GEORGE OCHIENG ONYANGO v BARCLAYS BANK OF KENYA LIMITED [2004] KEHC 94 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI (MILIMANI COMMERCIAL COURTS)

Civil Case 883 of 2000

GEORGE OCHIENG ONYANGO …..........................……….PLAINTIFF

VERSUS

BARCLAYS BANK OF KENYA LIMITED …………….DEFENDANT

JUDGMENT

The Plaintiff was employed by the Defendant on 18thMarch 1987 at a salary of Kshs 34,464/= per annum. The terms of the employment were contained in a letter of thesame date signed by the Plaintiff and the ManagingDirector of the Defendant. On 22nd July, 1993 theDefendant entered into a Collective Agreement with itsemployees. The said letter of employment and collectiveAgreement were produced as exhibits 1 and 2 by thePlaintiff. The Plaintiff remained in the service of theDefendant until September, 22, 1994. On that day he wassuspended from duty. The Letter of suspension gave thereason for suspension as the Plaintiffs apparent involvement in the use of an account at the Defendant'sQueensway House Branch for fraudulent purposes. Thesuspension was to continue until investigations werecompleted.

The Plaintiff testified that on 21st September, 1994,when he reported on duty, his manager informed him thatfour policemen wanted to talk to him. The policemenwere accompanied by two inspection Officers of theDefendant. The Plaintiff was taken to one of their officesand was forced to sign a statement. The Plaintiff was thentaken to Buru Buru Police Station and later charged inNairobi Chief Magistrates Court Criminal case Number 4065of 1994. He was charged with stealing contrary to Section275 of the Penal Code, uttering false documents contraryto section 353 of the Penal Code and making documentswithout authority contrary to Section 357 A of the PenalCode. Before the conclusion of the criminal trial theDefendant on 21st November 1994 dismissed the Plaintifffrom its service. The reason for dismissal was given as the Plaintiff’s irregular involvement in cheque conversion. TheLetter of dismissal cited clause A5 (a) (i) of the collectiveAgreement and clauses 3 and 8 of the terms andconditions of the Plaintiffs employment.

The Plaintiff further testified that during the period of suspension he was paid half salary. During the same period the Plaintiff never appeared before any disciplinary panel regarding the alleged complaints. The Plaintiffdenied any misconduct. At the time of dismissal the Plaintiff was earning a monthly salary of Kshs 16,406/= and was entitled to a house allowance of Kshs 1,380/= per month. The Bank (Defendant) did not wait for the conclusion of the criminal case aforesaid before dismissing the Plaintiff. The Criminal case terminated on 31st January, 1996. The Plaintiff was acquitted. The Plaintiff further testified that when he was charged as stated earlier the

Defendant had his account with Kenya commercial Bank Sarit Centre branch frozen. When he was acquitted he had to seek a court order to unfreeze the said account in the criminal case aforesaid. The Defendant instituted NAIROBIhigh COURT civil case NO.508 OF 1996 against the Plaintiffclaiming from the Plaintiff payment of sums lost by itscustomers. The Defendant obtained an ex-parted orderstaying the order to unfreeze the Plaintiff's said account.When the matter came up for inter-partes hearing the saidorder of stay was discharged. The Plaintiff filed thepresent suit. The said Nairobi HCCC No.508 of 1996 waseventually dismissed with costs which have been paid.

The Plaintiff testified that his dismissal was wrongfuland unlawful because he was not invited to defend himselfbefore any disciplinary proceedings. He had worked forthe Defendant for 71/2 years and for all that period he had not been reprimanded or given any warning. The Plaintiff therefore prayed for orders sought in his Plaint.

In cross-examination the Plaintiff admitted that theletter of employment provided for a termination notice of1 month. He further admitted that the bank could terminate his employment for gross misconduct and for improper conduct. He further admitted that the CollectiveAgreement also provided for summary dismissal formisappropriation, breach of secrecy, etc. The Plaintiffadmitted that he was forced to write a statement in whichhis misdeeds were indicated and which statement was thebasis of his dismissal and the said criminal case. ThePlaintiff further confirmed that at the time of his dismissalhe was indebted to the bank in the sum of about Kshs1,000,000/=. He was not paid anything. He was howeverentitled to terminal benefits such as pension, gratuity buthe did not know how much and when the same would bepayable.

The Defendant called one witness, Araka JamesOyamo, the Defendant's Security Manager. He told the court that on 20th September, 1994 he invited the Plaintiff for interview following information that there werecheque conversions through the bank involving the Plaintiff.  He was alone with the Plaintiff during the interview which took 2 1/2hours. The Plaintiff volunteered to make a statement which the witness recorded. The original statement was handed over to the police for theiruse in the criminal proceedings aforesaid. I did not allow a photocopy of the statement to be produced, the witness further testified, that based on the said statement, thePlaintiff was charged, prosecuted and acquitted. He also produced a letter from the Defendant's industrial Relations Department to its Personnel Director. The letter is dated7th November, 1994 and confirmed that the Plaintiff was involved in fraud. This led to the dismissal of the Plaintiff.

The witness told the Court that bank employees are supposed to be honest and diligent in all the operations they handle in the cause of their work.  The Plaintiff didnot meet this expectation.

In cross-examination the Defendant's said witnessdenied that he interviewed the Plaintiff in the presence of policemen. He testified that he called the policemen afterthe interview had been completed. The witness believedthat there had been disciplinary proceedings before the Plaintiffs dismissal, in his view however, the bank took the right decision against the Plaintiff.

In his submissions in court counsel for the Plaintiffwas of the view that the Plaintiff had proved his case on abalance of probabilities and is entitled to judgment asprayed in the plaint. Counsel argued that the employmentcontract did not provide for summary dismissal, and if theDefendant purported to summarily dismiss the Plaintiffthis action was not in accordance with the saidemployment contract, it was therefore unlawful, if on theother hand the Defendant purported to dismiss thePlaintiff under section 17 of the Employment Act the Defendant should have acted fairly by giving the Plaintiff an opportunity to be heard. The Plaintiffs Counsel reliedon the case of Charles Kariuki Wambugu -v - The KenyaNational Library services - Nairobi HCCC No. 2013 of 1989 (UN reported), where A.M. Akiwumi J., as he then was, saidat page 7 of the judgment that dismissal under section 17 of the Employment Act does not exclude the rules ofNational Justice.

Counsel further relied on the case of Julius NjugunaKinuthia -v - Barclays Bank (K) Ltd - Nairobi HCCC No. 2072 of 1988 (unreported) where Hayanga J. also said at page 16that considerations of National Justice are permissibleunder master and servant situation. Counsel also placedreliance on the case of CP.C industrial Products (Kenya)(Ltd) -v - Omweriva Ngima - Nakuru CA. No.197 of 1992(unreported) where the Court of Appeal dismissed anappeal and agreed with the trial judges' finding that therespondent's dismissal had been arbitrary malicious andcallous.

On Special damages Counsel submitted that thePlaintiff had proved the same and judgment should beentered for him in the sum of Kshs 305,502/= excludingthe sums claimed as pension.

On General damages counsel submitted that as thetermination of the Plaintiff was unlawful and without notice he is entitled to general damages which is theequivalent of twelve months salary. Counsel furtherargued that the Plaintiff had suffered financial loss as aresult of the Criminal and Civil proceedings referred toabove. He suggested Kshs 250,000/= as general damages.

In reply counsel for the Defendant submitted that thePlaintiff had not established his case on a balance ofprobabilities. General damages in counsel's view are notawardable for breach of contract particularly in respect ofemployment contracts. For this proposition he relied onthe decision in the case of sonve - v - Siaya TeachersCooperative Savings and Credit Society and Another:Kisumu C.A. No.108 of 1998 (unreported).

Counsel further submitted that the fact that thePlaintiff was acquitted of the criminal charge did not takeaway the Defendant's right to dismiss the Plaintiff. For thisproposition he relied on the case of Kiggundu -v - BarclaysBank of Uganda Ltd (I975) E.A.569on Special damages Counsel submitted that these hadnot been properly pleaded. He further argued that thePlaintiff was lawfully suspended and the claim for salary forthis period is without basis. The subsequent summarydismissal was also lawful and the Plaintiff was not entitledto the damages claimed.

On the Plaintiffs claim for full terminal benefitsCounsel submitted that no contractual basis had been laidfor the same, in any event the same had not beenparticularized and strictly proved, counsel prayed for dismissal of the Plaintiffs suit.

In my view the entire dispute between the Plaintiffand the Defendant depends on whether or not thetermination of the Plaintiffs employment was wrongful.The Plaintiff was employed under a written contract which provided that the employment could be terminated at any time by either party giving one month's notice of termination in writing or paying one month's salary in lieuthereof. There was a proviso to this term in the following terms that should the Plaintiff commit any breach of the conditions of the employment contract or be guilty ofunsatisfactory conduct inside or outside the bank, the Bank reserved the right to take disciplinary action against the Plaintiff as appropriate.

The termination of the contract could only bewrongful if it was made in breach of its terms, under the  employment contract governing the relationship betweenthe Plaintiff and the Defendant, the Defendant or thePlaintiff could terminate the said contract without givingany reasons by either giving one months' notice or bypaying one months salary in lieu thereof.

The Defendant did not give the Plaintiff one month's notice of termination in writing nor did It pay to the Plaintiff one month's salary in lieu of notice. The Letter of dismissal however cited clause A 5(a)(1) of the collectiveAgreement in addition to Clauses 3 and 8 of the terms and conditions of employment. The Defendant thereforedismissed the Plaintiff on the ground that he was guilty of gross misconduct and/or serious neglect of duty, it soughtto prove this with a document headed strictly private andconfidential an internal memo dated 7th November, 1994from the Defendant's industrial Relations Department tothe Personnel Director. This document showed particulars of alleged fraudulent activities of the Plaintiff. Thisdocument was based on a statement purportedly written by the Plaintiff. The alleged statement was not produced in evidence by the Defendant. This is the statement that the defence witness Araka James Oyamo attempted to produce unsuccessfully, it is the statement that was the basis of the criminal trial referred to earlier. No evidencewas lead at the criminal trial by the Defendants. No otherevidence was adduced before me to show that thePlaintiff was guilty of gross misconduct and/or neglect ofduty, in the result I hold that the Defendant has notshown that it was entitled to summarily dismiss thePlaintiff. The effect of this finding is that the Defendantcould only dismiss the Plaintiff pursuant to clause 13 of the employment contract referred to earlier by giving thePlaintiff one month's notice of termination or pay onemonth's salary in lieu of notice. The termination of thePlaintiffs employment was therefore wrongful for want ofnotice or payment in lieu of notice.

Having found that the termination of the Plaintiff'semployment was not in accordance with the employmentcontract I have to decide whether or not the Plaintiff isentitled to any damages. The Plaintiff claimed thefollowing alleged special damages:

(a)  Full salary from October 1994 until such timeas the Court shall determine the Plaintiff'semployment to have been terminated.

(b)  One month's salary in lieu of notice.

(c)Full terminal benefits including Gratuityunder the Collective Bargain Agreement foryears worked.

The Law is now settled that special damages must bespecifically pleaded and strictly proved. The Plaintiff'sclaim at paragraph (a) above is for full salary from October 1994 to the date of termination. The Plaintiffs serviceswere terminated by the Defendant by its letter dated 21stNovember, 1994.  Although I have found that thetermination was wrongful, the said date is still the date thePlaintiff's employment was terminated. The Plaintiff wastherefore entitled to his full salary for the month ofOctober 1994 up to 21st November, 1994. He was however,only paid ½ salary, under paragraph (a) above l award tothe Plaintiff-

(i)   Kshs 8,203/= being half salary that was notpaid to the Plaintiff for the month ofOctober 1994.

(ii)  The Plaintiff also testified that he was paidhalf salary for the month of November 1994. The Plaintiff in the light of what l have saidabove was entitled to full salary for the daysworked in November, I994 which should havebeen Kshs 12,304. 50 but he was instead paid1/2of this. The Plaintiff is entitled to thebalance which is Kshs 6,152. 25. The totalamount awarded under paragraph (a) aboveis therefore Kshs 14,355. 25.

The Plaintiff's claim under paragraph (b) above isprovided for under the employment contract referred toabove. Having found that the Defendant was not entitledto summarily dismiss the Plaintiff for gross misconduct orneglect of duty, and therefore the termination waswrongful, the claim under this paragraph is valid. TheCourt of Appeal in the case of Alfred J. Githinji -v - Mumiassugar Company Ltd: NAIROBI CA. N0. 194 of 1991(unreported) dealt with this issue and held that upon thewrongful termination of the employment of an employeehe is entitled only to the amount specified in his contractof service as payable to him by his employer upon thetermination of his employment wrongful or otherwise, inlieu of notice and not to general damages at large. Iaccordingly award the Plaintiff one month's salary in lieuof notice which is Kshs 16,406/=.

The Plaintiffs claim at paragraph (c) above althoughpleaded, has not been proved. The Plaintiff indeed had no idea what he was claiming under this head. The same isaccordingly rejected.

The Plaintiff further claimed general damages. Thisclaim I am afraid must fail. The decision of the court ofAppeal in the cases of Alfred J. Githinji -v - Mumias SugarCompany Ltd: Nairobi C.A. 194 of 1991 (supra) and James N.Sonve -v - Siava Teachers Co-operative Savings and creditSociety and Another (supra) are binding on me. in thesecases the Court of Appeal held that upon the terminationof employment of an employee he is entitled only to theamount specified in the contract of employment in lieu ofnotice and not to general damages at large. Thecircumstances of the Plaintiff are irrelevant. The previousproceedings criminal or civil are not also relevant to thePlaintiffs present claim.

In summary judgment is entered for the Plaintiff asfollows:-

(a)  Kshs 14,355. 25 being unpaid salary

(b)  Kshs 16,406/ = being one month's salary inlieu of notice.

(c)  Interest on (a) and (b) at Court rates from thedate of filing suit until payment in full.

(d)  Costs plus interest on costs as usual but thecosts shall be on the subordinate court scale.

DATED AND DELIVERED AT NAIROBI THIS 17th DAY OF JUNE2004.

F. AZANCALALAAC. JUDGE