Nthenya v Rafiki Microfinance Bank Limited [2024] KEELRC 13430 (KLR)

Nthenya v Rafiki Microfinance Bank Limited (Cause E620 of 2019) [2024] KEELRC 13430 (KLR) (16 December 2024) (Judgment)

Neutral citation: [2024] KEELRC 13430 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E620 of 2019

BOM Manani, J

December 16, 2024

Between

Virginia Nthenya

Claimant

and

Rafiki Microfinance Bank Limited

Respondent

Judgment

Introduction 1. The dispute between the parties revolves around the legitimacy of the Respondent’s decision to terminate the Claimant’s contract of service. Whilst the Claimant contends that the decision was unjustified and violated her rights, the Respondent avers that it was justified.

Claimant’s Case 2. The Claimant avers that the Respondent hired her services as a Bank Teller through a contract of service which was executed by the parties on 3rd November 2014. She avers that her entry salary was agreed at Ksh. 30,000. 00 per month.

3. The Claimant contends that she began serving the Respondent under a probationary contract. She avers that the contract was subsequently confirmed on 20th May 2015.

4. The Claimant contends that she served the Respondent diligently in the aforesaid position until May 2017 when she was promoted to the position of Supervisor. However, the Respondent allegedly did not issue her with a letter confirming her into the new position.

5. The Claimant avers that despite the Respondent’s failure to confirm her promotion, she commenced serving as a Supervisor immediately. She contends that she continued serving in this new position until 18th May 2019 when her services were terminated.

6. The Claimant avers that as a supervisor, she was entitled to earn a salary of Ksh. 45,000. 00 per month. However, the Respondent continued to pay her Ksh. 30,000. 00 per month. As such, she contends that she suffered loss of Ksh. 460,000. 00 through underpayments.

7. The Claimant contends that on 8th November 2018, the Respondent’s Investigation Manager arrested her whilst she was on duty in the full glare of other members of staff. She avers that the said officer locked her up until she was handed over to the police for re-arrest.

8. The Claimant avers that the Respondent did not immediately inform her the reasons for her arrest. She avers that it is only after she was re-arrested by the police that she learned that she was being accused of having tampered with data in the Respondent’s computer system allegedly to facilitate an illegal transaction on a customer’s account.

9. The Claimant contends that the manner of her arrest was degrading. She avers that the arrest was conducted by a male employee in the presence of members of staff with the sole intention of humiliating her. As such, she contends that her right to dignity was violated.

10. The Claimant contends that she was held in police custody overnight before she was arraigned in court the following day to face charges of fraud. However, the charges were subsequently and hurriedly withdrawn.

11. The Claimant contends that the Respondent caused her to be arrested and charged with the aforesaid offense and subsequently terminated her services on this account but spared the actual culprit similar treatment. As such, she contends that her right not to be discriminated was violated.

12. The Claimant also accuses the Respondent of having subjected her to unfair labour practices. She contends that the Respondent’s officer who arrested her had no such powers. She further avers that the Respondent illegally placed her in custody.

13. The Claimant avers that after she was charged in court, the Respondent sent her on compulsory leave for three months in order to conduct investigations into the matter. She contends that this was followed with a letter terminating her services.

14. The Claimant contends that the Respondent’s decision to terminate her employment was unlawful. She asserts that the Respondent did not have a valid reason to justify the decision. She further avers that the Respondent did not afford her the right to be heard before the decision was made.

15. She contends that the Respondent sent her an invite on 12th December 2018 at 7 pm to attend a disciplinary hearing on 13th December 2018 at 8 am. She says the notice given to her was less than twelve hours. She contends that she was scheduled to sit an examination on 13th December 2018. As such, she requested for the hearing to be rescheduled but to no avail. In her view and given the foregoing, the time the Respondent accorded her to prepare for the hearing was inadequate.

16. The Claimant further contends that the Respondent failed to issue her with a notice to show cause or any other document specifying the charges that she was to face. As such, she contends that she was deprived of information which was critical to preparing her defense thus violating her right to information.

17. The Claimant contends that notwithstanding the aforesaid, the Respondent proceeded with the disciplinary hearing in her absence. Thereafter, it terminated her services

18. The Claimant avers that despite the proceedings of 13th December 2018, the Respondent convened another disciplinary session on 21st January 2019 to which she was invited. She contends that she attended the session and explained her position. She contends that after the hearing, the Disciplinary Committee (the DC) released her whilst promising to reach out to her at a later date.

19. The Claimant contends that the proceedings of 21st January 2019 were a sham since the Respondent had already terminated her services following the proceedings of 13th December 2018. She avers that the Respondent did not serve her with any charges before the purported session of 21st January 2019.

20. The Claimant contends that at the time her contract was terminated, she had served the Respondent for more than four years. She contends that throughout this period, she had no disciplinary issues at the workplace.

21. She contends that the Respondent’s actions against her were unfair, unlawful and humiliating and violated her constitutional rights. As such, she prays for the various reliefs set out in her Statement of Claim.

Respondent’s Case 22. In response, the Respondent admits that it engaged the Claimant’s services in October 2014. However, it avers that she was hired as a graduate trainee before she was confirmed in the service delivery section of the bank.

23. The Respondent denies having engaged the Claimant in any other position within its rank and file. It further denies that she was promoted to the position of supervisor or given additional duties as she claims.

24. The Respondent avers that on 8th November 2018, it received a report from a member of staff that he had received notification that his email address and mobile telephone number had been linked to a particular bank account through the mobile banking service without his authorization. It (the Respondent) contends that it immediately opened investigations into the incident and realized that a sum of Ksh. 70,000. 00 had been withdrawn from the affected account after it was irregularly linked to mobile banking. It (the Respondent) contends that further investigations into the matter revealed that the account had been linked to mobile banking by one of its officers with the assistance of the Claimant.

25. The Respondent contends that following this discovery, it lodged a complaint with the Banking Fraud and Investigations Department. As a result, the Claimant was arrested and charged with the offense of stealing by servant.

26. The Respondent avers that it suspended the Claimant from work to pave way for further investigations into the matter. It contends that the results of the investigations revealed that the Claimant’s credentials were used to change the email address and telephone number in the affected client’s account. As a result, there was a fraudulent transfer of Ksh. 70,000. 00 from the said account.

27. The Respondent contends that following this development, it invited the Claimant to a disciplinary hearing to allow her a chance to account for her actions. It contends that the disciplinary hearing was initially scheduled for 13th December 2018 but the Claimant did not attend. As a result, it was rescheduled to 21st January 2019.

28. The Respondent contends that upon considering the deliberations on the two days, it found the Claimant’s conduct culpable. As a result, it terminated her contract of service as evidenced in its letter of 18th March 2019.

29. The Respondent contends that upon terminating the Claimant’s employment, it computed and paid her exit dues. These included: her salary for the days worked; pay in lieu of notice; and pay for accrued leave days. In addition, the Respondent contends that it issued the Claimant with a Certificate of Service.

30. The Respondent avers that the decision to terminate the Claimant’s employment contract was justified and was arrived at in accordance with fair procedure. As such, her contention that the contract was terminated unfairly and in violation of her constitutional rights is misplaced.

31. The Respondent avers that after it recovered the lost sum of Ksh. 70,000. 00, it resolved not to pursue the criminal case against the Claimant. As a result, the said case was withdrawn.

32. The Respondent avers that the Claimant was not the only employee who was punished for the fraudulent invasion of its customer’s bank account. It contends that other employees who acted in cahoots with her resigned before the disciplinary case against them was processed. As such, the Respondent denies the allegations by the Claimant that she was discriminated in the process.

Issues for Determination 33. After evaluating the pleadings and evidence on record, I arrive at the conclusion that the following are the issues for determination in the cause:-a.Whether the contract of service between the parties was unfairly terminated.b.Whether the Claimant’s constitutional rights were violated.c.Whether the Claimant had been promoted to the position of Supervisor before her contract of service was terminated.d.Whether the Claimant is entitled to the reliefs that she seeks through these proceedings.

Analysis 34. In order to determine whether the decision to terminate the Claimant’s contract of service was lawful, the court is required to consider two things: whether the Respondent had a valid reason to justify the decision; and whether the Respondent adhered to fair procedure in making the decision.

35. The evidence on record shows that the Respondent terminated the contract between the parties on account of alleged misconduct by the Claimant. The Respondent contends that the Claimant tampered with its digital banking platform in order to fraudulently access a client’s account with a view to stealing funds from it.

36. According to the Respondent, the Claimant, acting in cahoots with other members of staff, altered data belonging to a client’s account in order to access it without the client’s authorization. They went further and unlawfully withdrew the sum of Ksh. 70,000. 00 from the said account. However, before the funds could get into their possession, the process was intercepted and stopped.

37. The Respondent relies on an investigation report by its investigation manager which disclosed that the Claimant had modified data on the affected account to facilitate the fraudulent transactions. The report further indicated that the Claimant’s username had been used to access the account in question for purposes of manipulating data on it.

38. The Claimant denies the accusation. She avers that the changes to the account were effected by other members of staff. She further argues that the telephone numbers that were allegedly changed are shown to have been in the system as early as May 2018. Therefore, the assertion that she tampered with them is misleading.

39. I have looked at the account changes report which was tendered in evidence. The report shows that data on the account in question was modified on two occasions. The first modification happened on 31st May 2018 at 12. 00 AM. This modification is indicated to have been effected using username Rmaina. The second modification is indicated to have happened on 7th November 2018 at 12. 00 AM. The username that was used to effect the modification is shown as Vnthenya.

40. It appears that after the modifications of 31st May 2018, the data on the account was adjusted to include two cell phone numbers: 0716757142 and 0723429005. However, following the modification of 7th November 2018, another number (0706757140) was added.

41. It is unclear how these changes led to the irregular drawing of Ksh. 70,000. 00 from the account. However, it is clear that the changes that were made to the account on 7th November 2018 were by username Vnthenya.

42. The Respondent avers that username Vnthenya belonged to the Claimant. It contends that only the Claimant had the password to the username.

43. The Respondent avers that the Claimant, like all other members of staff, was prohibited from disclosing the password to her username to third parties. Therefore, for her username to have been used to access the account in question, she must have either irregularly shared the password to it with third parties who then used it to access the account or accessed the account herself.

44. There is no record to show that the Claimant denied that username Vnthenya was assigned to her. There is no evidence to show that she denied that she had an exclusive password for the username.

45. The Claimant did not provide cogent evidence to account for how the username was used to access the affected client’s account on the night of 7th November 2018. She did not even suggest that her account had been hacked or the password stolen.

46. In the absence of an explanation by the Claimant regarding how her username was used to access the account in question, the irresistible and logical conclusion is that she either effected the illegal entry into the account by herself or shared the password to her username with a third party who in turn used it to irregularly access the account. Either of the two scenarios was prohibited by the Respondent unless it was executed with the account holder’s authorization. As such, there was a credible basis for the Respondent to believe that the Claimant had committed the infraction of illegal access to a client’s account.

47. Section 43 of the Employment Act entitles an employer to terminate an employee’s contract of service if he has genuine grounds to believe that the employee has committed an infraction at the workplace. In my view, the evidence in the Respondent’s possession entitled it to entertain a genuine believe that the Claimant had committed the infraction in question (see Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others [2019] eKLR). As such, the Respondent had a valid reason to consider terminating the Claimant’s employment.

48. The record shows that after the Claimant was suspected of having committed the infraction in question, the matter was reported to the Banking Fraud and Investigation Department. The unit conducted investigations into the incident where-after it preferred criminal charges against the Claimant. Meanwhile, the Respondent suspended the Claimant from duty to facilitate the investigation process.

49. The evidence on record shows that the Respondent invited the Claimant for a disciplinary hearing on 13th December 2018. The invite was communicated through a phone call on 12th December 2018.

50. The Claimant contends that the date was unsuitable because she had an examination on the same day. Besides, the notice was too short to allow her room to prepare for the hearing.

51. The record shows that despite the Claimant’s protestations, the Respondent’s DC went on with the hearing on 13th December 2018. The minutes of the meeting show that the DC recommended that the Claimant’s contract be terminated on account of gross misconduct.

52. The evidence on record shows that after the session of 13th December 2018, the Respondent summoned the Claimant for yet another disciplinary session scheduled for 21st January 2019. The invite for this latter session was sent by email on 17th January 2019.

53. Although the DC sat on 13th December 2018 and recommended that the Claimant’s contract be terminated, there is no evidence that the Respondent acted on this recommendation. Instead, it summoned the Claimant for the second session which was fixed for 21st January 2019.

54. It appears to me that the Respondent had reservations regarding the propriety of the process of 13th December 2018 and abandoned it. This explains why it reconvened the disciplinary session on 21st January 2019. As such, nothing turns on the proceedings of 13th December 2018 as it is evident that the Respondent did not act on the recommendations that emanated from the session.

55. The Claimant admits that she attended the DC hearing of 21st January 2019 and presented her case. It is after this session that the Respondent issued her with the letter terminating her employment.

56. The Claimant has termed the proceedings of the DC a sham. She alleges that she was not provided with a notice to show cause letter indicating the particulars of the accusations against her.

57. This complaint by the Claimant raises an issue of grave concern. However, the court does not think that it is open to it to re-open an inquiry into this aspect of the case.

58. The record shows that for some reason, the Claimant elected to have a two pronged approach to settling her grievances with the Respondent. Besides this case, she filed Constitutional Petition No. 370 of 2019 in which she contended that the Respondent and other actors had violated her constitutional rights.

59. It is noteworthy that in that Petition, she accused the Respondent of having violated her right to information. In response, the Respondent contended that the Claimant had not demonstrated that she was denied access to information as she alleged. The Respondent further contended that the Claimant had not demonstrated that she requested for any information regarding the process under inquiry which it declined to provide.

60. The court agreed with the Respondent. As such, it dismissed the Claimant’s plea with respect to the right to information.

61. The Claimant’s assertion in this action that she was denied information on the charges she was to face is an attempt to resurrect a matter that she had taken up and lost in the Constitutional Petition. As such, I do not think that it is good practice for this court to re-open the issue.

62. Having regard to the foregoing, I am satisfied that the Respondent had valid grounds to terminate the contract between the parties. I am also satisfied that the Respondent accorded the Claimant fair procedure in the process that led to her release from employment. As such, I arrive at the conclusion that the Claimant’s suit is unmerited.

63. The Claimant has alleged violation of several of her rights. She alleges that the Respondent treated her in a discriminatory manner by electing to victimize her for the infraction in question whilst sparing other actors in the process. She also accuses the Respondent of having humiliated her when it subjected her to an arrest in the full glare of her workmates thus violating her right to dignity.

64. These very assertions were made in Constitutional Petition number 370 of 2019. After considering the evidence that was presented before him, the learned Judge rejected the pleas.

65. The introduction of the same assertions in this cause is an attempt to have a second bite at the cherry. This is not permissible. As such, I decline to make any pronouncements on the alleged rights violations.

66. The Claimant has claimed Ksh. 460,000. 00 being the alleged shortfall in the salary that she was earning and what she was supposed to have been paid after she was allegedly promoted to the position of supervisor. However, she tendered no evidence that the Respondent had issued her with a letter of promotion. Further, she tendered no evidence that the Respondent was paying its supervisors salary of Ksh. 45,000. 00 which she claims.

67. The fact that the Claimant alluded to supervisory duties in her handover notes is no proof that she had been promoted to that position. It is noteworthy that the contract by which the Claimant was hired as a teller was in writing. As such, only an addendum contract in writing varying her initial contract would be admissible as proof that she had been promoted. Consequently, this claim fails.

Determination 68. The upshot is that I find that the Claimant’s suit against the Respondent is devoid of merit.

69. Accordingly, I dismiss the case with costs to the Respondent.

DATED, SIGNED AND DELIVERED ON THE 16THDAY OF DECEMBER, 2024B. O. M. MANANIJUDGEIn the presence of:…………. for the Claimant………………for the RespondentORDERIn light of the directions issued on 12th July 2022 by her Ladyship, the Chief Justice with respect to online court proceedings, this decision has been delivered to the parties online with their consent, the parties having waived compliance with Rule 28 (3) of the ELRC Procedure Rules which requires that all judgments and rulings shall be dated, signed and delivered in the open court.B. O. M MANANI