The conduct of an employer, of hiring a private investigate to look into an employee’s private life, infringed on the employee’s right to privacy.
Headnote: one of the glaring contested issues was whether an employer could hire a private investigator to look into the private life of an employee. The court held that the conduct of the respondent leading into the investigations of the claimant’s private life in the context of matters ongoing at the workplace was not justified. No basis was given for such conduct. Engaging in private investigations and then failing to bring such matters to the claimant to address as an employee was not justified. His constitutional rights under Article 31 were breached by the respondent.
Mwangi v ABSA Bank Kenya PLC (Cause E065 of 2023) [2024] KEELRC 2399 (KLR) (1 October 2024) (Judgment)
Neutral citation: [2024] KEELRC 2399 (KLR)
Employment and Labour Relations Court at Mombasa
M Mbarũ, J
October 1, 2024
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Employment Law – employer-employee relationship – termination of employment – grounds for termination of employment – claim that employee’s actions amounted to lapse in fiduciary duty and conflict of interest – whether the termination of an employee on grounds that employee’s actions amounted to lapse in fiduciary duty and conflict of interest, was proper and justified – Employment Act (Cap 226), sections 35, 41, 43 and 45
Constitutional Law – fundamental rights and freedoms – the right to privacy – the right to privacy of a person during investigation – collection of personal data unrelated and information unrelated to an employee’s employment – where an employer hired a private investigator to collect personal data and information of an employee – whether the conduct of an employer that led to the investigation of the claimant’s private life in the context of matters ongoing at the workplace was justified – whether an employer could hire a private investigator to look into the private life of an employee – Constitution of Kenya, article 31
Jurisdiction – jurisdiction of the employment and labour relations court – jurisdiction to determine an issue of defamation arising within a claim for wrongful termination – claim that a claim for defamation was not within the jurisdiction of the Employment and Labour Relations Court – whether the Employment and Labour relations court had jurisdiction to determine a claim for defamation, arising in a suit on wrongful termination.
Brief Facts
The respondent bank employed the claimant as a branch manager and then promoted him to a senior branch manager. On March 17, 2023, the claimant was issued with a notice of suspension. The suspension was because the claimant was involved in irregular unauthorized overdraft facilities advanced to some customers at the Nkrumah Road branch. Disciplinary proceedings commenced and upon conclusion, the claimant was issued with a letter of termination. The claimant was allowed a right of appeal.
The claim was that before the claimant’s appeal could proceed for hearing, the respondent advertised for his position meaning that there was a premeditated position that he would not be successful. That resulted in unfair and unlawful termination of employment contrary to Sections 41, 43 and 44 of the Employment Act. The claim was that the claimant’s employment was terminated on grounds of nepotism and a witch hunt against him for raising questions touching on three senior employees who castigated and victimized him as per his email to the CEO. During the claimant’s suspension, the respondent engaged a private investigator into his personal and private conduct and followed him in public, restaurants and pubs and also demanded to be supplied by different establishments with information in violation of his rights. That was contrary to the Constitution and the Employment Act; and had placed the claimant in public ridicule from reports circulated to the claimant’s subordinates and the general public.
According to the claimant, while the claimant was the senior branch manager at Nkrumah Road, the branch realized a net profit of Ksh.1.2 billion for the year 2022 and owing to the said realized profits, he was entitled to a performance bonus of Ksh.2.3 million which the respondent deliberately failed to pay and instead levelled malicious accusations in an attempt to avoid paying the bonus. The claim was that the claimant worked for the respondent while earning a salary of Ksh.572, 760 per month which was to be increased to Ksh.647, 218 (13% increment) from January 2023. The respondent declined to effect the said increment and the same should be awarded. The claimant stated that the termination of employment was without due process, the respondent has refused to pay terminal dues and the claimant was seeking the following; damages for defamation Ksh.5,000,000; damages for character assassination Ksh.5,000,000; unpaid bonuses for the year 2022 ksh.2,300,000; 12 months compensation Ksh.7,766,625.60; Notice pay Ksh.647,218; Unpaid salary increments at 13% from January 2023 to May 2023 Ksh.373,294; Certificate of service; and costs.
Issues
Mwangi v ABSA Bank Kenya PLC (Cause E065 of 2023) [2024] KEELRC 2399 (KLR) (1 October 2024) (Judgment)
Neutral citation: [2024] KEELRC 2399 (KLR)
Employment and Labour Relations Court at Mombasa
M Mbarũ, J
October 1, 2024
Download the Decision
Employment Law – employer-employee relationship – termination of employment – grounds for termination of employment – claim that employee’s actions amounted to lapse in fiduciary duty and conflict of interest – whether the termination of an employee on grounds that employee’s actions amounted to lapse in fiduciary duty and conflict of interest, was proper and justified – Employment Act (Cap 226), sections 35, 41, 43 and 45
Constitutional Law – fundamental rights and freedoms – the right to privacy – the right to privacy of a person during investigation – collection of personal data unrelated and information unrelated to an employee’s employment – where an employer hired a private investigator to collect personal data and information of an employee – whether the conduct of an employer that led to the investigation of the claimant’s private life in the context of matters ongoing at the workplace was justified – whether an employer could hire a private investigator to look into the private life of an employee – Constitution of Kenya, article 31
Jurisdiction – jurisdiction of the employment and labour relations court – jurisdiction to determine an issue of defamation arising within a claim for wrongful termination – claim that a claim for defamation was not within the jurisdiction of the Employment and Labour Relations Court – whether the Employment and Labour relations court had jurisdiction to determine a claim for defamation, arising in a suit on wrongful termination.
Brief Facts
The respondent bank employed the claimant as a branch manager and then promoted him to a senior branch manager. On March 17, 2023, the claimant was issued with a notice of suspension. The suspension was because the claimant was involved in irregular unauthorized overdraft facilities advanced to some customers at the Nkrumah Road branch. Disciplinary proceedings commenced and upon conclusion, the claimant was issued with a letter of termination. The claimant was allowed a right of appeal.
The claim was that before the claimant’s appeal could proceed for hearing, the respondent advertised for his position meaning that there was a premeditated position that he would not be successful. That resulted in unfair and unlawful termination of employment contrary to Sections 41, 43 and 44 of the Employment Act. The claim was that the claimant’s employment was terminated on grounds of nepotism and a witch hunt against him for raising questions touching on three senior employees who castigated and victimized him as per his email to the CEO. During the claimant’s suspension, the respondent engaged a private investigator into his personal and private conduct and followed him in public, restaurants and pubs and also demanded to be supplied by different establishments with information in violation of his rights. That was contrary to the Constitution and the Employment Act; and had placed the claimant in public ridicule from reports circulated to the claimant’s subordinates and the general public.
According to the claimant, while the claimant was the senior branch manager at Nkrumah Road, the branch realized a net profit of Ksh.1.2 billion for the year 2022 and owing to the said realized profits, he was entitled to a performance bonus of Ksh.2.3 million which the respondent deliberately failed to pay and instead levelled malicious accusations in an attempt to avoid paying the bonus. The claim was that the claimant worked for the respondent while earning a salary of Ksh.572, 760 per month which was to be increased to Ksh.647, 218 (13% increment) from January 2023. The respondent declined to effect the said increment and the same should be awarded. The claimant stated that the termination of employment was without due process, the respondent has refused to pay terminal dues and the claimant was seeking the following; damages for defamation Ksh.5,000,000; damages for character assassination Ksh.5,000,000; unpaid bonuses for the year 2022 ksh.2,300,000; 12 months compensation Ksh.7,766,625.60; Notice pay Ksh.647,218; Unpaid salary increments at 13% from January 2023 to May 2023 Ksh.373,294; Certificate of service; and costs.
Issues
- Whether the termination process followed by the employer was flawed hence constitution wrongful/unlawful termination
- Whether the Employment and Labour relations court had jurisdiction to determine a claim for defamation, arising in a suit on wrongful termination
- Whether an employer could hire a private investigator to look into the private life of an employee
- Whether an employee was entitled to bonus that accrued and were awarded to him, for good performance, before the disciplinary proceedings were initiated.
- Whether an employee undergoing disciplinary proceedings was entitled to a salary increment awarded to all employees as part of implementation of the employer’s Policy.
Held:
- Termination of employment was allowed under the provisions of sections 35, 41, 43 and 45 where the employer issued notice upon the employee noting misconduct on the grounds of poor work performance, incapacity or capability. Upon the notice, the employee must be allowed time to the respondent and attend to make his representations.
- The banking sector was sensitive and highly regulated through its policies and the Central Bank of Kenya. Breach of fiduciary duty extended to third party and the conduct of the claimant justified the sanction taken and termination of employment. Similarly, certain positions such as a branch manager of a bank, attract a high calling of integrity and financial probity. Once held, great responsibility and accountability was called for. As the branch manager, of the Nkrumah Road branch, Mombasa, the claimant had bigger accountability beyond what his junior staff held.
- The respondent bank was finance-sensitive and the position held by the claimant as branch manager was similar to that of a financial custodian and other valuables. Conflict of interest and lapse in the fiduciary duty bestowed on him was capable of affecting the financial position of the respondent and such breach and violation was capable of initiating fraudulent transactions.
- The claimant was called to account for his conduct and his responses were found unsatisfactory. He admitted to buying a housing unit from a customer without a proper sale agreement which was in conflict of interest and to failing to address irregularities concerning the allocation of excesses within his branch which was in breach of the lending procedures. The claimant was invited to a disciplinary hearing and failed to explain his conduct and hence found culpable of misconduct leading to termination of employment. The termination of employment was justified and the claimant was taken through due process.
- In Employment Law defamation took place when the Employer publicizes or causes to be publicized, statements which stigmatize the employee. The manner of dismissal and the negative publicity attached to the petitioner had the potential to damage his employability. In employment-related, defamation was based on the old tort of defamation but with a new spin: the employee’s injured or damaged employability and not merely the personal stigmatization must be compensated.
- Breach of privacy was contrary to Article 31 of the Constitution. Even in employment, protection of the employee privacy was imperative. Where there was a breach of an employee's privacy, an employer could not justify a position that the court lacked jurisdiction and then fail to address whether there was a need to collect personal data and information unrelated to the employment.
- Protecting privacy was necessary if an individual was to lead an autonomous, independent life, enjoy mental happiness, develop a variety of diverse interpersonal relationships, formulate unique ideas, opinions, beliefs and ways of living and participate in a democratic, pluralistic society. The importance of privacy to the individual and society certainly justifies the conclusion that it was a fundamental social value, and should be vigorously protected in law. Each intrusion upon private life was demeaning not only to the dignity and spirit of the individual but also to the integrity of the society of which the individual is part.
- The conduct of the respondent leading into the investigations of the claimant’s private life in the context of matters ongoing at the workplace was not justified. No basis was given for such conduct. The claimant was a senior employee of the respondent and whatever conduct he engaged in after office/work hours, where that was found contrary to his letter of appointment and workplace policy, recourse was to invite him to address. Engaging in private investigations and then failing to bring such matters to the claimant to address as an employee was not justified. His constitutional rights under Article 31 were breached by the respondent.
- In employment and labour relations, damages could be awarded to an employee under the provisions of Section 12 of the Employment and Labour Relations Court Act. The demands of social justice must be weighed carefully, against the needs of economic development. Ultimately, the purpose of compensatory awards was not to punish errant employers, however egregious their decisions against their employees be; the objective was to ensure economic injury suffered by the employee, was adequately redressed.
- The claimant had served the respondent well until matters were brought to his attention through notice to show cause dated March 17, 2023. Internal investigations conducted revealed various breaches but that did not justify a violation of his privacy rights secured under Article 31 of the Constitution. The facts weighed and similar case law addressed, general damages claimed at ksh.5, 000,000 was justified.
- The policies applied by the respondent must protect both parties equally. On the one part, the subject policy required that upon the close of year, each employee enjoying a bonus for good performance should receive communication from the Regional Manager which the claimant received, stating that following his excellent performance, he had earned a bonus. That was related to the year 2022 way before disciplinary proceedings were brought to the claimant’s attention. The announced bonus could not be negated after the fact of its communication. Disciplinary procedures were only initiated against the claimant through the notice to show cause dated March 17, 2023. Going back to sanction him and deny him a benefit accrued backwards and relating to his performance in the year 2022 was to engage in unfair labour practices. The claimant was entitled to the claim of Ksh.2, 300,000 in unpaid bonuses for the year 2022.
- On the claim for salary increments at 13% from January 2023 to May 2023, the discretion not to award such payment upon the respondent was removed the moment a policy was issued that was known to all employees that such percentages were due. From March to May 2023 during the disciplinary process, the claimant was not in control of his employment. The time taken to address the workplace misconduct should not deny him the due benefits while employment subsisted. Submissions by the respondent that the salary increase was purely discretionary vis-a-vis the records and policies placed before the court were not correct.
- Employment rights can be secured contractually, through workplace policies and practices and agreements. The claim of a 13% salary increase from January to May 2023 was justified at Ksh.647, 218. On the Certificate of Service, best practice demanded that the employee should be cleared and the same issued under the provisions of Section 51 of the Employment Act.
Claim allowed.
Orders
Orders
- A declaration that there was a violation of constitutional rights;
- General damages Ksh.5,000,000;
- Unpaid bonuses for the year 2022 ksh.2,300,000;
- Notice pay Ksh.647,218;
- Unpaid salary increments at 13% from January 2023 to May 2023 Ksh.373,294;
- The claimant to complete clearance for issuance with a Certificate of Service;
- Each party bears its costs.