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Introduction
1. Contending that at all material times he was an employee of the Respondent, whose employment was unfairly terminated, the Claimant sued the Respondent through the Memorandum of Claim herein, dated 15th July, 2019, seeking;
a) An order that the Respondent reinstates the Claimant to its employ, and in the alternative;
b) Twelve (12) months'' salary in compensation for unfair termination at Kshs. 141,184/=per month;
c) Service pay at the rate of one month''s salary for each of the four (4) years completed in service;
d) Kshs. 53,036.50/=unlawfully deducted from final dues;
e) The withheld salary from 30th May,2018 to 8th April, 2019;
f) Issuance of Certificate of Service;
g) Cost of this suit.
h) Interest on (b), (c), (d), and (e) from the date of filing the claim till full payment.
2. The Respondent opposed the Claimant’s claim via the Statement of Response dated 26th August 2019. While acknowledging that the Claimant was their employee, the Respondent contends that he was lawfully summarily dismissed for gross misconduct.
Claimant’s case
3. The Claimant stated that he was hired by the Respondent on 16th February 2015 as an Assistant Bank Officer I following a successful interview. He was initially employed on probation and was confirmed in his position on 13th November 2015. His starting salary was KShs. 72,226.50.
4. After completing one year of service with the Respondent, he applied for and was granted a house loan amounting to KShs. 3,612,000. Furthermore, on 24th August 2016, his salary was increased to a gross total of KShs. 136.960.
5. During his employment, Imperial Bank Limited (IBL) was placed under receivership, and Kenya Deposit Insurance Corporation (KDIC) was appointed to manage and control it on October 13th, 2025. Due to KDIC''s insufficient staff, the Respondent seconded some of its personnel to assist. The Claimant was among those seconded.
6. He initially served at the Kizingo and Watamu branches before being ultimately transferred to the Lokoni branch, where he assumed the role of Receiver Manager. His responsibilities encompassed supervising daily banking operations. He was authorised to incur expenses below KShs. 10,000 without prior approval.
7. He stated that between July 2017 and February 2018, he authorised a Ramtons coffee maker, an HP printer, and a Samsung television to be taken out for repairs, with proper exit passes and entries in the Occurrence Book, and delivered them to Almasi Electronics. The items were recorded in the occurrence book of Wells Fargo Security firm, which was managing the security at the branch.
8. On April 26, 2018, he was reinstated to the Respondent''s employment. Before leaving the Likoni branch, he prepared a detailed handover memorandum listing all branch assets, including those outside the branch. The memorandum was duly signed, witnessed, and acknowledged by the new Receiver Manager.
9. On or around April 26, 2018, he commenced his annual leave. Upon his return, he was served with a letter dated May 22, 2018, alleging gross misconduct for the removal of a television, a colour printer, and a coffee maker from the Bank. He submitted his response to these allegations on 23rd May 2018.
10. On 30th May 2018, he was suspended from duty and placed on half pay. He was asked to show cause why disciplinary action should not be taken against him. On 6th June, 2018, he responded to the show-cause letter.
11. He further stated that on 5th July 2018, the Respondent notified him of a hearing scheduled for 13th July 2018. He attended the hearing. During the proceedings, the Respondent examined witnesses whose statements had not been supplied to him. Additionally, the witnesses testified in his absence, thereby denying him the opportunity to cross-examine them.
12. He stated that on 9th August 2018, the Respondent notified him of a further hearing scheduled for 21st August 2018, but through another notice dated 20th August 2018, the hearing was postponed to 24th August 2018. The letters required him to supply the names of his preferred representative in advance, which he did. Surprisingly, his representative was not allowed to speak on his behalf or at all.
13. On 3rd October 2018, he was summarily dismissed. The dismissal letter listed several reasons, including removing items contrary to regulations governing the movement of assets, although such regulations did not exist in reality.
14. He appealed against the dismissal to the Respondent’s Disciplinary and Grievance [ D&G] Committee, Tier, on 11th October,2018 and requested proceedings to enable him to prepare for the appeal. On 15th October, 2018, the Respondent confirmed receipt of the appellant''s appeal and promised to get back to him regarding the request.
15. In preparation for his appeal, he contacted one of the employees of Almasi Electronics, Leonard Mumba, since the proprietor, Bakari Hashim Swaleh, had been threatened by the Respondent’s agents and was unwilling to testify in support of his defence.
16. Eventually, on 4th February 2019, he attended the hearing of his appeal. However, when he sought to introduce the affidavit of Leonard Mumba Jimbi, the Committee flatly refused, even though it was new evidence not considered at the disciplinary hearing and could have affected the outcome of the appeal. He was not allowed to argue his appeal. The appeal was dismissed, and this was communicated in a letter dated 8th April, 2019.
17. On 6th May, 2019, he was acquitted in a related criminal case under section 210 of the Criminal Procedure Code.
18. He stated that by its letter dated 31st May 2019, titled ''Statement of Final Dues.'' Despite having cleared his house loan, the Respondent unlawfully deducted KShs. 53,036.50.
19. The Claimant’s witness, Leonard Mumba Jimbi, stated that he was a former employee of Almasi Electronics in Kongowea, where he worked for four years alongside the proprietor, Bakari Swaleh Hashim, and another colleague. Their business mainly involved repairing electrical and electronic gadgets.
20. He confirmed that in 2017, he personally saw the Claimant bring a Ramtons coffee maker and a coloured HP printer for repairs at their shop. Upon testing, the printer''s heater was faulty, and the coffee maker''s power cord was worn out. The items were logged and job cards issued according to their usual process, but no repairs were performed because no payment was received.
21. He further recalled that in early 2018, the Claimant also brought in a 40-inch Samsung television for diagnosis, which powered on but showed no images, likely due to a faulty circuit board. Once again, no repairs were carried out due to non-payment. When demolition threatened their business premises, the proprietor called the Claimant to collect his items, which he did.
22. During his cross-examination, the Claimant testified that he committed himself to adhere to the terms and conditions of employment, including the obligation to perform his duties with high standards of professionalism and integrity.
23. The Claimant further testified that, although under the contract the Respondent had the discretion to transfer him between stations, it did not have the authority to unilaterally alter his job description from a Security Officer to a Bank Manager. Under the employment contract, his title was “Assistant Bank Officer.”
24. Under Clause 7 of the contract, his job description was to be provided to him by the Head of Department. He reported to the Head of the Security Department, who assigned him duties from time to time. He did not at any time raise any objection concerning duties allocated to him.
25. He testified that during his period of employment, he did not engage with the Respondent’s Staff Regulations [Revised] July 1996, which were repealed in 2014, before he joined the Bank.
26. Mr Mahmoud Mohammed, the CEO of KDIC, was his immediate supervisor, not the Imperial Bank Branch Manager, Kisingo, Mr Mumba, who was his contemporary.
27. In discharging his duties, he was required to ensure value for money and to comply with procurement procedures. He did not seek bids for the repair of the items in question, as someone [Almasi Electronic shop] had been repairing them for the Bank. There are documents on record to show this.
28. Mr Mumba and Mr Mwandoro signed the handover memo. On the back side, the items in question were listed. They were listed because, at that time, they were not in the bank, and he was the one who authorised their removal from the bank. He had to write them down and sign as a sign of taking responsibility.
29. Cross-examined further, the witness testified that in his witness statement, he stated that he removed the three items from the bank and took them for repair at different times. However, the job card by Almasi lists all of them.
30. He further testified that he wrote the letter dated 23rd May 2018 under pressure from the police while in police cells. He wrote the same at their dictation. In the letter, he stated that the repairers dropped the items at his house.
31. It is further evidence that his witness, Mr Jimbi, states in his witness statement that the items were never repaired because the repairs were not paid for. This contradicts his witness statement, which states that the items were repaired.
32. He was suspended on 30th May 2018, via the letter dated the same day. The letter mentioned the three items included. He responded to the suspension letter on 6th June 2028. In his reply, he did not state that the information collected from his house was incorrect.
33. There was a recommendation for his suspension. This was communicated via a memo from the Acting Human Resource Manager addressed to the Governor. The memo received the Governor''s approval on 29th May 2018.
34. The Respondent’s Human Resources Manual provided for the disciplinary procedure for misconduct and investigations. It provided the right to accompaniment during a disciplinary hearing. The Manual also provided for sanctions for misconduct and gross misconduct.
35. He testified that he was heard by the Tier 1[DNG] Committee on 13th July 2018 and 24th August 2018, and a decision was made on 3rd October 2018. He was informed of the right to appeal. On 11th October 2018, he exercised his right of appeal. He was heard on the appeal. Subsequently, the appeal was dismissed.
36. The Respondent calculated his terminal dues at KShs. 347.30, less liabilities, and paid him KShs. 149,905.30. At the time of the calculation, he had already duly settled his outstanding loan in cash.
37. His demand letter did not mention the improperly deducted sum, as at that time, the Respondent had not computed the figures and paid him his dues.
38. The High Court overturned his acquittal by the Magistrate in the criminal case. Since then, he has not been re-acquitted by the Magistrate’s court.
39. The Claimant presented a witness, Mr. Leornard M. Jimbi, to testify in support of his case. He stated that he is an Electrician by profession. Mr Bakari and Mr Katana were his fellow Electricians.
40. The witness recalled that at one point, the Claimant took the three items—a Ramtons Coffee Maker, a coloured HP printer, and a Samsung 40-inch television—to be repaired. They were not in working condition.
41. The witness stated that he was summoned to appear before the Disciplinary Panel to give evidence, but the Bank refused to take his testimony because he was a stranger to them. They could not hear anybody from outside the Bank. It was the bank that had called him to testify.
42. He later came to know that the Respondent terminated the Claimant’s employment because of the items.
43. He [the witness] had testified in the criminal case against the Claimant. The Claimant was later acquitted.
44. Cross-examined by the Respondent''s Counsel, the witness stated that he had been employed by Almasi Electronics since 2014. He specialised in handling electronic items. Upon receiving items into the shop, they would first perform a diagnosis on them and then raise a job card.
45. After raising the job card, they would provide a quotation. If the customer paid, they could then proceed with the repair works. If not, the items would be kept until the outstanding payments were settled. The quotation was either verbal or in writing. In this case, there was no written quotation.
46. Imperial Bank was their customer. They had previously repaired items for them. Usually, they settled the charges in cash. The claimant also had previously engaged them to repair his items and others belonging to the Bank.
47. He did not open the Television to know what its problem was or give a quotation for its repair.
48. The shop owner contacted the Claimant to collect his items. He did so, but the witness was unaware of where he had taken them.
49. It was the Claimant who called him to testify before the Disciplinary Panel, but the Bank failed to receive his evidence, dismissing him as a stranger. He could not remember the exact date when the Claimant asked him to do so. Too, he could not remember the date when he travelled to Nairobi to testify.
Respondent’s case
50. 50. The Respondent’s witness, Anne Muoki [RW1], stated that at the material time she was employed by the Respondent Bank but was seconded to Imperial Bank as an Assistant Receiver Manager, which was under receivership. In that role, she was responsible for establishing payment stations for Imperial Bank’s depositors.
51. She was posted to Mombasa to establish payment stations for depositors in the Coast region, and she found the Claimant and another officer already seconded there to assist with receivership duties. She fully briefed the Claimant on his expected roles and responsibilities at the IBL branches, including the Likoni Branch.
52. She further stated that during her tenure as Assistant Receiver Manager, no items were moved from IBL branches for repairs. According to her, an internal maintenance person handled faults, and in cases of major repairs, external technicians would only be engaged after quotations were provided and approval from the Receiver Manager in Nairobi was obtained.
53. She also stated that all payments for repairs were processed and paid from Nairobi upon approval. She concluded that, based on this, the Claimant’s claim lacked merit.
54. Cross-examined by the Claimant''s Counsel, the witness stated that the Claimant held a Bank Office position at the Respondent’s. The role was of a low cadre. At the Bank where he was assisting in the receivership process, he was recorded as a representative. In terms of administration, he was equivalent to a Branch Manager. The role he played at Imperial Bank was not the same as the one he played at the Central Bank of Kenya.
55. The Claimant was reporting to her as she was in charge of all the coastal branches of Imperial Bank [in receivership]. Before her arrival in Mombasa, the Claimant was supposed to report to the Receiver Manager [Mahamoud Mohammed].
56. When she was recalled to Nairobi, she handed over to Mr Fredrick Mumba, the Operations and Administrative Supervisor of Imperial Bank Branches in the Coastal Region.
57. The termination of the Claimant’s employment at CBK was due to an alleged theft of some items at the Likoni Branch. Contracted security firms were guarding the branches. They checked people leaving the branch to ensure they did not carry the bank’s property. Anything belonging to the bank was recorded.
58. The Respondent’s witness, Elizaphan Karianjahi [RW2], stated that he was instructed to investigate a report of property loss at Imperial Bank (IR), Likoni Branch. He travelled to Mombasa and interviewed staff members at the branch. From these interviews, he was informed by a Wells Fargo security guard, Mr Maloba, that the Claimant had taken an AVR and a coffee maker to his house for personal use. He also said that he was told that on 11th September 2017, the Claimant removed a colour printer from the office to his house, and this removal was recorded in the Occurrence Book.
59. He further stated that he received information that on 6th February 2018, the Claimant instructed a cleaner to demount a Samsung 54-inch TV and take it to his car, and that the Claimant confirmed he was taking it for his own use. He later recovered items from the Claimant’s house.
60. He also stated that he contacted the alleged fundi whose number had been provided by the Claimant, but the person declined to cooperate. He added that the signal indicated the fundi was in Mtwapa. He stated that the three items were tested and found to be in good working condition, with no signs of tampering on the television.
61. Cross-examined by Counsel for the Claimant, the witness testified that when Imperial Bank was placed under receivership, the Respondent seconded its employee, including the claimant, to Imperial Bank to assist in managing the bank''s affairs.
62. The Claimant was dismissed because he took items from Imperial Bank, which he was supposed to safeguard, for his own use.
63. He was issued a show-cause letter. The Bank also asked him to write an apology letter for the infraction committed. After apologising, he was suspended.
64. He suspected the items had been stolen. All the items were tested and found to be intact. They had not been tampered with at all. They were tested in the absence of the Claimant.
65. He further testified that she was a witness at the disciplinary hearing, acting as an investigator. When she testified before the Disciplinary Panel, the Claimant was not present. According to the Bank Rules, he didn''t need to attend. Therefore, the Claimant did not have an opportunity to cross-examine her.
66. Respondent’s Witness Elizabeth Wanjiru [RW 3] confirmed that the Claimant was appointed on probation in February 2015 and was confirmed in November 2015. His salary was adjusted in August 2016, and he was seconded to Imperial Bank Limited under receivership until 26th April 2018.
67. She stated that during the Claimant’s tenure at Likoni Branch, he unlawfully removed a 54-inch Samsung TV, a colour printer, and a coffee maker under the pretext of taking them for repairs, but instead transported them to his residence for personal use. She affirmed that the items were subsequently recovered from his residence in May 2018.
68. The conduct of the Claimant was contrary to the Respondent’s Staff Rules and Regulations [Revised] July 1996, which in Rule 3.1 require absolute integrity and honesty in the performance of duties.
69. She further explained that the Claimant received a show cause letter, responded to it, and was suspended on half pay with the Governor’s approval. She verified that investigations confirmed the items were removed without authorisation.
70. The matter was referred to the Disciplinary and Grievance Committee, which recommended summary dismissal. The Claimant appeared before the Disciplinary Committee on 13th July 2018 and 21st August 2018, evaluated the evidence presented to it, and found that he had, without authority, removed the three items from Imperial Bank Limited [IR], Likoni Branch. The conduct amounted to gross misconduct. In exercise of its powers under Clause 14.1.3 [v] of the Respondent’s Disciplinary Policy, the Disciplinary & Grievance Tier 1 Committee recommended to the Governor that the Claimant be summarily dismissed.
71. She stated that the Governor adopted the recommendation, and the Claimant was dismissed on 3rd October 2018. She also stated that the Claimant appealed, the appeal was heard and rejected, and final dues were calculated and communicated to the Claimant.
72. She further stated that the Claimant had been charged in a criminal case and subsequently acquitted; however, the Respondent asserted that the acquittal did not absolve him from disciplinary liability.
73. In her evidence during cross-examination, the witness testified that she was not sure whether or not the revised edition of the Respondent’s Human Resource Guidelines, 2014, ousted the applicability of the 1996 version.
74. The Human Resources Policy and Guidelines specify the right of appeal [under clause 7. A] and the admission of new evidence. The affidavit of Mr Jimbi was not considered new evidence. In the initial hearing, the Committee refused his proposal that he calls the deponent of the affidavit.
75. In his appeal letter, he requested the proceedings and decision of the Disciplinary Committee. The Respondent did not supply him with them.
76. She admitted that, though she mentioned an Asset Movement Register in her witness statement, the document has not been presented in evidence in this matter.
77. Clause 14.1.4 of the Guidelines outlines the fundamental principles of the disciplinary process, including due process and the rules of natural justice. She further testified that witnesses testified for the employer [Respondent] in the absence of the Claimant. He did not have a chance to cross-examine them.
78. The policy provides for the composition of the Appeals Committee. Its membership shall exclude members of the Discipline and Grievance Committee that handled the disciplinary/grievance matter, except the Director of Human Resources. During the disciplinary hearing of 13th July 2018, one Kennedy Abuga was a member. He was also a member of the Appeals Committee on 4th February 2019.
79. During the hearing, the representative, an employee of the Bank, stated that members of staff, Mombasa branch, were unwilling to testify for the Claimant’s case, as they feared they would be prejudiced in their employment.
Analysis and Determination
80. I have carefully considered the pleadings by the parties, their evidence, and the overly lengthy submissions by their respective Advocates, and the following issues emerge for determination;
I. Whether the summary dismissal against the Claimant was fair.
II. Whether the Claimant is entitled to the reliefs sought.
Whether the summary dismissal against the Claimant was fair.
81. Section 45[1] of the Employment Act prohibits unfair termination of an employee’s employment, and under subsection 2 highlights what would constitute unfair termination. Unfair termination arises where it is without is without procedural fairness and substantive justification [ with reason[s] that is valid and fair]. It bears repeating that absence of any or both of these two components would render the termination unfair.
82. In the case of Naima Khamis v Oxford University Press E. A Limited [2017] eKLR, cited in Pandya t/a Ziwa Resort and Bamburi Beach Resort v Katana [2024] KEERC 1826 [KLR], cited by Counsel for the Respondent, the Court of Appeal, elaborating on this, stated;
“…………..we wish to take note of the provisions of section 43[1] of the Employment Act, which provides that in any claim arising out of termination of a contract, the employer is required to justify the reason or reasons for the termination, and where the employer fails to do so, the termination is deemed to have been unfair,
Also, Section 45[2] requires a termination to be done according to a fair procedure. From the foregoing, termination of employment may be substantively and/or procedurally unfair.
A termination is also deemed substantively unfair where the employer fails to give valid reasons to support the termination. On the other hand, procedural unfairness arises where the employer fails to follow the laid down procedure as per contract, or fails to accord an employee an opportunity to be heard as by law required.’’
83. Section 41 of the Employment Act,2007, prescribes procedures to ensure procedural fairness in the termination of employment or in cases of summary dismissal. This provision outlines a mandatory process that any employer must follow when considering terminating or summarily dismissing an employee.
84. However, it is pertinent to note that, in assessing whether such termination or summary dismissal was procedurally fair, the requirements of Section 41 should be evaluated in conjunction with other relevant statutory provisions, including those under the Fair Administrative Action Act; constitutional provisions, such as the right to fair administrative action under Article 47, the right to fair labour practices under Article 41, and the right to a fair hearing under Article 50; as well as principles of natural justice and the employer’s Human Resources Policies and Procedures Manual.
85. Recently, in the case of Judicial Service Commission & 2 others v LMN [2025] KESC 53[ KLR], reflecting the changed landscape in disciplinary processes against employees, the court authoritatively declared;
“1. We begin this judgment by declaring that the fairness of any disciplinary process is today a constitutional imperative, irrespective of status of the officer, involved. The process must uphold all the tenets of fair administrative action under Article 47 and the right to fair hearing under Article 50 of the Constitution. In addition to these constitutional safeguards, by the provisions of the Judicial Service Act [JSA], Cap 8A, and the Fair Administrative Action Act, Cap 71, the disciplinary bodies, including the Judicial Service Commission [JSC], are bound to ensure that the disciplinary action against a Judge, judicial officer and staff must strictly comply with both constitutional and statutory requirements.”
86. A careful examination of the submissions submitted by both Counsel for the parties reveals a common aspect: they have both approached the matter from a limited perspective of procedural fairness, heavily relying on Section 41 of the Employment Act, 2007, to the exclusion of other pertinent and essential statutory and constitutional provisions.
87. The Claimant asserted that during the disciplinary hearing, certain witnesses for the Respondent testified in his absence, thereby depriving him of the opportunity to cross-examine them. The Respondent’s witnesses, notably RW2 and RW3, acknowledged that they provided their testimony before the Disciplinary Committee in the absence of the Claimant, thus preventing him from cross-examining them. Inexplicably, the Respondent did not give a reason for this approach; it gave the disciplinary process, which, in my view, glaringly affronted the Claimant’s right to a fair hearing under Article 50 of the Constitution of Kenya, 2010, and the tenets of natural justice.
88. Counsel for the Respondent submitted that, yes, the witnesses gave their testimony without the Claimant cross-examining them. However, this is not a reason to set aside the Disciplinary process, as this was not a trial where an employee is entitled to cross-examine the witnesses interviewed by the D&G. To support this submission, Counsel placed reliance on the case of Kavuma Dianah v National Social Security Fund, Labour Dispute Number 171 of 2021, where the Industrial Court at Kampala stated;
“However, we are mindful that the failure of a witness to turn up for cross examination would not be a standalone reason to declare disciplinary proceedings unlawful or unfair. This is because the standard disciplinary proceeding is not that of a mini-court, as observed by Barishak J. A with Owiny Dallo DCJ [as he then was]and Obura JA, concurring, in the oft-cited case DFCU Bank Limited v Donna Kamuli. In that case, the court notes that all that is required of an employer is to present the allegations to the employee and ensure a right to a hearing. The right to cross-examine is but one of the various rights at the disciplinary hearing, and it would not be a sole reason to declare the disciplinary hearing unlawful or unfair, thereby rendering a dismissal unlawful. In the present case, the Claimant did not ask to cross-examine any witness and the opportunity was refused. We do not agree that the Claimant was not given a fair hearing and decline to make such a declaration.”
89. I am not persuaded by the Counsel’s submissions on this point or the persuasive authority he has cited to support them. The reasoning and decision, in my opinion, do not align with a constitutionally driven labour relations framework like ours, where constitutional rights are incorporated into employment and labour statutes and embedded in employment contracts. Furthermore, the principles of natural justice form the fundamental basis in disciplinary proceedings, as explicitly acknowledged by the Respondent’s Human Resources Policies and Guidelines. In my view, the absence of any element of a fair hearing, which is a part of procedural fairness, can render a termination unfair or wrongful.
90. In the case of Eric Kamande v Judicial Service Commission [ 2025] KESC 48[KLR], the Supreme Court of Kenya held;
“65……………… How was he to defend himself? The audi alteram partem rule, as a basic but fundamental principle of natural justice and fair play, dictates that no one should have their rights negatively impacted without a fair hearing. Conversely, a person accused of a transgression is entitled to cross-examine the accuser under oath in order to test the veracity of the complaints.”
66. The right to a fair hearing is firmly rooted in Article 50[1] of the Constitution…………….”
91. In my opinion, it was the Respondent''s duty to guarantee a fair hearing with all its elements present. It is irrelevant that the Claimant did not raise concerns about witnesses giving evidence in his absence or request their recall for cross-examination.
92. Section 45[5] of the Employment Act provides,
“In deciding whether it was just and equitable for an employer to terminate the employment of an employee, for purposes of this section, a labour officer or the Industrial Court shall consider;
a) The procedure adopted by the employer in reaching the decision to dismiss the employee and the handling of the appeal against the decision. [Emphasis mine].”
93. Undoubtedly, the Claimant requested in writing the proceedings and decision of the Disciplinary Committee to prepare for his appeal hearing against his dismissal. However, he was not provided with them. RW3 confirmed this fact during her cross-examination. The Appeal panel proceeded to hear the appeal regardless and dismissed it. I find no difficulty in concluding that the Respondent’s decision on the Claimant’s appeal was lacking in justice and equity. It is important to emphasise at this stage that propriety should be maintained throughout disciplinary proceedings, including in the manner of issuing a termination letter and handling an appeal against the decision to dismiss.
94. The presumption that an employee is not entitled to call a witness from outside the enterprise to testify in support of their defence against the charges against them persists, despite the altered legal landscape described hereinabove. Confronted with this pervasive assumption, in my opinion, the Respondent did not permit Mr Jimbi, the electrician, to testify as the Claimant’s witness.
95. In my assessment, considering the stance taken by the investigating officer, who evidently did not interview anyone from Alamasi Electronics Shop, and the impressions formed from the documents, such as the Job Card, the witness whom the Claimant sought to call was a vital witness whom the Respondent should have allowed to testify. Refusing to permit him affected the Claimant’s right to a fair hearing, so the Respondent was obliged to provide reasons for the rejection under Article 47 of the Constitution. From the minutes of the Disciplinary hearing, I note that no reasons are recorded.
96. By reason of the foregoing premises, I find that the summary dismissal against the Claimant was procedurally unfair.
97. I now turn to consider the substantive justification aspect of the summary dismissal against the Claimant.
98. In a dispute over the termination of an employee’s employment, section 43 of the Employment Act requires the employer to prove the reasons for termination. If the employer fails to do so, the termination shall be deemed unfair under section 45 of the Act.
99. To discharge this burden, the Respondent, in their pleadings and through their witnesses’ evidence, stated that the Claimant was dismissed for removing electrical items belonging to Imperial Bank Limited [then under receivership] from its Likoni Branch without authorisation. The items were traced to his residence, leading the Respondent to take the position that he had removed them in the manner he did for his own use. The Claimant consistently admitted the removal but contended that it was because he took them for repair. I am of the view that the Respondent discharged their burden under the said provision.
100. However, the obligations imposed upon the employer extend beyond Section 43 of the Act. Additional legal obligations are also mandated by other provisions contained within the Act. Closely related to the legal burden under Section 43 is the requirement under Section 45[2][b] to demonstrate that the reason was fair and valid.
101. Section 44[4] of the Act provides for actions and inactions by an employee that may amount to gross misconduct, thereby justifying their summary dismissal. However, it is imperative to state that the list is not exhaustive.
102. Critically examining the provisions of section 44[3] of the Act, it cannot be safely claimed that it is not sufficient for an employer to simply state that the employee has committed one or more of the acts or omissions listed in section 44[4] of the Act or in its Human Resources Manual. An employee’s misconduct does not automatically justify summary dismissal unless it is ‘so grave’ that it indicates the employee’s abandonment of the intention to remain employed. In the oft-cited case of Laws v Landon Chronicles Limited [1959] 2 ALL.E. R, the court held;
“Since a contract of service is but an example of contracts in general, so as the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.’’
103. Whether the employee’s misconduct attracts dismissal requires an assessment of the degree and the surrounding circumstances, the contextual approach. In McKinley v BC Tel 2001 SCC 38[2001]2SCR 161, the Supreme Court of Canada held, and I agree:
“29. When examining whether an employee’s misconduct justifies his or her dismissal, courts have considered the context of the alleged insubordination. Within this analysis, a finding of misconduct does not, by itself, give rise to a just cause. Rather, the question to be addressed is whether, in the circumstances, the behaviour was such that the employment relationship could no longer viably subsist.
39. To summarise, the first line of case law establishes that the question whether dishonesty provided just cause for summary dismissal is a matter to be decided by the trier of fact, and to be addressed through an analysis of the particular circumstances surrounding an employee’s behaviour. In this respect, courts have held that factors such as the degree of misconduct and whether it violated the “essential conditions” of the employment contract or breached an employer’s faith in an employee must be considered in drawing a factual conclusion as to the existence of just cause.”
104. I have really agonised over this—the length of time the electrical items remained at the Claimant’s house, which, in my view, he did not put much effort into explaining, and which did not receive sufficient explanation, as well as the contradictions in his evidence and that of his witness regarding whether the items were repaired or not. In my view, in the circumstances, any reasonable employer would, as the Respondent did, conclude that the Claimant removed the items from the Bank to his house for his own use.
105. The Claimant contended that the sanction was unfair. That it was contrary to the spirit of the Respondent’s Human Resources Policies and Guidelines, as it was not corrective but oppressively punitive. I have carefully considered the circumstances of the matter, including the role that the Claimant was assigned to undertake at Imperial Bank during the material time, the industry in which he was working, his act fell short of the vital virtue of integrity and professionalism, and that the act in issue would reasonably be construed as an act of dishonesty and misappropriation, and conclude that it was a grave act, which would grossly dent any reasonable employer’s faith in the Claimant. The summary dismissal was on a valid and fair ground.
Whether the Claimant is entitled to the reliefs sought.
106. Section 49 of the Employment Act bestows upon this Court the power to make a compensatory award to an employee who has successfully challenged their employer’s decision to terminate their employment or summarily dismiss them, as unfair. However, it is imperative to point out that the power is discretionary and, as such, exercised depending on the circumstances of each case. I have carefully considered the fact that the Respondent is bearing liability in this case simply because of procedural unfairness, the fact that the Claimant contributed to the dismissal, and the length of his service, and conclude that he is entitled to two months’ gross salary, KShs. 282, 368.
107. The Claimant claimed that KShs. 53,036.50 was improperly deducted from his final dues, allegedly for offsetting an outstanding facility amount. He asserted that he had cleared the loan by paying cash. I have carefully considered the evidence by the Respondent’s witnesses and conclude that none of it rebuts the claimant’s assertion. He is hereby awarded the sum.
108. In the upshot, judgment is hereby entered in favour of the Claimant in the following terms;
I. A declaration that the summary dismissal against him was substantively fair, but procedurally unfair.
II. Compensation pursuant to the provisions of section 49[1][c] of the Employment Act, two months’ gross salary, KShs. 282,368.
III. A refund of KShs. 53,036.50.
IV. Costs of the suit.
V. Interest at court rates on the sum awarded in [b] above from the date of this judgment till full payment.
VI. Interest at court rates on the sum awarded in [c] above from the date of deduction, till full payment.
Read, signed and delivered this 27th Day of November 2025.
'
Introduction
1. Contending that at all material times he was an employee of the Respondent, whose employment was unfairly terminated, the Claimant sued the Respondent through the Memorandum of Claim herein, dated 15th July, 2019, seeking;
a) An order that the Respondent reinstates the Claimant to its employ, and in the alternative;
b) Twelve (12) months'' salary in compensation for unfair termination at Kshs. 141,184/=per month;
c) Service pay at the rate of one month''s salary for each of the four (4) years completed in service;
d) Kshs. 53,036.50/=unlawfully deducted from final dues;
e) The withheld salary from 30th May,2018 to 8th April, 2019;
f) Issuance of Certificate of Service;
g) Cost of this suit.
h) Interest on (b), (c), (d), and (e) from the date of filing the claim till full payment.
2. The Respondent opposed the Claimant’s claim via the Statement of Response dated 26th August 2019. While acknowledging that the Claimant was their employee, the Respondent contends that he was lawfully summarily dismissed for gross misconduct.
Claimant’s case
3. The Claimant stated that he was hired by the Respondent on 16th February 2015 as an Assistant Bank Officer I following a successful interview. He was initially employed on probation and was confirmed in his position on 13th November 2015. His starting salary was KShs. 72,226.50.
4. After completing one year of service with the Respondent, he applied for and was granted a house loan amounting to KShs. 3,612,000. Furthermore, on 24th August 2016, his salary was increased to a gross total of KShs. 136.960.
5. During his employment, Imperial Bank Limited (IBL) was placed under receivership, and Kenya Deposit Insurance Corporation (KDIC) was appointed to manage and control it on October 13th, 2025. Due to KDIC''s insufficient staff, the Respondent seconded some of its personnel to assist. The Claimant was among those seconded.
6. He initially served at the Kizingo and Watamu branches before being ultimately transferred to the Lokoni branch, where he assumed the role of Receiver Manager. His responsibilities encompassed supervising daily banking operations. He was authorised to incur expenses below KShs. 10,000 without prior approval.
7. He stated that between July 2017 and February 2018, he authorised a Ramtons coffee maker, an HP printer, and a Samsung television to be taken out for repairs, with proper exit passes and entries in the Occurrence Book, and delivered them to Almasi Electronics. The items were recorded in the occurrence book of Wells Fargo Security firm, which was managing the security at the branch.
8. On April 26, 2018, he was reinstated to the Respondent''s employment. Before leaving the Likoni branch, he prepared a detailed handover memorandum listing all branch assets, including those outside the branch. The memorandum was duly signed, witnessed, and acknowledged by the new Receiver Manager.
9. On or around April 26, 2018, he commenced his annual leave. Upon his return, he was served with a letter dated May 22, 2018, alleging gross misconduct for the removal of a television, a colour printer, and a coffee maker from the Bank. He submitted his response to these allegations on 23rd May 2018.
10. On 30th May 2018, he was suspended from duty and placed on half pay. He was asked to show cause why disciplinary action should not be taken against him. On 6th June, 2018, he responded to the show-cause letter.
11. He further stated that on 5th July 2018, the Respondent notified him of a hearing scheduled for 13th July 2018. He attended the hearing. During the proceedings, the Respondent examined witnesses whose statements had not been supplied to him. Additionally, the witnesses testified in his absence, thereby denying him the opportunity to cross-examine them.
12. He stated that on 9th August 2018, the Respondent notified him of a further hearing scheduled for 21st August 2018, but through another notice dated 20th August 2018, the hearing was postponed to 24th August 2018. The letters required him to supply the names of his preferred representative in advance, which he did. Surprisingly, his representative was not allowed to speak on his behalf or at all.
13. On 3rd October 2018, he was summarily dismissed. The dismissal letter listed several reasons, including removing items contrary to regulations governing the movement of assets, although such regulations did not exist in reality.
14. He appealed against the dismissal to the Respondent’s Disciplinary and Grievance [ D&G] Committee, Tier, on 11th October,2018 and requested proceedings to enable him to prepare for the appeal. On 15th October, 2018, the Respondent confirmed receipt of the appellant''s appeal and promised to get back to him regarding the request.
15. In preparation for his appeal, he contacted one of the employees of Almasi Electronics, Leonard Mumba, since the proprietor, Bakari Hashim Swaleh, had been threatened by the Respondent’s agents and was unwilling to testify in support of his defence.
16. Eventually, on 4th February 2019, he attended the hearing of his appeal. However, when he sought to introduce the affidavit of Leonard Mumba Jimbi, the Committee flatly refused, even though it was new evidence not considered at the disciplinary hearing and could have affected the outcome of the appeal. He was not allowed to argue his appeal. The appeal was dismissed, and this was communicated in a letter dated 8th April, 2019.
17. On 6th May, 2019, he was acquitted in a related criminal case under section 210 of the Criminal Procedure Code.
18. He stated that by its letter dated 31st May 2019, titled ''Statement of Final Dues.'' Despite having cleared his house loan, the Respondent unlawfully deducted KShs. 53,036.50.
19. The Claimant’s witness, Leonard Mumba Jimbi, stated that he was a former employee of Almasi Electronics in Kongowea, where he worked for four years alongside the proprietor, Bakari Swaleh Hashim, and another colleague. Their business mainly involved repairing electrical and electronic gadgets.
20. He confirmed that in 2017, he personally saw the Claimant bring a Ramtons coffee maker and a coloured HP printer for repairs at their shop. Upon testing, the printer''s heater was faulty, and the coffee maker''s power cord was worn out. The items were logged and job cards issued according to their usual process, but no repairs were performed because no payment was received.
21. He further recalled that in early 2018, the Claimant also brought in a 40-inch Samsung television for diagnosis, which powered on but showed no images, likely due to a faulty circuit board. Once again, no repairs were carried out due to non-payment. When demolition threatened their business premises, the proprietor called the Claimant to collect his items, which he did.
22. During his cross-examination, the Claimant testified that he committed himself to adhere to the terms and conditions of employment, including the obligation to perform his duties with high standards of professionalism and integrity.
23. The Claimant further testified that, although under the contract the Respondent had the discretion to transfer him between stations, it did not have the authority to unilaterally alter his job description from a Security Officer to a Bank Manager. Under the employment contract, his title was “Assistant Bank Officer.”
24. Under Clause 7 of the contract, his job description was to be provided to him by the Head of Department. He reported to the Head of the Security Department, who assigned him duties from time to time. He did not at any time raise any objection concerning duties allocated to him.
25. He testified that during his period of employment, he did not engage with the Respondent’s Staff Regulations [Revised] July 1996, which were repealed in 2014, before he joined the Bank.
26. Mr Mahmoud Mohammed, the CEO of KDIC, was his immediate supervisor, not the Imperial Bank Branch Manager, Kisingo, Mr Mumba, who was his contemporary.
27. In discharging his duties, he was required to ensure value for money and to comply with procurement procedures. He did not seek bids for the repair of the items in question, as someone [Almasi Electronic shop] had been repairing them for the Bank. There are documents on record to show this.
28. Mr Mumba and Mr Mwandoro signed the handover memo. On the back side, the items in question were listed. They were listed because, at that time, they were not in the bank, and he was the one who authorised their removal from the bank. He had to write them down and sign as a sign of taking responsibility.
29. Cross-examined further, the witness testified that in his witness statement, he stated that he removed the three items from the bank and took them for repair at different times. However, the job card by Almasi lists all of them.
30. He further testified that he wrote the letter dated 23rd May 2018 under pressure from the police while in police cells. He wrote the same at their dictation. In the letter, he stated that the repairers dropped the items at his house.
31. It is further evidence that his witness, Mr Jimbi, states in his witness statement that the items were never repaired because the repairs were not paid for. This contradicts his witness statement, which states that the items were repaired.
32. He was suspended on 30th May 2018, via the letter dated the same day. The letter mentioned the three items included. He responded to the suspension letter on 6th June 2028. In his reply, he did not state that the information collected from his house was incorrect.
33. There was a recommendation for his suspension. This was communicated via a memo from the Acting Human Resource Manager addressed to the Governor. The memo received the Governor''s approval on 29th May 2018.
34. The Respondent’s Human Resources Manual provided for the disciplinary procedure for misconduct and investigations. It provided the right to accompaniment during a disciplinary hearing. The Manual also provided for sanctions for misconduct and gross misconduct.
35. He testified that he was heard by the Tier 1[DNG] Committee on 13th July 2018 and 24th August 2018, and a decision was made on 3rd October 2018. He was informed of the right to appeal. On 11th October 2018, he exercised his right of appeal. He was heard on the appeal. Subsequently, the appeal was dismissed.
36. The Respondent calculated his terminal dues at KShs. 347.30, less liabilities, and paid him KShs. 149,905.30. At the time of the calculation, he had already duly settled his outstanding loan in cash.
37. His demand letter did not mention the improperly deducted sum, as at that time, the Respondent had not computed the figures and paid him his dues.
38. The High Court overturned his acquittal by the Magistrate in the criminal case. Since then, he has not been re-acquitted by the Magistrate’s court.
39. The Claimant presented a witness, Mr. Leornard M. Jimbi, to testify in support of his case. He stated that he is an Electrician by profession. Mr Bakari and Mr Katana were his fellow Electricians.
40. The witness recalled that at one point, the Claimant took the three items—a Ramtons Coffee Maker, a coloured HP printer, and a Samsung 40-inch television—to be repaired. They were not in working condition.
41. The witness stated that he was summoned to appear before the Disciplinary Panel to give evidence, but the Bank refused to take his testimony because he was a stranger to them. They could not hear anybody from outside the Bank. It was the bank that had called him to testify.
42. He later came to know that the Respondent terminated the Claimant’s employment because of the items.
43. He [the witness] had testified in the criminal case against the Claimant. The Claimant was later acquitted.
44. Cross-examined by the Respondent''s Counsel, the witness stated that he had been employed by Almasi Electronics since 2014. He specialised in handling electronic items. Upon receiving items into the shop, they would first perform a diagnosis on them and then raise a job card.
45. After raising the job card, they would provide a quotation. If the customer paid, they could then proceed with the repair works. If not, the items would be kept until the outstanding payments were settled. The quotation was either verbal or in writing. In this case, there was no written quotation.
46. Imperial Bank was their customer. They had previously repaired items for them. Usually, they settled the charges in cash. The claimant also had previously engaged them to repair his items and others belonging to the Bank.
47. He did not open the Television to know what its problem was or give a quotation for its repair.
48. The shop owner contacted the Claimant to collect his items. He did so, but the witness was unaware of where he had taken them.
49. It was the Claimant who called him to testify before the Disciplinary Panel, but the Bank failed to receive his evidence, dismissing him as a stranger. He could not remember the exact date when the Claimant asked him to do so. Too, he could not remember the date when he travelled to Nairobi to testify.
Respondent’s case
50. 50. The Respondent’s witness, Anne Muoki [RW1], stated that at the material time she was employed by the Respondent Bank but was seconded to Imperial Bank as an Assistant Receiver Manager, which was under receivership. In that role, she was responsible for establishing payment stations for Imperial Bank’s depositors.
51. She was posted to Mombasa to establish payment stations for depositors in the Coast region, and she found the Claimant and another officer already seconded there to assist with receivership duties. She fully briefed the Claimant on his expected roles and responsibilities at the IBL branches, including the Likoni Branch.
52. She further stated that during her tenure as Assistant Receiver Manager, no items were moved from IBL branches for repairs. According to her, an internal maintenance person handled faults, and in cases of major repairs, external technicians would only be engaged after quotations were provided and approval from the Receiver Manager in Nairobi was obtained.
53. She also stated that all payments for repairs were processed and paid from Nairobi upon approval. She concluded that, based on this, the Claimant’s claim lacked merit.
54. Cross-examined by the Claimant''s Counsel, the witness stated that the Claimant held a Bank Office position at the Respondent’s. The role was of a low cadre. At the Bank where he was assisting in the receivership process, he was recorded as a representative. In terms of administration, he was equivalent to a Branch Manager. The role he played at Imperial Bank was not the same as the one he played at the Central Bank of Kenya.
55. The Claimant was reporting to her as she was in charge of all the coastal branches of Imperial Bank [in receivership]. Before her arrival in Mombasa, the Claimant was supposed to report to the Receiver Manager [Mahamoud Mohammed].
56. When she was recalled to Nairobi, she handed over to Mr Fredrick Mumba, the Operations and Administrative Supervisor of Imperial Bank Branches in the Coastal Region.
57. The termination of the Claimant’s employment at CBK was due to an alleged theft of some items at the Likoni Branch. Contracted security firms were guarding the branches. They checked people leaving the branch to ensure they did not carry the bank’s property. Anything belonging to the bank was recorded.
58. The Respondent’s witness, Elizaphan Karianjahi [RW2], stated that he was instructed to investigate a report of property loss at Imperial Bank (IR), Likoni Branch. He travelled to Mombasa and interviewed staff members at the branch. From these interviews, he was informed by a Wells Fargo security guard, Mr Maloba, that the Claimant had taken an AVR and a coffee maker to his house for personal use. He also said that he was told that on 11th September 2017, the Claimant removed a colour printer from the office to his house, and this removal was recorded in the Occurrence Book.
59. He further stated that he received information that on 6th February 2018, the Claimant instructed a cleaner to demount a Samsung 54-inch TV and take it to his car, and that the Claimant confirmed he was taking it for his own use. He later recovered items from the Claimant’s house.
60. He also stated that he contacted the alleged fundi whose number had been provided by the Claimant, but the person declined to cooperate. He added that the signal indicated the fundi was in Mtwapa. He stated that the three items were tested and found to be in good working condition, with no signs of tampering on the television.
61. Cross-examined by Counsel for the Claimant, the witness testified that when Imperial Bank was placed under receivership, the Respondent seconded its employee, including the claimant, to Imperial Bank to assist in managing the bank''s affairs.
62. The Claimant was dismissed because he took items from Imperial Bank, which he was supposed to safeguard, for his own use.
63. He was issued a show-cause letter. The Bank also asked him to write an apology letter for the infraction committed. After apologising, he was suspended.
64. He suspected the items had been stolen. All the items were tested and found to be intact. They had not been tampered with at all. They were tested in the absence of the Claimant.
65. He further testified that she was a witness at the disciplinary hearing, acting as an investigator. When she testified before the Disciplinary Panel, the Claimant was not present. According to the Bank Rules, he didn''t need to attend. Therefore, the Claimant did not have an opportunity to cross-examine her.
66. Respondent’s Witness Elizabeth Wanjiru [RW 3] confirmed that the Claimant was appointed on probation in February 2015 and was confirmed in November 2015. His salary was adjusted in August 2016, and he was seconded to Imperial Bank Limited under receivership until 26th April 2018.
67. She stated that during the Claimant’s tenure at Likoni Branch, he unlawfully removed a 54-inch Samsung TV, a colour printer, and a coffee maker under the pretext of taking them for repairs, but instead transported them to his residence for personal use. She affirmed that the items were subsequently recovered from his residence in May 2018.
68. The conduct of the Claimant was contrary to the Respondent’s Staff Rules and Regulations [Revised] July 1996, which in Rule 3.1 require absolute integrity and honesty in the performance of duties.
69. She further explained that the Claimant received a show cause letter, responded to it, and was suspended on half pay with the Governor’s approval. She verified that investigations confirmed the items were removed without authorisation.
70. The matter was referred to the Disciplinary and Grievance Committee, which recommended summary dismissal. The Claimant appeared before the Disciplinary Committee on 13th July 2018 and 21st August 2018, evaluated the evidence presented to it, and found that he had, without authority, removed the three items from Imperial Bank Limited [IR], Likoni Branch. The conduct amounted to gross misconduct. In exercise of its powers under Clause 14.1.3 [v] of the Respondent’s Disciplinary Policy, the Disciplinary & Grievance Tier 1 Committee recommended to the Governor that the Claimant be summarily dismissed.
71. She stated that the Governor adopted the recommendation, and the Claimant was dismissed on 3rd October 2018. She also stated that the Claimant appealed, the appeal was heard and rejected, and final dues were calculated and communicated to the Claimant.
72. She further stated that the Claimant had been charged in a criminal case and subsequently acquitted; however, the Respondent asserted that the acquittal did not absolve him from disciplinary liability.
73. In her evidence during cross-examination, the witness testified that she was not sure whether or not the revised edition of the Respondent’s Human Resource Guidelines, 2014, ousted the applicability of the 1996 version.
74. The Human Resources Policy and Guidelines specify the right of appeal [under clause 7. A] and the admission of new evidence. The affidavit of Mr Jimbi was not considered new evidence. In the initial hearing, the Committee refused his proposal that he calls the deponent of the affidavit.
75. In his appeal letter, he requested the proceedings and decision of the Disciplinary Committee. The Respondent did not supply him with them.
76. She admitted that, though she mentioned an Asset Movement Register in her witness statement, the document has not been presented in evidence in this matter.
77. Clause 14.1.4 of the Guidelines outlines the fundamental principles of the disciplinary process, including due process and the rules of natural justice. She further testified that witnesses testified for the employer [Respondent] in the absence of the Claimant. He did not have a chance to cross-examine them.
78. The policy provides for the composition of the Appeals Committee. Its membership shall exclude members of the Discipline and Grievance Committee that handled the disciplinary/grievance matter, except the Director of Human Resources. During the disciplinary hearing of 13th July 2018, one Kennedy Abuga was a member. He was also a member of the Appeals Committee on 4th February 2019.
79. During the hearing, the representative, an employee of the Bank, stated that members of staff, Mombasa branch, were unwilling to testify for the Claimant’s case, as they feared they would be prejudiced in their employment.
Analysis and Determination
80. I have carefully considered the pleadings by the parties, their evidence, and the overly lengthy submissions by their respective Advocates, and the following issues emerge for determination;
I. Whether the summary dismissal against the Claimant was fair.
II. Whether the Claimant is entitled to the reliefs sought.
Whether the summary dismissal against the Claimant was fair.
81. Section 45[1] of the Employment Act prohibits unfair termination of an employee’s employment, and under subsection 2 highlights what would constitute unfair termination. Unfair termination arises where it is without is without procedural fairness and substantive justification [ with reason[s] that is valid and fair]. It bears repeating that absence of any or both of these two components would render the termination unfair.
82. In the case of Naima Khamis v Oxford University Press E. A Limited [2017] eKLR, cited in Pandya t/a Ziwa Resort and Bamburi Beach Resort v Katana [2024] KEERC 1826 [KLR], cited by Counsel for the Respondent, the Court of Appeal, elaborating on this, stated;
“…………..we wish to take note of the provisions of section 43[1] of the Employment Act, which provides that in any claim arising out of termination of a contract, the employer is required to justify the reason or reasons for the termination, and where the employer fails to do so, the termination is deemed to have been unfair,
Also, Section 45[2] requires a termination to be done according to a fair procedure. From the foregoing, termination of employment may be substantively and/or procedurally unfair.
A termination is also deemed substantively unfair where the employer fails to give valid reasons to support the termination. On the other hand, procedural unfairness arises where the employer fails to follow the laid down procedure as per contract, or fails to accord an employee an opportunity to be heard as by law required.’’
83. Section 41 of the Employment Act,2007, prescribes procedures to ensure procedural fairness in the termination of employment or in cases of summary dismissal. This provision outlines a mandatory process that any employer must follow when considering terminating or summarily dismissing an employee.
84. However, it is pertinent to note that, in assessing whether such termination or summary dismissal was procedurally fair, the requirements of Section 41 should be evaluated in conjunction with other relevant statutory provisions, including those under the Fair Administrative Action Act; constitutional provisions, such as the right to fair administrative action under Article 47, the right to fair labour practices under Article 41, and the right to a fair hearing under Article 50; as well as principles of natural justice and the employer’s Human Resources Policies and Procedures Manual.
85. Recently, in the case of Judicial Service Commission & 2 others v LMN [2025] KESC 53[ KLR], reflecting the changed landscape in disciplinary processes against employees, the court authoritatively declared;
“1. We begin this judgment by declaring that the fairness of any disciplinary process is today a constitutional imperative, irrespective of status of the officer, involved. The process must uphold all the tenets of fair administrative action under Article 47 and the right to fair hearing under Article 50 of the Constitution. In addition to these constitutional safeguards, by the provisions of the Judicial Service Act [JSA], Cap 8A, and the Fair Administrative Action Act, Cap 71, the disciplinary bodies, including the Judicial Service Commission [JSC], are bound to ensure that the disciplinary action against a Judge, judicial officer and staff must strictly comply with both constitutional and statutory requirements.”
86. A careful examination of the submissions submitted by both Counsel for the parties reveals a common aspect: they have both approached the matter from a limited perspective of procedural fairness, heavily relying on Section 41 of the Employment Act, 2007, to the exclusion of other pertinent and essential statutory and constitutional provisions.
87. The Claimant asserted that during the disciplinary hearing, certain witnesses for the Respondent testified in his absence, thereby depriving him of the opportunity to cross-examine them. The Respondent’s witnesses, notably RW2 and RW3, acknowledged that they provided their testimony before the Disciplinary Committee in the absence of the Claimant, thus preventing him from cross-examining them. Inexplicably, the Respondent did not give a reason for this approach; it gave the disciplinary process, which, in my view, glaringly affronted the Claimant’s right to a fair hearing under Article 50 of the Constitution of Kenya, 2010, and the tenets of natural justice.
88. Counsel for the Respondent submitted that, yes, the witnesses gave their testimony without the Claimant cross-examining them. However, this is not a reason to set aside the Disciplinary process, as this was not a trial where an employee is entitled to cross-examine the witnesses interviewed by the D&G. To support this submission, Counsel placed reliance on the case of Kavuma Dianah v National Social Security Fund, Labour Dispute Number 171 of 2021, where the Industrial Court at Kampala stated;
“However, we are mindful that the failure of a witness to turn up for cross examination would not be a standalone reason to declare disciplinary proceedings unlawful or unfair. This is because the standard disciplinary proceeding is not that of a mini-court, as observed by Barishak J. A with Owiny Dallo DCJ [as he then was]and Obura JA, concurring, in the oft-cited case DFCU Bank Limited v Donna Kamuli. In that case, the court notes that all that is required of an employer is to present the allegations to the employee and ensure a right to a hearing. The right to cross-examine is but one of the various rights at the disciplinary hearing, and it would not be a sole reason to declare the disciplinary hearing unlawful or unfair, thereby rendering a dismissal unlawful. In the present case, the Claimant did not ask to cross-examine any witness and the opportunity was refused. We do not agree that the Claimant was not given a fair hearing and decline to make such a declaration.”
89. I am not persuaded by the Counsel’s submissions on this point or the persuasive authority he has cited to support them. The reasoning and decision, in my opinion, do not align with a constitutionally driven labour relations framework like ours, where constitutional rights are incorporated into employment and labour statutes and embedded in employment contracts. Furthermore, the principles of natural justice form the fundamental basis in disciplinary proceedings, as explicitly acknowledged by the Respondent’s Human Resources Policies and Guidelines. In my view, the absence of any element of a fair hearing, which is a part of procedural fairness, can render a termination unfair or wrongful.
90. In the case of Eric Kamande v Judicial Service Commission [ 2025] KESC 48[KLR], the Supreme Court of Kenya held;
“65……………… How was he to defend himself? The audi alteram partem rule, as a basic but fundamental principle of natural justice and fair play, dictates that no one should have their rights negatively impacted without a fair hearing. Conversely, a person accused of a transgression is entitled to cross-examine the accuser under oath in order to test the veracity of the complaints.”
66. The right to a fair hearing is firmly rooted in Article 50[1] of the Constitution…………….”
91. In my opinion, it was the Respondent''s duty to guarantee a fair hearing with all its elements present. It is irrelevant that the Claimant did not raise concerns about witnesses giving evidence in his absence or request their recall for cross-examination.
92. Section 45[5] of the Employment Act provides,
“In deciding whether it was just and equitable for an employer to terminate the employment of an employee, for purposes of this section, a labour officer or the Industrial Court shall consider;
a) The procedure adopted by the employer in reaching the decision to dismiss the employee and the handling of the appeal against the decision. [Emphasis mine].”
93. Undoubtedly, the Claimant requested in writing the proceedings and decision of the Disciplinary Committee to prepare for his appeal hearing against his dismissal. However, he was not provided with them. RW3 confirmed this fact during her cross-examination. The Appeal panel proceeded to hear the appeal regardless and dismissed it. I find no difficulty in concluding that the Respondent’s decision on the Claimant’s appeal was lacking in justice and equity. It is important to emphasise at this stage that propriety should be maintained throughout disciplinary proceedings, including in the manner of issuing a termination letter and handling an appeal against the decision to dismiss.
94. The presumption that an employee is not entitled to call a witness from outside the enterprise to testify in support of their defence against the charges against them persists, despite the altered legal landscape described hereinabove. Confronted with this pervasive assumption, in my opinion, the Respondent did not permit Mr Jimbi, the electrician, to testify as the Claimant’s witness.
95. In my assessment, considering the stance taken by the investigating officer, who evidently did not interview anyone from Alamasi Electronics Shop, and the impressions formed from the documents, such as the Job Card, the witness whom the Claimant sought to call was a vital witness whom the Respondent should have allowed to testify. Refusing to permit him affected the Claimant’s right to a fair hearing, so the Respondent was obliged to provide reasons for the rejection under Article 47 of the Constitution. From the minutes of the Disciplinary hearing, I note that no reasons are recorded.
96. By reason of the foregoing premises, I find that the summary dismissal against the Claimant was procedurally unfair.
97. I now turn to consider the substantive justification aspect of the summary dismissal against the Claimant.
98. In a dispute over the termination of an employee’s employment, section 43 of the Employment Act requires the employer to prove the reasons for termination. If the employer fails to do so, the termination shall be deemed unfair under section 45 of the Act.
99. To discharge this burden, the Respondent, in their pleadings and through their witnesses’ evidence, stated that the Claimant was dismissed for removing electrical items belonging to Imperial Bank Limited [then under receivership] from its Likoni Branch without authorisation. The items were traced to his residence, leading the Respondent to take the position that he had removed them in the manner he did for his own use. The Claimant consistently admitted the removal but contended that it was because he took them for repair. I am of the view that the Respondent discharged their burden under the said provision.
100. However, the obligations imposed upon the employer extend beyond Section 43 of the Act. Additional legal obligations are also mandated by other provisions contained within the Act. Closely related to the legal burden under Section 43 is the requirement under Section 45[2][b] to demonstrate that the reason was fair and valid.
101. Section 44[4] of the Act provides for actions and inactions by an employee that may amount to gross misconduct, thereby justifying their summary dismissal. However, it is imperative to state that the list is not exhaustive.
102. Critically examining the provisions of section 44[3] of the Act, it cannot be safely claimed that it is not sufficient for an employer to simply state that the employee has committed one or more of the acts or omissions listed in section 44[4] of the Act or in its Human Resources Manual. An employee’s misconduct does not automatically justify summary dismissal unless it is ‘so grave’ that it indicates the employee’s abandonment of the intention to remain employed. In the oft-cited case of Laws v Landon Chronicles Limited [1959] 2 ALL.E. R, the court held;
“Since a contract of service is but an example of contracts in general, so as the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.’’
103. Whether the employee’s misconduct attracts dismissal requires an assessment of the degree and the surrounding circumstances, the contextual approach. In McKinley v BC Tel 2001 SCC 38[2001]2SCR 161, the Supreme Court of Canada held, and I agree:
“29. When examining whether an employee’s misconduct justifies his or her dismissal, courts have considered the context of the alleged insubordination. Within this analysis, a finding of misconduct does not, by itself, give rise to a just cause. Rather, the question to be addressed is whether, in the circumstances, the behaviour was such that the employment relationship could no longer viably subsist.
39. To summarise, the first line of case law establishes that the question whether dishonesty provided just cause for summary dismissal is a matter to be decided by the trier of fact, and to be addressed through an analysis of the particular circumstances surrounding an employee’s behaviour. In this respect, courts have held that factors such as the degree of misconduct and whether it violated the “essential conditions” of the employment contract or breached an employer’s faith in an employee must be considered in drawing a factual conclusion as to the existence of just cause.”
104. I have really agonised over this—the length of time the electrical items remained at the Claimant’s house, which, in my view, he did not put much effort into explaining, and which did not receive sufficient explanation, as well as the contradictions in his evidence and that of his witness regarding whether the items were repaired or not. In my view, in the circumstances, any reasonable employer would, as the Respondent did, conclude that the Claimant removed the items from the Bank to his house for his own use.
105. The Claimant contended that the sanction was unfair. That it was contrary to the spirit of the Respondent’s Human Resources Policies and Guidelines, as it was not corrective but oppressively punitive. I have carefully considered the circumstances of the matter, including the role that the Claimant was assigned to undertake at Imperial Bank during the material time, the industry in which he was working, his act fell short of the vital virtue of integrity and professionalism, and that the act in issue would reasonably be construed as an act of dishonesty and misappropriation, and conclude that it was a grave act, which would grossly dent any reasonable employer’s faith in the Claimant. The summary dismissal was on a valid and fair ground.
Whether the Claimant is entitled to the reliefs sought.
106. Section 49 of the Employment Act bestows upon this Court the power to make a compensatory award to an employee who has successfully challenged their employer’s decision to terminate their employment or summarily dismiss them, as unfair. However, it is imperative to point out that the power is discretionary and, as such, exercised depending on the circumstances of each case. I have carefully considered the fact that the Respondent is bearing liability in this case simply because of procedural unfairness, the fact that the Claimant contributed to the dismissal, and the length of his service, and conclude that he is entitled to two months’ gross salary, KShs. 282, 368.
107. The Claimant claimed that KShs. 53,036.50 was improperly deducted from his final dues, allegedly for offsetting an outstanding facility amount. He asserted that he had cleared the loan by paying cash. I have carefully considered the evidence by the Respondent’s witnesses and conclude that none of it rebuts the claimant’s assertion. He is hereby awarded the sum.
108. In the upshot, judgment is hereby entered in favour of the Claimant in the following terms;
I. A declaration that the summary dismissal against him was substantively fair, but procedurally unfair.
II. Compensation pursuant to the provisions of section 49[1][c] of the Employment Act, two months’ gross salary, KShs. 282,368.
III. A refund of KShs. 53,036.50.
IV. Costs of the suit.
V. Interest at court rates on the sum awarded in [b] above from the date of this judgment till full payment.
VI. Interest at court rates on the sum awarded in [c] above from the date of deduction, till full payment.
Read, signed and delivered this 27th Day of November 2025.
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