Absa Bank Kenya ordered to pay a former employee Sh5M for privacy violations

The Employment and Labour Relations Court has ordered Absa Bank Kenya to pay Sh5 million in damages to its former employee, Thomas Mwangi.

The court found that the bank had violated Mr. Mwangi’s constitutional right to privacy during its investigation into his conduct while he was on suspension.

Justice Monica Mbaru on October 1, emphasised the importance of protecting employee privacy, even in the context of an employment relationship.

“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,” Justice Mbaru stated.

Mr. Mwangi, who served as a senior branch manager at the bank’s Nkrumah Road branch in Mombasa, had his privacy breached when Absa Bank-Kenya hired a private investigator to monitor his activities.

The investigator allegedly followed Mr. Mwangi to public places, including restaurants and pubs, and demanded information from different establishments about his personal conduct. The court found these actions to be in violation of Mr. Mwangi's rights.

“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,” the judge ruled.

In addition to the Sh5 million compensation for the breach of privacy, the court ordered the bank to pay Mr. Mwangi Sh2.3 million in unpaid bonuses for the year 2022. In addition, the court awarded him Sh647,218 in notice pay and Sh373,294 in unpaid salary increments, calculated at 13%, for the period from January to May of the previous year.

The court noted that the bank’s delay in addressing workplace misconduct should not have denied Mr. Mwangi his due benefits while he was still employed.

“Disciplinary procedures were only initiated against the claimant through the notice to show cause dated March 17, 2023—thus, going back to sanction and denying him a benefit accrued backward relating to his performance in 2022 was to engage in unfair labour practices,” Justice Mbaru ruled.

The judge also rejected the bank’s argument that salary increases were discretionary, stating that the records and policies presented in court did not support this claim.

The court upheld the privacy violation claim and found Absa Bank-Kenya justified in terminating Mr. Mwangi's employment. Justice Mbaru ruled that Mr. Mwangi was dismissed due to misconduct, specifically engaging in irregular and unauthorised overdraft facilities for customers under his leadership at the Nkrumah Road branch. The court deemed this a breach of bank policies and procedures.

The judge observed that although Mr. Mwangi had a chance to explain his behaviour, his answers fell short.

“Mr. Mwangi admitted to buying a housing unit from a customer without a proper sale agreement, which was in conflict of interest,” the judge said. She added that he also failed to address irregularities related to the allocation of excesses within his branch, which breached the bank’s lending procedures.

The court determined that Mr. Mwangi’s termination followed due process and therefore did not warrant any further compensation beyond what had already been awarded for the privacy breach.

“In this case, termination of employment was justified, and the claimant was taken through due process,” Justice Mbaru stated.

Justice Mbaru further emphasised that Mr. Mwangi could not evade responsibility for his actions as a branch manager.

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

She explained that as a branch manager, Mr. Mwangi’s role was similar to that of a financial custodian. His failure to uphold the bank’s policies and fiduciary duties exposed the bank to potential risks and liabilities. The judge highlighted the sensitivity of the banking sector, stating that breaches of fiduciary duty could have far-reaching consequences beyond the immediate parties involved.

“The banking sector is sensitive and highly regulated through its policies and the Central Bank of Kenya; thus, breach of fiduciary duty extends to third parties, and the conduct of the claimant justified the sanction taken and termination of employment,” she explained.

Justice Mbaru also noted that any conflict of interest or lapse in fiduciary duty could affect the financial stability of the bank and potentially facilitate fraudulent transactions.

“The bank is finance-sensitive, and the position held by the claimant as a branch manager is similar to that of a financial custodian and other valuables,” she said.