The Employment and Labour Relations Court has upheld the dismissal of a CFC Stanbic Bank employee who authorised a fraudulent transaction worth Sh6.1 million but criticised the bank for conducting an unfair disciplinary process.
The court ruled that Stanbic Bank had valid and fair grounds to summarily dismiss Anthony Maina, a former team leader in customer service, after he approved a high-value cash transaction without following mandatory procedures.
However, the judge found procedural flaws in the disciplinary process, particularly the insufficient time given to Mr Maina to prepare for his hearing. The court declared that the employee’s termination was unlawful on account of the procedure.
"The respondent has demonstrated valid and fair reasons for the summary dismissal under Section 43 of the Employment Act," the court stated, emphasising that Mr Maina’s negligence was "sufficiently serious to justify disciplinary action and subsequent dismissal."
Mr Maina had sued the bank in 2017, seeking declarations that his termination was unlawful and that he was not involved in the loss of funds linked to a 2014 criminal case.
He also demanded 12 months’ salary compensation, unpaid leave, and legal costs.
The dispute stemmed from a transaction on May 8, 2014, when Mr Maina authorised the purchase and payout of $70,000 (approximately Sh6.1 million at the time) to a customer at Stanbic Bank’s Digo Road branch in Mombasa. The funds had been credited from the bank’s Waiyaki Way branch in Nairobi and were later discovered to be part of a fraudulent scheme.
Evidence presented in court revealed that Mr Maina approved the transaction and released the cash at around 9:30am, but only recorded the authorisation in the bank’s system at 4:30pm—several hours later.
The court heard that he failed to conduct proper due diligence, review the account history or comply with anti-money laundering checks, thereby exposing the bank to financial loss.
"The claimant deliberately and willfully disregarded Anti-Money Laundering Guidelines and ignored established payment procedures," the bank’s legal representative argued.
Mr Maina was suspended the following day and summoned to a disciplinary hearing in Nairobi.
He was dismissed on June 30, 2014, after the bank stated it had lost confidence in him. His internal appeal was later rejected.
During the court proceedings, Mr Maina argued that the fraud originated in Nairobi and that another employee faced criminal charges. He maintained that his dismissal was unjust since he was merely a witness in the criminal case and not formally charged.
"An acquittal or charging of another individual does not negate misconduct in employment," the court ruled.
His claim for unpaid leave was dismissed after he conceded that his terminal dues had been settled.
However, the court criticized the bank’s procedural shortcomings. Mr Maina received notice of his disciplinary hearing on May 14, 2014, for a session scheduled just two days later in Nairobi, despite being stationed in Mombasa.
"In my considered view, the time allotted for the claimant to prepare and attend the hearing was unreasonable," Justice Baari stated, citing the logistical challenges of travel and defense preparation.
While unsigned disciplinary minutes and the panel’s composition did not invalidate the process, the inadequate notice rendered the dismissal procedurally unfair under Section 41 of the Employment Act.
Consequently, the court declined to reinstate Mr Maina or absolve him of involvement in the loss. Instead, it awarded him limited compensation. Although he had sought 12 months’ salary, the court reduced the award to three months’ pay—amounting to Sh300,000—citing his contributory negligence.
"The court affirms that the claimant’s dismissal was based on valid, fair, and justified reasons, and he indeed contributed to his own termination," the court concluded.
