Court awards ex-Co-op Bank employee KSh1.1m over flawed dismissal process

Get breaking business news on WhatsApp

The Employment and Labour Relations Court has ordered Co-operative Bank of Kenya to pay a former employee KSh1.1 million after finding that the lender skipped required steps when it dismissed him for poor performance, even though the court agreed he had underperformed.

The worker, Stephen Mwaura, was dismissed on September 25, 2018, Business Daily reported on Saturday. Court records list the case as Ndungu v The Co-operative Bank of Kenya Ltd, Cause 479 of 2019, with judgment delivered on October 13, 2026, by Justice D.K.N. Marete.

The judge accepted the bank’s reason for letting him go but found it had not told him in advance that termination was being considered, and had not allowed him a representative at the hearing.

“The termination was procedurally deficient in this respect,” the judge said.

A long record of warnings

Mr Mwaura joined the bank as a graduate clerk on September 11, 2008, and worked in its Custodial Services and Facilities Management Division. He moved to another division in 2017 after asking for a transfer in February that year.

He went to court in April 2019, describing his dismissal as unlawful, unfair and discriminatory. He told the court his work in the new role was satisfactory and pointed to his second-quarter 2018 appraisal. He also said two colleagues who had been placed on performance improvement plans were treated better, and that one of them was given extra time and support instead of being dismissed.

He asked for compensation and an injunction to stop the bank from recovering his outstanding staff loans.

The bank told the court its concerns about his performance dated back to 2010. It said it issued several warning letters in 2017 and 2018, put him on a Performance Improvement Plan and invited him to a review meeting.

The court sided with the bank on the substance. “The record discloses a sustained pattern of underperformance. The claimant was cautioned as early as 2010, received multiple warning letters between 2017 and 2018, and was placed on a Performance Improvement Plan. He was allowed to address the concerns at the September 2018 meeting,” the judge said.

Where the bank fell short

The problem was the process. The court found the dismissal did not fully comply with Section 41 of the Employment Act, which the judge said required the bank to explain beforehand that termination was on the table and to give Mr Mwaura the right to a representative.

Most of his other claims failed. The court rejected the discrimination claim because he had not given enough evidence about the circumstances, performance concerns or outcomes involving the two colleagues he named. His overtime and service-pay claims were dismissed after evidence showed he was a member of the bank’s staff pension scheme.

His claim for notice pay also failed because the bank’s evidence that it had paid him one month’s salary in lieu of notice was not challenged. The court declined his demand for 12 months’ compensation and general damages, settling instead on KSh1.1 million for the procedural failure.

Bank wins KSh2.5m counterclaim

The counterclaim is larger than the award. Co-op Bank had filed a KSh2.5 million counterclaim covering four staff loans, as well as laptop, furniture and residential property loans that were still unpaid when he left. The court upheld the counterclaim, finding the amounts were supported by documents and had not been effectively challenged.

Readers looking for their next role in banking and finance can browse current openings on JobInKenya.