Edwin Beiti Kipchumba v National Bank of Kenya Limited [2018] KEELRC 2393 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT & LABOUR

RELATIONS COURT AT MOMBASA

CAUSE NUMBER 824 OF 2016

BETWEEN

EDWIN BEITI KIPCHUMBA ……………………… CLAIMANT

VERSUS

NATIONAL BANK OF KENYA LIMITED…………… RESPONDENT

Rika J

Court Assistant: Benjamin Kombe

Wandai Matheka & Company Advocates for the Claimant

Munyao Muthama & Kashindi Advocates for the Respondent

__________________________________________________

JUDGMENT

1. The Claimant filed his Statement of Claim on 17th October 2016. He was employed by the Respondent Bank, as an Associate Relationship Manager. He worked from 6th August 2012, up to 5th October 2016, when he notified the Respondent he wished to resign, effective 30 days after 5th October 2016.

2. He wrote to the Respondent the following day, after giving notice, on 6th October 2016, rescinding his decision to resign. His salary as of this date was Kshs. 148,400 per month.

3. The dispute arose between the Parties, because on 6th October 2016, the Respondent wrote to the Claimant, accepting his notice of resignation. According to the Respondent, the letter from the Claimant rescinding his notice of resignation was of no effect. The Claimant ceased to be an Employee of the Respondent once his notice was accepted by the Respondent.

4. The Claimant states he did not issue notice of resignation voluntarily. He was pressured by the Top Management of the Respondent to resign, after the Top Management, and the Directors, had been implicated in violation of the Respondent’s Credit Policy. The Top Management, and the Directors, had allowed certain Account-Holders to exceed their credit ceilings. Central Bank of Kenya, through the Banking Fraud Investigation Unit, had asked for information about the relevant Accounts. The Claimant was pressured by his seniors to resign, due to his role in bringing relevant information to the fore, with regard to this fraud.

5. The Claimant prays the Court to find that he was unfairly, constructively and unjustly dismissed by the Respondent. He prays for Judgment against the Respondent in the following terms:-

i. A declaration that the notice of resignation dated 5th October 2016 issued under duress and is therefore voidable.

ii. A declaration that the Claimant is still in the employ of the Respondent, and, in the alternative-

iii. The Respondent is compelled to pay to the Claimant the following benefits:-

a) 12 months’ salary on account of constructive dismissal which is unfair termination and/or unfair labour practice.

b) Leave days accrued.

c) Service pay.

d) General damages for coercion, mistreatment and/or harassment.

e) Any other just and expeditious relief.

iv. Costs and interest

6. The Respondent filed its Statement of Response on 16th November 2016. It is conceded the Claimant was employed by the Respondent Bank. He was first employed as a Clerk on 26th July 2012; he was redeployed to Nkrumah Branch within Mombasa, as Personal Banking Consultant on 15th March 2013; he became permanent staff on 26th March 2013; and was appointed Associate Relationship Manager, Medium Business, on 1st November 2015. He held this position until he voluntarily resigned. An audit commissioned by the Respondent carried out by Audit Firm, Deloitte & Touché, revealed there was misrepresentation of the Bank’s non-performing loans. Investigations suggested the Claimant among other Employees, played a role in this misrepresentation. He was asked to show cause, why disciplinary action should not be taken against him. He responded on 4th December 2016. His explanation was unsatisfactory. The Claimant was subsequently heard by Respondent’s Disciplinary Committee. The Respondent’s Senior Management resolved to have the Claimant dismissed because of his role in concealing non-performing loans. The Claimant however decided to resign. He gave 30-day notice of resignation dated 5th October 2016. The Respondent accepted resignation on 6th October 2016. The Claimant wrote to the Respondent reversing his notice on 6th October 2016, alleging he was coerced into resigning. The Respondent asked the Claimant to provide evidence that he had been coerced to resign. He did not show that he was coerced. The Respondent urges the Court to find that the Claimant resigned voluntarily, and his Claim should therefore be dismissed with costs to the Respondent.

7. Together with the Statement of Claim, the Claimant filed an Application for an order of injunction, restraining the Respondent from interfering with his contract of employment, pending hearing and determination of the Claim. The Court made a Ruling dated 6th February 2017, giving the following main orders: -

a) Pending hearing and determination of the Claim, the Claimant shall continue to earn half his monthly salary, at Kshs. 74,000.

b) Should he fail to establish coercion, all salaries paid to him shall be repaid to the Respondent, from the date of the alleged resignation.

c) He is to remain in employment on these terms, pending hearing and determination of the Claim.

8. The Claimant gave evidence on 28th March 2017, while Head of Employee Services of the Respondent, Linet Khadenje Anyika, gave evidence on the same date, bringing the hearing to a close.

Claimant’s Evidence

9. Kipchumba restated his employment history, and terms and conditions of service, as is commonly pleaded by the Parties.

10. He received a call from Acting Business Director Alice Kairo, on 4th October 2016. She asked the Claimant if he had received a call from the Respondent’s Acting Executive Director, Reuben Koech. The Claimant had not received such a call.

11. Later the Claimant found there were several missed calls from Koech. Koech called the Claimant subsequently. He told the Claimant that Respondent’s Board of Directors was not happy with the Claimant. The Claimant was asked to write a letter of resignation. These were senior people calling the Claimant, from the Respondent’s Head Office in Nairobi.

12. The Claimant was assured he would get a good Certificate of Service. Koech told the Claimant that Koech had good connections, and would secure the Claimant another job. The Claimant was confused. He had a good relationship with the Bank to this point.

13. On 5th October 2016, Koech pressed the Claimant to resign, and never mention anything to do with the Central Bank [CBK], and doctoring of Respondent’s books. Koech asked the Claimant, to say in his resignation letter, that the Claimant was overwhelmed by business banking. He was never to mention the CBK and Deloitte Report to anyone. The Claimant would hang up the phone. Koech would call again, and again, demanding the Claimant writes a resignation letter.

14. The Claimant caved in, wrote and sent his letter of resignation, through e-mail. After this, the Claimant called Koech asking what would follow. Koech did not pick Claimant’s calls.

15. On 6th October 2016, the Claimant was advised his letter was already with the Board. The Claimant wrote another letter, rescinding his letter of resignation.

16. Earlier, on 17th December 2015, the Claimant received e-mail from Head of Medium Enterprise. He was asked to consolidate Juja and TSS Accounts, and do a moratorium. Moratorium could be on the principal or interest amounts. These Bank Clients had exhausted their credit limits. All loans had matured and were in arrears. The Claimant declined to doctor records, giving balances and approved limits. He was surprised later on to receive a copy of Facility Extension/Amendment. It was indicated that the Claimant had signed Facility Extension/ Amendment. The Claimant had not appended his signature to this document. The document was prepared at Nairobi, while the Claimant was at Mombasa.

17. Deloitte found there was malpractice. Juja loan had matured in 2014 and was extended. All Directors, including the Executive Director Munir, were sacked.

18. New Directors came in. Koech was Acting Executive Director. The Claimant was invited for disciplinary hearing at Nairobi. His position was that he only filed the forms for the facilities which went into arrears. Extension of repayment period after loans had matured, and origination, were done at the Head Office. The Claimant could not be held responsible for the malpractices captured in the Deloitte Report. The Bank had credit approval limits. The facility of 2 million USD extended to one of the Clients, required the Board is notified. The Claimant did not engage directly with the Clients.

19. On 26th September 2016, Security Department called the Claimant, informing him CBK Banking Fraud Unit wished to interview the Claimant. The Claimant was interviewed subsequently. Koech called the Claimant after the interview, wanting to know what the Claimant had told the CBK. The Claimant told Koech everything he said to the CBK was documented. It was at this juncture that Koech told the Claimant that the Board was not comfortable with the Claimant. Discomfort was occasioned by the Claimant’s revelation of the entire history of Respondent’s Mombasa Branch, to the CBK.

20. At Claimant’s Bundle of Documents, page 32 the Claimant illustrated some of the malpractices carried out by Respondent’s Top Managers. The page contains a statement of account of Rising Star Commodities Limited. This Company was credited Kshs. 580,690,555 by the Respondent on 31st December 2015. It was debited the same amount, on the same date. The sum was shown as a new loan. This is known as rebooting in banking parlance. It was one of the irregularities detected by CBK. Koech was at the time, Director of Corporate, and this irregular transaction pointed to him. All Accounts were moved to the Remedial Section once irregularities were detected, leaving the Claimant with no work to do.

21. In 2013, he was the best Employee of National Bank. The Claimant loved his work, and would not just wake up in the morning, and decide to resign. He had a mortgage facility to pay over a period of 25 years. He had dependents. How would he just wake up in the morning and decide to resign? The Claimant was surprised to see in Respondent’s bundle of documents, the warning letter alleged to have been addressed to him by the Respondent, on 3rd January 2015. He never saw the letter before coming to Court.

22. Cross-examined, he testified that Deloitte audit showed there were malpractices. It was proper for the Respondent to ask the Claimant to give his side of the story. By the time the Claimant resigned, he had been told by Koech there was a decision to dismiss him.

23. Call logs at page 9 of Claimant’s documents show Koech called the Claimant persistently. Koech did not physically threaten the Claimant. The Claimant was at Mombasa, while Koech was at Nairobi. Koech did not threaten to confine the Claimant, or make the Claimant’s work environment intolerable, forcing the Claimant into resignation. Koech promised to connect the Claimant to other potential Employers for fresh openings. The Claimant panicked when told the Board was going to dismiss him. He panicked, wrote the resignation letter, to afford himself a soft landing.

24. The Claimant conceded the documents he relies on are from Respondent’s Clients. He was aware they were confidential. The Respondent and its Clients did not authorize the Claimant to use the documents. He made attempts at resolving the dispute with the Respondent Bank. He would not burn the Bank to advance personal gain. The Claimant told the Court on redirection the same documents he presented before the Court are the documents he presented to the CBK Banking Fraud Unit, and the Respondent’s Disciplinary Committee. Uncovering of malpractices would be of help to the Bank and its Clients.

Respondent’s Evidence

25. Linet Khadenje Anyika adopted her Witness Statement filed on 27th March 2017, her Replying Affidavit sworn on 14th November 2016, and the documents filed by the Respondent,

as her evidence in chief. She confirms the Claimant was employed by the Respondent Bank, on the terms and conditions of service stated in the Claim.

26. Deloitte & Touché carried out an audit of the Respondent Bank’s true financial position. It was discovered there was misrepresentation of the Bank’s non-performing loans. The Claimant had a role in these misrepresentations.

27. By an e-mail sent on 17th December 2015, one Dennis Chumbe asked the Claimant to originate the structuring, consolidation and extension of facilities for various loan accounts. This was intended to avoid making provision for non-performing loans. The Claimant proceeded to restructure the loans contrary to the Bank’s Credit Policy.

28. The Claimant did not answer the letter to show cause, satisfactorily. He was invited to a disciplinary hearing on 4th December 2016. All procedural protections due to him were extended to him. Minutes of the disciplinary hearing were exhibited by the Respondent in its Bundle of Documents. The process was fair.

29. Senior Management of the Respondent Bank determined that the Claimant’s contract is terminated. Anyika states by a stroke of fortune, the Claimant wrote to the Respondent on 5th October 2016, opting to resign. He explained in his notice of resignation that assisting in business banking had been overwhelming and he needed to pursue his career in trade/ credit.

30. The Bank accepted his resignation in its letter to the Claimant dated 6th October 2016.

31. Strangely, the Claimant wrote to the Respondent on the same date, purporting to rescind resignation. He alleged to have been coerced by his line Managers and the Directors to resign. He alluded to telephone conversations between him and the Acting Director Corporate, Institutional and Business Banking; and the Acting Director Business Banking, which took place on 4th October 2016, to comprise coercion.

32. The Respondent assessed Claimant’s assertions. It consulted the line Managers and the Directors. It did not find evidence of coercion. It found no reason to accept Claimant’s rescission of his resignation decision.

33. There was no evidence of coercion; it was routine for Senior Managers to call relevant Employees; the calls did not amount to duress; the Claimant did not indicate he was under duress when he wrote his letter of resignation; and it was irregular and unacceptable for the Claimant to unilaterally withdraw his notice of resignation before it expired. Withdrawal was of no legal consequence.

34. In a capsule, Anyika states the Respondent Bank did not terminate the Claimant’s contract; the Claimant resigned voluntarily.

35. Cross-examined, she testified that most Employees implicated in the Deloitte Report left employment. The Claimant is the only Employee with adequate technical knowledge still working.

36. The Claimant’s job description did not include restructuring of accounts. Restructuring would have to go through various approvals.

37. The Disciplinary Committee confirmed the Claimant did not have a role to play in restructuring of accounts.   It was confirmed this role was played by the Directors.

38. The Claimant received a copy of the Disciplinary Committee’s minutes.  He was advised there would be written communication of the outcome, after the Board approved. This advice is not captured in the minutes. Anyika stated the Board had, as of the time the Claimant wrote

his letter of resignation, determined that the Claimant is dismissed. The Claimant had not received communication of the Board’s resolution, as of the time he wrote his letter of resignation.

39. She stated fortune had it, that the Claimant resigned before termination. She was aware, that between 23rd August 2016 and 4th October 2016, the Claimant was interviewed by the CBK Banking Fraud Unit. She did not know what transpired between the Claimant and CBK. Respondent’s Board must have resolved to have the Claimant dismissed, sometime in September 2016. Koech would have known if a decision to dismiss the Claimant had been made by the Board. Anyika did not state in her Affidavit, or Witness Statement, that the Claimant was discussed by the Board.

40. Anyika did not know if Claimant’s evidence would burn or assist the Bank. She confirmed that the Claimant’s salary had been raised. He had met his targets, warranting increments. He has a 25-year term mortgage, which he had at the time Anyika gave evidence, serviced for 1 year.  The Claimant resides in Respondent’s house.

41. Anyika clarified on redirection that the decision of the Disciplinary Committee, was subject to ratification by the Board. The Board’s decision was not communicated to the Claimant. It does not have bearing on the proceedings. The Bank does not curtail Employees from resigning.

Submissions

42. The Claimant submits calls made to him by Directors asking him to resign, amounted to coercion. The calls were persistent on 4th and 5th October 2016. There was no evidence of the Directors, previously making routine calls to the Claimant. The calls made to the Claimant were not made in pursuit of ordinary business. In Max Masoud Roshankar & Another v. Sky Aero Limited [2015] e-KLR, the Court determined that a situation at the workplace, that renders continuation of employment for the Employee difficult, to the extent that the Employee has no option but to resign, amounts to constructive dismissal.

43. The Claimant was absolved of the allegations against him by the Disciplinary Committee. By the time he was coerced into resignation, there was no decision made to dismiss him.

44. It is submitted that Respondent’s action against the Claimant was unfair, illegal and amounted to unfair labour practice. The Claimant submits that he merits 5 years’ salary as general damages for unfair labour practices. In asking the Court to go beyond the statutory capping of the equivalent of 12 months’ salary in compensation for unfair termination, the Claimant relies on the decision of the Court in GMV v. Bank of Africa Limited [2013] e-KLR.

45. His final prayers against the Respondent are submitted to be:-

a) 12 months’ salary in compensation for unfair termination at Kshs. 1,780,800.

b) General damages for unfair termination at Kshs. 8,904,000 being the equivalent of 5 years’ salary.

c) 1 month salary in lieu of notice.

d) Leave days accumulated from 4th November 2016 till the date of Judgment, as the Court ordered the Claimant is still in employment.

e) Withheld salary from February 2017 till the date of Judgment, the Court having ordered the Claimant receives half his salary pending hearing and determination of the Claim.

f) Costs and interest.

46. The Respondent submits that the main dispute is whether the Claimant resigned voluntarily. Both Parties agree the procedure adopted by the Bank in requiring the Claimant to explain his role in the fraud, was fair.

47. In Steve Mutua Munga v. Homegrown Kenya Limited & 2 Others [2013] e-KLR, the Court adopted the definition of the term coercion as given in Black’s Law Dictionary 8th Edition, to comprise compulsion by physical force or threat of physical force. Elements of coercion also include where a person acts out of fear or actual or threatened confinement.

48. The Claimant alleged he was coerced by Acting Directors, Alice and Koech. He did not enjoin these Acting Directors to the Claim. The Court cannot make a finding against them, without hearing them. Koech swore an Affidavit denying he coerced the Claimant. His calls to the Claimant were routine calls. He did not dictate to the Claimant to write his resignation letter. The Claimant did not mention he was coerced in his letter. Relying onPaul Chitechi Mwaro v. Sasini Limited & another [2015] e-KLR, and Reuben Lucheleli Shikuri v. Eldoret Packers Limited [2015] e-KLR, the Respondent submits, that an unaccepted withdrawal of resignation, is of no legal consequence.

49. There are 3 issues in dispute, as understood by the Court. These are:-

a) Was the Claimant constructively dismissed, and if so, was dismissal unfair, warranting payment of the equivalent of 12 months’ salary in compensation to the Claimant?

b) Whether his resignation was voluntary and his letter rescinding resignation, binding on the Respondent. Consequently, is the Claimant still validly in employment?

c) Is he entitled to the remedies claimed?

The Court Finds: -

50. Parties agree the Claimant was employed by the Respondent Bank, effective from 6th August 2012, in the position of Banking Clerk. He later became Associate Relationship Manager. He was in this position, as of 5th October 2016, when he wrote his resignation letter. It is not disputed that he wrote another letter on 6th October 2016, rescinding his letter of resignation of 5th October 2016. Parties do not contest that on the same date the Claimant wrote his letter of rescission, 6th October 2016, the Respondent had written a letter accepting Claimant’s resignation.

51. It is also clear from the record that the Respondent Bank encountered massive fraud in the period leading to the Claimant’s alleged resignation. Various Officers were dismissed as a result of the fraud. They included the Bank’s Chief Executive, one Munir. Parties do not dispute that the fraud was uncovered through audit carried out by Deloitte & Touché, and that the CBK Banking Fraud Unit, investigated the incident following the Report prepared by the audit firm.

52. It is uncontested that the Claimant was issued by the Respondent a letter dated 20th June 2016, to show cause, why disciplinary action should not be taken against the Claimant, for his role in misrepresentation of non- performing loans. He replied on 22nd June 2016, stating he did not make any decision on his own, and he only acted following instructions of his Superiors. He was notified of a disciplinary hearing through a notice dated 1st August 2016. Hearing would take place on 4th August 2016, at Respondent’s Head Office at Nairobi.

53. There are minutes capturing proceedings of the disciplinary hearing, on 4th August 2016. The charges against the Claimant are indicated to include origination of restructuring, consolidation and extension of facilities for various loan accounts; suppression of information on restructuring of facilities from respective customers; and failure to follow up the facility repayments.

54. It is the evidence of Respondent’s Witness Linet Anyika, that the Disciplinary Committee absolved the Claimant. It was concluded the Claimant performed his role within his job description which was to assist Managers. He did not have direct engagement with Bank Clients who were handled by Senior Level Management. This evidence by the Respondent agrees with that of the Claimant.

55. The Disciplinary Committee forwarded its findings to Management in Nairobi. At the time the Claimant resigned and recalled his decision, he had not received any decision from Nairobi with regard to the disciplinary process. Anyika told the Court since there was no decision communicated to the Claimant, the disciplinary proceedings, are irrelevant to the Claim filed herein. The Claimant told the Court Koech had told him through the phone, that a decision to dismiss the Claimant had been made by the Board. This was communicated by Koech, at the time Koech pressured the Claimant to tender in his resignation.

56. Another aspect of the dispute that should be noted is that the Claimant had certain obligations at the time of resignation. He had an outstanding, long-term payable mortgage. He was at some point voted the best Employee of the Bank in the country. There is a certificate on record, issued by the Respondent, attesting to this feat. It is true also that he is still working with the Respondent, at the time of writing this Judgment. He is on half salary as ordered by the Court in his application for interim measures. Lastly, he resides in a house belonging to the Respondent.

57. Against this background, it is concluded the Respondent did not directly dismiss the Claimant, as there was no outcome of the disciplinary process, communicated by Management to the Claimant. It is noteworthy however, that the Disciplinary Committee, whose findings and conclusions were subject to the ratification of Management, found the Claimant not culpable of banking fraud, and the peripheral employment offences associated with fraud.

[a] Constructive dismissal?

58. The Claimant asks the Court to find, relying on the decision of Max Masoud Roshankar, that he was constructively dismissed. He submits that the Respondent created a situation at the workplace, which rendered his continuation of employment difficult. He had no option but to resign. The facts comprising this difficult environment are set out in the preceding paragraphs and need no repeating here.

59. What amounts to constructive dismissal? In Industrial Court at Nairobi, Cause Number 611 [N] of 2009 between Maria Kagai Ligaga v Coca Cola East & Central Africa Limited, the Court held that constructive dismissal occurs where the Employer’s behaviour is so intolerable, that it makes it considerably difficult for the Employee to continue working. The Employee initiates termination, believing himself, to have been fired. The Employer is deemed to no longer be interested in honoring the terms of the contract of employment. The Employee must demonstrate that the Employer has engaged in repudiatory breach. The Court must be persuaded that the Employee has reason to resign. Employer’s actions need not be coercive, threatening or in the nature of duress. The Court in the above decision found the Employee, who had serially been transferred from one country and region to another; who was never given an opportunity to settle down by her Employer and make career progression; and who resigned involuntarily, to have been constructively dismissed. The Employee was granted damages for wrongful dismissal. The decision was upheld in Court of Appeal Civil Appeal Number 20 of 2010, Coca Cola East & Central Africa Limited v. Maria Kagai Ligaga [2015] e-KLR. Similar principles, on the concept of constructive dismissal, are discussed at length, in the Canadian Supreme Court decision Potter v. Legal Aid Services Commission, 2015 SCC 10.

60. The facts in the present dispute do not persuade the Court that the Claimant was constructively dismissed. First, he disputes that he originated the decision to resign. He does not own the decision, but attributes it to coercion, threats, other forms of duress, and promises for a fresh job, made by Acting Directors Koech and Alice. He does not say he resigned, because he believed himself to have been fired.  He suggests he was duped, or compelled by Koech and Alice into writing the resignation letter.

61. Second, the Claimant rescinded his letter of resignation. This was just a day, after he purported to resign. By doing so, he indicated that he could go on working for the Respondent. He ceased to believe that the working condition was so intolerable and irredeemably hostile, that he could not go on working. By rescinding his decision, he no longer could sustain the argument that the Respondent was in repudiatory breach of the contract of employment.

62. In the view of the Court, for resignation from employment to amount to constructive dismissal, it must be unequivocal. An Employee cannot rescind his resignation decision almost immediately it is made, and sustain a claim for constructive dismissal.

63. Constructive dismissal would perhaps have been arguable, had the Claimant not written his letter rescinding resignation, on 6th October 2016.

Resignation, rescission and whether the Claimant is still validly in employment

64. The facts of resignation, acceptance of resignation by the Respondent, and rescission of resignation by the Claimant, are not disputed and need not be restated here.

65. In general, an Employee does not have the right to unilaterally withdraw his resignation once given, as held in the case of Paul Chitechi Mwaro, cited by the Respondent in its Submissions. A notice of resignation is basically a notice of termination of employment, given by the Employee to the Employer. It is a unilateral act. Under the Employment Act 2007, a notice of termination of employment does not have to be accepted by the recipient Party, to become effective.

66. Case law from different comparative jurisdictions however, is that an Employee may withdraw a notice of resignation, where special circumstances exist, relating to the context in which resignation occurred. The Irish Employment Tribunal in UD 946/2007, McManus v. Brian McCarthy Contractors accepted that a letter withdrawing a notice of resignation made by the Employee, was binding on the Employer, having taken stock of the context in which resignation was offered.

67. Withdrawal of the notice of resignation should be communicated to the Employer, as soon as possible. Where an Employee makes the decision on the heat of the moment, and the situation is still retrievable, it has been held that it would be unreasonable for an Employee not to be allowed to recall his decision to resign.

68. In the UK case Kwik-Fit [GB] Limited v. Lineham [1992] IRLR 156, it was held if an Employee resigns on the heat of the moment, and special circumstances exist, the Employer should investigate the matter and ascertain the Employee’s true intentions. Special circumstances, it was held, may include pressures on the Employee, or the Employee’s personality. In this case, the Employee resigned in the heat of the moment after considerable humiliation by his Manager.

69. Case Law suggests for withdrawal of resignation to be acceptable, it must be made within a reasonable time from the date or resignation. The period between resignation and rescission of resignation must be short. The best practice taken from a succession of commonwealth judicial pronouncements, is that the Employer should allow a cooling-off period, to ascertain the circumstances of resignation. Timing of withdrawal is important, where resignation is made in the heat of the moment. If withdrawal of resignation is made weeks, months or years after resignation, it is likely not to be endorsed by the Courts.

70. Acceptance of resignation by the Employer does not bar the Employee from revoking his decision, where it can be shown the decision was made on the spur of the moment, and special circumstances exist. The Court should go beyond the mere acceptance at face value, that because resignation has been accepted, the contractual relationship has been severed. The decision of the High Court of Kenya, William Kariuki v. Kenya Civil Aviation [2008] cited by the Respondent herein in its Submissions, to the effect that acceptance of resignation brings to an end the contract of employment, did not deal with on the spur of the moment resignation, made within the context of special circumstances. If the Employee has resigned, with clear intention to do so, he is bound by his decision, more so where the Employer has accepted resignation. The Employee can only be accepted back in employment, if his Employer consents to the Employee’s decision to withdraw resignation. Clear and unequivocal resignation, which has been accepted by the Employer deprives the Employee of locus poenitentiae [right to withdraw an offer of resignation after it has been accepted].

71.  Courts have cautioned however, that disputes on resignation are highly fact-driven. The best approach is resolving such disputes, is to examine each case on its own facts. The test is whether a reasonable person, would have understood the Employee’s statements and actions, surrounding resignation, to show the Employee to have made a decision to clearly and unequivocally end the employment relationship.

72. Does a letter of resignation constitute clear and unequivocal evidence, that the Employee has made a decision to end the employment relationship? In the Canadian Case [British Columbia] decision, Templeton v. RBC Dominion Securities, Inc. 2005, Carswell Nfld, 216 at paragraph 46,the Court had this to say about resignation letter and resignation decision:-

‘’It is important to distinguish between a letter of resignation, and resignation. A resignation is the decision to terminate the relationship, or equally, a fact or circumstance which unequivocally reflects that decision.

A letter of resignation is simply evidence-cogent evidence- of the Employee’s decision to end the relationship. But it is no more than that; a letter of resignation is not in itself, the Employee’s termination of employment.’’

73.  Are there special circumstances with respect to Claimant’s resignation? The Claimant wrote his letter of resignation, against the background of a disciplinary hearing. The Disciplinary Committee, as stated elsewhere in this Judgment had absolved him of involvement in corporate fraud, which had its root at the top of Respondent’s organogram. No decision to dismiss him, and no findings different from what the Disciplinary Committee had reached, was communicated to the Claimant before his letter of resignation.

74. The trail of documents shows fraud was masterminded by Top Directors and Managers of the Respondent Bank. The leadership of the Respondent Bank, including its Chief Executive was removed from office, due to this fraud. It is clear to the Court, that the Claimant did not approve credit levels, and only had a clerical role, in restructuring of loans. Approval of credit, as shown in Respondent’s Credit Risk Management Policy, was the mandate of the Board, the Executive Credit Committee, the Managing Director, and the Head of Credit.  Each organ exercised its mandate, depending on the amount of credit sought by respective clients.

75. The Claimant gave evidence to the CBK Banking Fraud Unit, which did not sit well with Respondent’s Directors and Top Managers. The transaction relating to Rising Star Limited, where Kshs. 580 million was credited and debited the same day, creating the impression that the Client had retired the old loan and acquired a new loan of the same amount, implicated Koech, who was the Director of Corporate Accounts at the time of the transaction. This fraud was laid bare before the CBK Banking Fraud Unit, where the Claimant gave evidence.

76. Koech became Acting Executive Director. To avoid problems with the CBK over his participation in the scandal, Koech went at great lengths, making false promises to the Claimant about assisting the Claimant in securing a new job. He applied pressure on the Claimant to tender resignation. He made several calls to the Claimant on 4th and 5th October 2016, leading to the letter of resignation. These were not routine calls. Directors do not routinely call junior staff, several times in a single day, to discuss mundane matters.  Koech pressed the Claimant to resign. He advised the Claimant, notwithstanding that the Claimant has been absolved by the Disciplinary Committee, that the Board, had decided the Claimant is summarily dismissed. He cajoled the Claimant never to mention the damning Deloitte Report, and Claimant’s engagement with the CBK Banking Fraud Unit, to any person. Koech told the Claimant this was important, for ease of transition in the leadership of the Bank.

77. Top Management went as far as to falsely indicate the Claimant to have signed Facility Extension/ Amendment form. The document was prepared at the Head Office at Nairobi, while the Claimant was at Mombasa. The purpose was to rope in the Claimant in doctoring of banking records. Certain Loan Accounts had matured, and were in arrears. The Directors and Managers sought to have documents doctored, to misrepresent the Bank’s true financial position. They went as far as forging their Employee’s signature on the form titled Facility Extension/ Amendment.

78. The Claimant was coerced into writing the letter of resignation. The Court does not think that the Respondent needed to have applied physical force, or threatened the Claimant with confinement, for it to be concluded that the Respondent coerced the Claimant. The actions by Koech in particular, amounted to wrongful pressure, intended to make the Claimant write a letter which he would not have written of his own free will.  Koech and Alice need not be party to this Claim, for the Court to make this finding.

79. The Claimant testified he was confused, and caved in. He wrote the letter. There were special circumstances surrounding his letter of resignation. In terms of clear and unequivocal evidence of resignation decision, a letter written in circumstances set out above can hardly be persuasive, in showing that the Employee has decided to resign. The letter of resignation was done in the heat of the moment.

80. The Claimant was the best Employee of the Bank at one time. He had a mortgage to be repaid within 25 years. He serviced the mortgage from his earnings from the Respondent. He resided in a house owned by the Respondent. He has a family which looks up to him. Why would he just rise up in the morning, and without provocation, or sight of greener pastures, tender his resignation? These facts point to special circumstances.

81. The Claimant wrote his letter rescinding notice of resignation a day after writing the letter of resignation, on 6th October 2016. This was within the principle that withdrawal of resignation should be made within the shortest time possible, after the letter of resignation issues. The Respondent purports to have investigated the claims of coercion made by the Claimant, and interviewed implicated Directors. They found no coercion and rejected withdrawal. This process was carried in consultation with the Officers the Claimant alleged to have coerced him, and it can hardly have been an objective process. The entire Board had its position to protect. The Claimant’s continued employment with the Bank was inimical to the Board’s position.  The Respondent accepted Claimant’s letter of resignation with haste.  The letter accepting resignation is dated 6th October 2016, a day after Claimant wrote his letter of resignation, and the same day he rescinded his letter of resignation.  There was no cooling off period.  There was no genuine investigation of the circumstances surrounding Claimant’s resignation.

82. The Court is content to conclude the Claimant did not, of his own free will, make a decision to terminate his contract of employment.

83. He is still validly in employment. What happened, on 5th October 2016, was a fugacious interference with the Claimant’s contract of employment, rather than its termination.

Remedies

84.  The claim for constructive dismissal has been ruled out, and the equivalent of 12 months’ salary in compensation for unfair termination is not awardable.

85. In the Ruling of the Court dated 6th February 2017, the Court preserved the Claimant’s contract of employment, the only condition being that he would receive half pay of Kshs. 74,000. The actual amount should have been Kshs. 74,200, Claimant’s salary at the time having been Kshs. 148,400.

86. The Claimant went on working, as per the order of the Court, and was not evicted from Respondent’s house.

87. His prayer for general damages for coercion, mistreatment and/or harassment is not in the circumstances, convincing. He gave a figure of 8. 9 million in his Closing Submissions, as general damages. The Court thinks this is way out of proportion, the Claimant’s contract having been preserved. The employment relationship must be protected from the excesses of both the Employer and the Employee. It must be sustained.

88. The Officers and Directors who may have applied wrongful pressure to the Claimant to terminate his contract no longer lead the Bank. Circumstances have changed, and the Claimant should seek to solidify his relationship with the Bank, rebuild his relationship under the new leadership, strive to be the best as he was in the past, and not wreck the relationship by making unreasonable demands.

89. He wrote a letter rescinding the letter of resignation. The Court has concluded that letter, should have been accepted, and the Claimant allowed to continue working. In the end the Respondent declined to have the Claimant back, mainly because Respondent’s Directors at the time, were compromised, and at the heart of fraud subject matter of CBK investigation. The Court however, protected the Claimant’s contract, so that in the end, he lost nothing.  He has not lost his annual leave entitlement, or service pay, if these benefits are given in his contract and the law.  His prayers for annual leave pay and service pay are without foundation.

90. All these factors taken into account, the Court makes the following orders:-

[a] It is declared the Claimant is still validly an Employee of the Respondent Bank.

[b] The letter of resignation issued by the Claimant to the Respondent dated 5th October 2016 is declared to have been validly withdrawn by the Claimant, through his letter to the Respondent dated 6th October 2016.

[c] The Respondent shall pay to the Claimant arrears of salary in full, dating back to the time when the Claimant last received a full salary.

[d] Costs of the Claim to the Claimant.

Dated and delivered at Mombasa this 16th day of February 2018.

James Rika

Judge