KCB slapped Sh16.4 million for flouting employment act

Kenya Commercial Bank (KCB) has been ordered to pay Fredrick Mulwa, a former internal audit Director over Sh16 million for unfair sacking.

According to the Employment Labour Relations Court ruling early today, there was no specific redundancy notice issued to the complainant as stipulated in the Employment Act as the victim was ordered to leave the office the same day he was issued with a termination letter three years ago

The judge found KCB never notified the labour officer of the redundancy until three days before Mulwa was forced out.

Mulwa through his lawyers had argued that he was kicked out of the bank without the approval of the board of directors.

The court heard that on June 13, 2013 the bank’s Chief Executive informed staff that 120 people would lose their jobs in a restructuring process and would have to take a voluntary early retirement package.

The former auditor told the court that seven days after he was kicked out, his position was advertised.

He had sought Sh142 million as compensation for the loss of employment up to the retirement of 60 years.

“In the absence of any credible information on these rather unusual happenings, the court reaches the conclusion that the termination of the claimant’s employment of redundancy was a facade for unlawful termination.”

The bank had told the court Mr Mulwa had been informed that his position was to be scrapped under the reorganization plan and that he had been given adequate notice of redundancy.

This landmark ruling comes at the time when many firms are laying off employees as cost cutting measure to keep up with the tough economy in the country.

Mulwa’s case however puts question to whether firms are following legal procedures while downsizing.

Last month, the bank issued a notice to at least 500 staff asking them to leave voluntarily or be subjected to a review that could see them axed without getting a lucrative severance package.

Other firms that have since axed employees to cut operational costs includes the National Bank of Kenya, Equity Bank, Family Bank, Nation Media Group, Royal Media and recently Radio Africa Group.


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