Court upholds unfair dismissal ruling against Consolidated Bank, orders higher payout to ex-employee

Court upholds unfair dismissal ruling against Consolidated Bank, orders higher payout to ex-employee
Court upholds unfair dismissal ruling against Consolidated Bank, orders higher payout to ex-employee - The Court of Appeal has dismissed an appeal by Consolidated Bank of Kenya, upholding a finding that it unfairly dismissed former credit officer Eustace Muchigiri Njuguna over alleged irregular fund transfers. (Photo: File)
The Court of Appeal has dismissed an appeal by Consolidated Bank of Kenya, upholding a finding that it unfairly dismissed former credit officer Eustace Muchigiri Njuguna over alleged irregular fund transfers. (Photo: File)

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The appellate judges, however, partly allowed Njuguna's cross-appeal by increasing his notice pay from one month's salary to three months' salary, amounting to Sh349,511.

The Court of Appeal has dismissed an appeal by Consolidated Bank of Kenya, upholding a finding that it unfairly dismissed former credit officer Eustace Muchigiri Njuguna over alleged irregular fund transfers, while increasing the amount payable to him in lieu of notice.
In a judgment delivered by Justices Kinoti M'Inoti, Chacha Mwita and Byram Ongaya, the judges rejected the bank's attempt to overturn an Employment and Labour Relations Court (ELRC) decision that declared Njuguna's dismissal unfair.
The appellate judges, however, partly allowed Njuguna's cross-appeal by increasing his notice pay from one month's salary to three months' salary, amounting to Sh349,511.

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Njuguna had sued the bank after he was summarily dismissed on June 20, 2014, for allegedly authorising irregular transfers from the USD accounts of Masafi Fruits & Vegetables Limited to other accounts, exposing the bank to financial loss.
He argued that the disciplinary process was flawed because the committee that heard his case was conflicted and that his dismissal letter was unlawfully signed by the Head of Human Resources instead of the Chief Executive Officer, contrary to the bank's Human Resource Policies and Procedures Manual.
The ELRC had ruled that the dismissal was unfair and awarded him six months' salary as compensation, together with one month's salary in lieu of notice. Dissatisfied, the bank appealed, insisting that it had followed the Employment Act and its internal disciplinary procedures.

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The Court of Appeal upheld the finding of unfair dismissal, declining to interfere with the compensation awarded by the trial court.
"In the absence of submissions to show that the trial court had misdirected itself, acted on wrong principles, considered irrelevant matters, or arrived at a decision that resulted in an injustice, we will not disturb but will uphold the award of six months' compensation for the unfair dismissal," the judges ruled.
However, the court agreed with Njuguna that his employment contract entitled him to three months' notice or payment in lieu of notice where summary dismissal was found to be unjustified.
"The trial court erred by awarding one month's pay in lieu of notice... Accordingly, we substitute it with an award of three months, making Sh349,511," the judges said.
The court declined Njuguna's request for reinstatement, noting that the Employment and Labour Relations Court Act bars reinstatement after three years from the date of dismissal. Since he had been dismissed in 2014 and judgment was delivered nearly six years later, the remedy was no longer available.
The Court of Appeal dismissed the bank's appeal, partially allowed the cross-appeal, and ordered Consolidated Bank to pay the costs of both the appeal and the cross-appeal.

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