed
under the provisions of Section 43 of the Employment Act to lawfully terminate his
employment. In the case of Violet Kadala Shitsukane v Kenya Post Savings Bank [2020]
eKLR the Court of Appeal in addressing a similar matter held that;

Page 14 of 20
 Banks are custodians of their customers’ funds and other valuables of a personal
nature and operate in a highly sensitive environment therefore, in order to inculcate
and maintain customer confidence, banks and their staff are required to maintain a
high degree of integrity, prudence and financial probity. It follows that where a staff’s
conduct in relation to funds and valuables belonging to customers points to fraud,
such a staff risks termination of his or her employment. …

In this case, the respondent bank is finance-sensitive and the position held by the claimant as
branch manager is similar to that of a financial custodian and other valuables. Conflict of
interest and lapse in the fiduciary duty bestowed on him is capable of affecting the financial
position of the respondent and such breach and violation is capable of initiating fraudulent
transactions. This is noted in the case of Agnes Murugi Mwangi vs. Barclays Bank of
Kenya Limited (2013) eKLR and Evans Kamadi Misango v Barclays Bank of Kenya
Limited (2015) eKLR where the court held that;

… In the business of handling other people's money and in order to maintain

customer confidence, they must demonstrate a high degree of integrity and financial
probity. This standard must of necessity extend to the employees of the Bank who are
its face. The Claimant's conduct fell below this standard and I find that the
Respondent had a valid reason for terminating her employment

In this case, the claimant was called to account for his conduct and his responses were found
unsatisfactory. He admitted to buying a housing unit from a customer without a proper sale
agreement which is in conflict of interest and to failing to address irregularities concerning
the allocation of excesses within his branch which is in breach of the lending procedures. The
claimant was invited to a disciplinary hearing and failed to explain his conduct and hence
found culpable of misconduct leading to termination of employment.

In this case, termination of employment was justified and the claimant was taken through due
process.

On the claims made, the reasons leading to termination of employment address, each claim
should be addressed on the merits. Any terminal dues owed to the claimant and based on the
law should be assessed and addressed accordingly.

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Upon the termination of employment through a notice dated 26 May 2023, the respondent
offered to pay notice pay. However, there is no record of this payment. The sum of Ksh.647,
218 is due in notice pay.

On the findings above, termination of employment was found justified, and compensation is
not due.

On the claim that there was defamation of the claimant by the respondent following the
publication of his matters following an incident on 6 April 2023, the claimant's case is that
the respondent hired private investigators to follow him and submit a report. The response is
that this court lacks jurisdiction to hear defamation claims. The need to follow up on the
claimant on his engagements after work was not given context vis-a-vis the issues at hand
relating to his work conduct.

Defamation in employment is prohibited. In the case of Naqvi Syed Omar v Paramount

Bank Limited & Another [2015] eKLR the court held that;

In Employment Law defamation takes place when the Employer publicizes or causes to
be publicized, statements which stigmatize the Employee. The manner of dismissal and
the negative publicity attached to the Petitioner had the potential to damage his
employability. … In employment-related, defamation is based on the old tort of
defamation but with a new spin: the employee’s injured or damaged employability and
not merely the personal stigmatization must be compensated.

It is not contested that through email dated 20 March 2023, the claimant wrote to Arrie
Rauttenbach, the CEO on issues he noted as victimization and nepotism. This was not
addressed and instead, while on suspension, the respondent engaged a private investigator
into his personal and private conduct and followed him in public, restaurants and pubs and
also demanded to be supplied by different establishments with information in violation of his
rights. The use of such data collection is not stated in the response. The witnesses called by
the respondent only addressed the issues of internal investigations.

Breach of privacy is contrary to Article 31 of the Constitution.

In the case of Jessicar Clarise Wanjiru v Davinci Aesthetics & Reconstruction Centre &
2 Others [2017] eKLR the court defined privacy of the person to include;

The right of the individual to be protected against intrusion into his personal life or
affairs, or those of his family, by direct physical means or by publication of
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 information. In the above sense any intrusion of personal life by whatever means or
form such as photography, written articles or caricatures may be ground for an
action for breach of privacy.

Even in employment, protection of the employee privacy is imperative. Where there is a

breach of an employee's privacy, an employer cannot justify a position that the court lacks
jurisdiction and then fail to address where there was a need to collect personal data and
information unrelated to the employment. The rationale is addressed in the case Coalition for
Reform and Democracy (CORD) & 2 others v the Republic of Kenya & 10
others [2015] eKLR where it was held that;

Protecting privacy is necessary if an individual is to lead an autonomous,

independent life, enjoy mental happiness, develop a variety of diverse interpersonal
relationships, formulate unique ideas, opinions, beliefs and ways of living and
participate in a democratic, pluralistic society. The importance of privacy to the
individual and society certainly justifies the conclusion that it is a fundamental social
value, and should be vigorously protected in law. Each intrusion upon private life is
demeaning not only to the dignity and spirit of the individual but also to the integrity
of the society of which the individual is part.

The conduct of the respondent leading into the investigations of the claimant’s private life in
the context of matters ongoing at the workplace is not justified. No basis was given for such
conduct.

The claimant was a senior employee of the respondent and whatever conduct he engaged in
after office/work hours, where this was found contrary to his letter of appointment and
workplace policy, recourse was to invite him to address. Engaging in private investigations
and then failing to bring such matters to the claimant to address as an employee was not
justified. His constitutional rights under Article 31 were breached by the respondent.

In the case of Daniel Musinga T/A Musinga & Co. Advocates v Nation Newspapers
Limited (2006) EKLR, the court in awarding the Plaintiff Kshs.10, 000,000/- damages for
defamation stated;

The court has to look at the whole conduct of the parties before action, after action and in
compensatory damages such sum, as will compensate him for the wrong he has suffered.

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 An award of damages must cover injured feelings, the anxiety and uncertainty undergone
during the court trial.

In employment and labour relations, damages can be awarded to an employee under the
provisions of Section 12 of the Employment and Labour Relations Court Act. The parameters
to be considered in my view is aptly addressed in the D.K.Njagi Marete v. Teachers Service
Commission (2013) e-KLR whether the Court emphasized the need for proportionality and
fairness in evaluating the suitability of employment remedies. The demands of social justice
must be weighed carefully, against the needs of economic development;

… Ultimately, the purpose of compensatory awards is not to punish errant employers,

however egregious their decisions against their employees be; the objective is to ensure
economic injury suffered by the employee, is adequately redressed.

The claimant had served the respondent well until matters were brought to his attention
through notice to show cause dated 17 March 2023. Internal investigations conducted
revealed various breaches but this did not justify a violation of his privacy rights secured
under Article 31 of the Constitution. The facts weighed and similar case law addressed,
general damages claimed at ksh.5, 000,000 is hereby found justified.

The claim for character assassination is addressed as above. Context is also given that the
claimant has mitigated his loss of employment by securing new engagements and self-
employment initiatives.

On the claim for bonuses for the year 2022 at Ksh.2,300,000 The respondent contested the
same on the basis that under the policy, this was discretionary and that where the employee
was subject to investigations, such was not payable. The policies applied by the respondent
must protect both parties equally. On the one part, the subject policy required that upon the
close of year, each employee enjoying a bonus for good performance should receive
communication form the supervisor which the claimant received from Dunfold Odanga that
following his excellent performance, he had earned a bonus. This related to the year 2002
way before disciplinary proceedings were brought to the claimant’s attention. The announced
bonus cannot be negated after the fact of its communication. Disciplinary procedures were
only initiated against the claimant through the notice to show cause dated 17 March 2023.
Going back to sanction him and deny him a benefit accrued backwards and relating to his
performance in the year 2022 is to engage in unfair labour practices.

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The claimant is entitled to the claim of Ksh.2, 300,000 in unpaid bonuses for the year 2022.

On the claim for salary increments at 13% from January 2023 to May 2023, the discretion not
to award such payment upon the respondent is removed the moment a policy was issued that
was known to all employees that such percentages were due. From March to May 2023
during the disciplinary process, the claimant was not in control of his employment. The time
taken to address the workplace misconduct should not deny him the due benefits while
employment subsisted. Submissions by the respondent that the salary increase was purely
discretionary vis-a-vis the records and policies placed before the court are not correct.

Employment rights can be secured contractually, through workplace policies and practices
and agreements. In this case, the court finds the claim of a 13% salary increase from January
to May 2023 justified at Ksh.647, 218.

On the Certificate of Service, best practice demands that the employee should clear and the
same issued under the provisions of Section 51 of the Employment Act.

On costs, the claims addressed above, each party bears its costs.

Accordingly, judgment is entered for the claimant against the respondent in the
following terms;

a) A declaration that there was a violation of constitutional rights;

b) General damages Ksh.5,000,000;
c) Unpaid bonuses for the year 2022 ksh.2,300,000;
d) Notice pay Ksh.647,218;
e) Unpaid salary increments at 13% from January 2023 to May 2023 Ksh.373,294;
f) The claimant to complete clearance for issuance with a Certificate of Service;
g) Each party bears its costs.

Delivered in open court at Mombasa on this 1st day of October 2024.

M. MBARŨ
JUDGE

In the presence of:

Court Assistant: Japhet

……………………………………………… and ……………………..……………………

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