https://new.kenyalaw.org/akn/ke/judgment/keelrc/2026/1763

Ogendi v Cooperative Bank of Kenya Ltd (Employment and Labour Relations Cause E396 of 2024) [2026] KEELRC 1763 (KLR) (26 June 2026) (Judgment) Neutral citation: [2026] KEELRC 1763 (KLR) Republic of Kenya In the Employment and Labour Relations Court at Nairobi Employment and Labour Relations Cause E396 of 2024 BOM Manani, J June 26, 2026 Between Cynthia Bochaberi Ogendi Claimant and The Cooperative Bank Of Kenya Limited Respondent Judgment Background 1.The Claimant instituted this action to challenge the Respondent’s decision to terminate her contract of service. She alleges that the Respondent engaged her services as a cleaner at its Githurai branch with effect from February 2015 before it re-designated her as a tea girl at its Zimmerman branch. 2.The Claimant alleges that the Respondent is a member of the Kenya Bankers Association (KBA). She asserts that the said association has a Recognition Agreement with the Banking Insurance and Finance Union (BIFU). 3.The Claimant contends that KBA and BIFU negotiated a Collective Bargaining Agreement (CBA) dated 19th August 2021 on behalf of their members who include the Respondent and its uniounisable employees. It is her case that as a unionisable employee of the Respondent, she was covered by the CBA and it complemented her terms and conditions of service whilst she was in the service of the Respondent. 4.The Claimant asserts that although the Respondent engaged her services as aforesaid, it did not issue her with a written contract of service. She avers that this remained the position until her services were terminated on 8th June 2021. 5.The Claimant avers that on 29th May 2021, the Respondent issued her with a letter of show cause accusing her of misconduct and conflict of interest at work. She asserts that she wrote back on 2nd June 2021 to deny the allegations against her. 6.The Claimant avers that the Respondent subsequently wrote to her on 8th June 2021 terminating her services. She avers that although she challenged the aforesaid decision through an appeal letter dated 5th July 2021, the Respondent did not get back to her on the appeal. 7.The Claimant challenges the lawfulness of the Respondent’s decision to terminate her services. She contends that the Respondent did not accord her the opportunity to be heard on the accusations against her in the presence of a colleague or at all. She further asserts that the Respondent did not provide evidence to substantiate the accusations. 8.The Claimant contends that the decision to terminate her services would have been obviated had the Respondent conducted investigations into the matter and conducted a disciplinary hearing. As such, she asserts that the decision was in breach of the law. 9.The Claimant contends that so far as she is concerned, she discharged her duties with utmost diligence and commitment. As such, she contends that the decision to relieve her of her duties was unfair. Consequently, she prays for compensation for unfair termination of her contract. 10.The Claimant also alleges that the Respondent underpaid her in contravention of the CBA dated 19th August 2021 between KBA and BIFU. She contends that although she was entitled to automatic annual salary increment as per clauses A8 and AB12 of the CBA, the Respondent did not make good these increments. As such, she claims the alleged underpayments as set out in the Statement of Claim. She also makes claims for accrued leave, leave allowance and pay in lieu of notice based on clauses A15, A17 and A5 (d) of the aforesaid CBA. 11.The Claimant further alleges that the Respondent did not enroll her in any pension or superannuation scheme during the currency of her employment. She also contends that the Respondent did not enroll her in the National Social Security scheme. Consequently, she claims service pay for the years she was in service. 12.The Respondent has opposed the claim. It filed a Statement of Response dated 11th July 2024. 13.The Respondent denies that the Claimant was its employee. It contends that she was an employee of Abgal Hygiene Limited with whom it (the Respondent) had a cleaning and tea making contract. It further avers that she was posted by Abgal Hygiene Limited to its (the Respondent’s) Zimmerman branch under the aforesaid arrangement to provide the services of a cleaner and tea girl. 14.The Respondent asserts that it used to pay the Claimant’s salary directly not because there was an employment relationship between them but for administrative convenience. It contends that it had agreed with Abgal Hygiene Limited to be remitting the Claimant’s salary directly to her account and the agency fees directly to Abgal Hygiene Limited. 15.The Respondent avers that sometime in 2021, the Claimant engaged in various acts of misconduct. It alleges that she begun preparing and submitting invoices on behalf of a milk supplier and having inappropriate engagements with its customers. 16.The Respondent alleges that because of this misconduct, it issued the Claimant with a letter of show cause. It contends that after the Claimant proffered her response to the show cause letter, it (the Respondent) subjected her to a disciplinary hearing before her services were terminated. It further avers that the decision to terminate the Claimant’s services was communicated to her through its letter dated 8th June 2021. 17.The Respondent contends that the Claimant challenged the aforesaid decision through an appeal. It avers that after considering the appeal, it (the Respondent) found it (the appeal) unmerited and dismissed it. The Respondent further contends that it notified the Claimant about the fate of the appeal. 18.The Respondent asserts that it computed and paid to the Claimant her terminal benefits. Despite this, it (the Respondent) contends that the Claimant still proceeded to institute the instant suit. 19.The Respondent disputes the Claimant’s entitlement to the claims she has made based on the CBA of 19th August 2021 on various grounds. First, it contends that the CBA was signed long after her services had come to a close and cannot therefore be applied retrospectively to confer a benefit on her. Second, it (the Respondent) contends that the CBA cannot, in any event, apply to her as she was not its (the Respondent’s) employee. Third, it (the Respondent) asserts that the Claimant has not tabled evidence to demonstrate that she was a unionisable employee who was eligible to benefit from the CBA. 20.In the alternate, the Respondent contends that if the impugned Recognition Agreement and CBA are applicable to the Claimant’s case, then the court has no jurisdiction over the dispute since the said instruments provide for alternative dispute resolution procedures which she ignored. The Respondent further questions the court’s pecuniary jurisdiction to entertain the suit. Issues for Determination 21.After evaluating the pleadings, evidence and submissions by the parties, the following issues arise for determination:-a.Whether the court is seized of jurisdiction to entertain the case.b.Whether the parties had an employment relationship.c.Whether the CBA between BIFU and KBA dated 19th August 2021 applied to the Claimant.d.Whether the Claimant is entitled to the reliefs which she seek in the action. Analysis and Determination 22.The first issue for determination relates to whether the court has jurisdiction to entertain the case. The Respondent has challenged the court’s jurisdiction to entertain the case on two fronts. First, it contends that the Claimant did not exhaust the available alternative dispute resolution procedures thus depriving the court of jurisdiction to entertain the claim. Second, it contends that the matter falls below the pecuniary jurisdiction of the court. 23.Availability of alternative dispute resolution procedures does not operate to oust the court’s jurisdiction over a dispute. It only postpones the jurisdiction and hence the reality that a suit filed before exhaustion of alternative dispute resolution procedures can only be stayed but not struck out (see rule 56 (5) of the Employment and Labour Relations Court Rules, 2024. As such, the court retains the primary jurisdiction over the dispute (see also the discussion on the subject in Ithagi v Energy & Petroleum Regulatory Authority & another [2024] KEHC 483 (KLR)). 24.If the Respondent to such cause wishes to take advantage of the alternative dispute resolution process, he must apply for referral of the dispute to the alternative dispute resolution forum before the trial commences. He is not entitled to sit through the trial process only to seek to strike out the action on this account at the final judgment stage. Such acquiescence will deprive him of the opportunity to have the action referred to alternative dispute resolution. 25.The other jurisdictional issue which the Respondent raises relates to the court’s pecuniary jurisdiction to entertain the case. Whilst it (the Respondent) appears not to have pursued the objection during the trial or in its final submissions, the issue was flagged in the Statement of Defense. As such and being a jurisdictional question, the court is obligated to address it. 26.The Respondent’s contention in this respect may have been informed by Gazette Notice No. 6024 of 2018 by which disputes arising from employment relationships where the employee’s monthly salary is below Ksh. 80,000.00 are required to be tried by the Magistrate’s Court. Since the Claimant’s salary was below Ksh. 10,000.00, it appears to have been the Respondent’s contention that the matter ought to have been presented to the Magistrate’s Court with the consequence that this court would supposedly have no pecuniary jurisdiction over it. 27.However, such contention would be unsound for the simple reason that the aforesaid Gazette Notice did not take away the court’s primary jurisdiction over any and indeed all employment disputes of a civil nature. The fact that the Magistrate’s Court was gazetted to handle some of these disputes did not take away this court’s jurisdiction over the cases. 28.This reality has been spoken to in a plethora of decisions. For instance, in Wanyonyi & 53 others v CYKA Manpower Services Limited & another [2026] KEELRC 99 (KLR), the court observed on the matter as follows:-‘’Notwithstanding the pecuniary limits set out under Gazette Notice No. 6024 of 2018, the Employment and Labour Relations Court retains exclusive original jurisdiction to hear and determine all disputes relating to employment and labour relations pursuant to Article 162(2)(a) of the Constitution. Consequently, it cannot be said that this Court is bereft of jurisdiction to hear and determine the suit herein.’’ 29.From the totality of the foregoing, it follows that the Respondent’s objection to the court’s jurisdiction to hear the case on the aforesaid grounds is devoid of merit. Accordingly, the objection is disallowed. 30.The next issue for determination relates to whether the parties to the dispute had an employment relationship. The parties took contrasting positions on the matter. Whilst the Claimant averred that she was an employee of the Respondent, the Respondent disputed this fact and asserted that she was an employee of an outsourcing company known as Abgal Hygiene Ltd. 31.During the trial, the Claimant stated that she was initially employed by Abgal Hygiene Ltd and seconded to the Respondent to provide cleaning services. However, she contended that the Respondent subsequently engaged her directly to serve as a cleaner and a tea girl. 32.The court has evaluated the evidence on record on the matter. It is apparent that the parties did not tender the contracts of engagement to support their contrasting positions on the matter. 33.The outsourcing contract between the Respondent and Abgal Hygiene Ltd was not entered in evidence to illuminate the terms under which the Claimant’s services were outsourced. Similarly, although the Respondent alleges that it used to pay Abgal Hygiene Ltd the contract/agency fees which allowed the latter to outsource the Claimant to the Respondent, it (the Respondent) did not provide proof of these payments to affirm its contention that the outsourcing contract was still in place at the time the Claimant’s services were terminated. 34.On the other hand, although the Claimant averred that the Respondent subsequently engaged her services directly, no written contract between the two (the Claimant and Respondent) was tendered in evidence to speak to this transition. As such, if the transition occurred, it was done informally. 35.That said, under the law on outsourcing of employment services, workers who are outsourced remain employees of the outsourcing company and not the consumer of the labour service during the currency of the outsourcing agreement. This is the position that was expressed in the case of Abyssinia Iron & Steel Limited v Kenya Engineering Workers Union [2016] KECA 510 (KLR). 36.Because the outsourcing company is deemed as the employer of the outsourced worker, it enjoys and exercises managerial prerogative over him in the same manner an employer does in respect of his/her employees. As such, absent express arrangements to the contrary, it is expected that the outsourcing company and not the consumer of the services of the worker will exercise disciplinary control over him. 37.In the case before court, it is apparent that although the Claimant was initially outsourced to the Respondent, the latter assumed managerial prerogative over her at some point in time. This is evident from the fact that the Respondent exerted disciplinary control over her by subjecting her to the disciplinary process which resulted in the termination of her services. 38.Absent cogent evidence to demonstrate that Abgal Hygiene Ltd had ceded disciplinary control over the Claimant to the Respondent under the outsourcing agreement, the Respondent could only exercise this prerogative over her in its (the Respondent’s) capacity as her employer. No evidence was presented to court to suggest that Abgal Hygiene Ltd had yielded this mandate to the Respondent during the currency of the outsourcing contract. 39.The fact that the Respondent was able to exercise disciplinary control over the Claimant and terminate her contract is consistent with the Claimant’s assertion that she was its employee. This gives credence to her contention that at some point in time, the Respondent engaged her services directly thereby assuming the role of her employer in place of Abgal Hygiene Ltd. 40.The fact that the Respondent subsequently engaged the Claimant’s services as an employee is also supported by other pieces of evidence on record. For example, in its (the Respondent’s) notice to show cause letter to the Claimant, it (the Respondent) describes her as ‘’our subordinate staff’’ implying that the two had an employment relationship. 41.In the letter terminating the Claimant’s services, the Respondent asserts thus, ‘’the bank has decided to terminate your employment with immediate effect in accordance with the terms and conditions of your employment contract and shall pay you one (1) month’s salary in lieu of notice’’. This implies that the two had an employment relationship which the Respondent was terminating. 42.The degree of control test is one of the tests which is applied to establish whether an employment relationship exists. The test requires the court to examine the degree of control the consumer of the labour service exerts over the supplier of the service (see Ready mixed Concrete –vs- Ministry of Pensions (1968) 2 QB 497). The more control the consumer of the labour service exerts on the supplier, the more likely it is that the two have an employment relationship. 43.In order to decipher the amount of control which the consumer of the labour service exerts over the supplier of the service, the court is required to consider various factors. These include: the extent to which the consumer of the service determines the manner of and place for delivery of the service; whether the consumer of the service is responsible for provision of the tools of work; and whether the consumer of the service has the prerogative to exercise disciplinary control over the worker. 44.In the case before court, it is apparent that the Respondent exerted considerable control over the Claimant. For instance, it enjoyed the prerogative to take disciplinary action against her including terminating her services. 45.The above evidence leaves no doubt that although the Claimant was initially outsourced by Abgal Hygiene Ltd to the Respondent, she was subsequently engaged directly by the Respondent thereby establishing an employment relationship between them. It is so declared. 46.The next question for determination is whether the CBA dated 19th August 2021 between BIFU and KBA applied to the Claimant. The Claimant has anchored a number of her claims on the aforesaid CBA. She alleges that the Respondent failed to honour various clauses in the CBA thus causing her to suffer underpayments relating to: salary and house allowance; and accrued leave and leave allowance. 47.The Respondent disputes this assertion. It contends that the aforesaid CBA came into force after the Claimant’s services had been terminated. As such, it contends that the CBA could not operate retrospectively to confer a benefit on her. 48.The Respondent alternately contends that there is no evidence to demonstrate that the Claimant was either a member of BIFU or was an eligible unionisable employee to entitle her to lay claim over the impugned benefits. As such, it contends that the claims pegged on the CBA are misguided. 49.The court has looked at the CBA in question. It is apparent that it was concluded on 19th August 2021. On the other hand, the Claimant’s services were terminated on 8th June 2021, approximately two months before the CBA came into force. As such, it is correct as the Respondent contends that at the time the CBA came into force, there was no employment relationship between the parties to the action. 50.It is true that clause A2 of the CBA states that the instrument was to have effect from 1st March 2021. It is also true that the agreement mentions that house allowance was to be computed in terms of Appendix B of the instrument and backdated to 1st April 1980. 51.However, the court holds the view that these benefits only accrued to persons who were serving as employees of the Respondent at the time the CBA was signed on 19th August 2021. It will be absurd to contend that the benefits were to also accrue to former employees. 52.If the contrary were to have been the intention of the drafters of the CBA, it will mean that all former employees who left the Respondent’s employment after 1st April 1980 would be entitled to claim the benefits. The financial ramifications of such a proposition would be unimaginable. 53.But even if it were to be considered that former employees are entitled to claim the benefits under the CBA, the benefits would only accrue to former employees who were either active members of BIFU after 1st April 1980 or those who, though not active members of BIFU, were eligible unionisable employees. Under section 48 (1) of the Labour Relations Act, one can only claim to be a member of a trade union if he has evidence of remittance of trade union dues to the trade union. The Claimant did not provide such evidence. As such, she cannot claim the benefits under the impugned CBA on account of alleged union membership with BIFU. 54.Section 49 of the Labour Relations Act recognizes that a unionisable employee who is not a member of a trade union may nevertheless benefit from a CBA which has been negotiated by the trade union. However, for this to happen, the employee must pay agency fees to the trade union. 55.There is no evidence that the Claimant was remitting agency fees to BIFU. In any event, the impugned CBA on which she anchors her claims was not in force during her employment to have entitled her to pay agency fees on the basis thereof so that she can claim a benefit from it. As such, she cannot claim a benefit from the CBA. 56.Importantly, during trial, the Claimant conceded that the impugned CBA did not apply to her because it was concluded after she had left employment. As such, she admitted that it was improper for her to base her claims on the instrument. She expressed herself on the matter as follows:-‘’The CBA was signed after I had left employment. It is true I cannot rely on it to say it was to guide what I was to be paid. The CBA was not in force when I was an employee of the Respondent and I cannot rely on it.’’ 57.The foresaid being the case, the Claimant’s claims for: underpayment of salary and house allowance; and accrued leave and leave allowance which are premised on the impugned CBA are unmerited. As such, they all fail. 58.The Claimant also alleges that the Respondent unfairly terminated her services. She contends that the Respondent had no legitimate grounds to terminate her contract. She further alleges that she was denied an opportunity to be heard before her services were terminated and that the Respondent did not attend to her appeal. 59.On the other hand, the Respondent contends that it had legitimate reasons to terminate the Claimant’s services. It contends that the Claimant engaged in activities which bordered on conflict of interest when she begun preparing and submitting invoices for a milk supplier. It further contends that she conducted herself in an inappropriate manner while dealing with some of its customers and also disregarded its dress code. 60.Contrary to the Claimant’s contention that the Respondent had no valid reasons to terminate her services, the Respondent tendered in evidence a notice to show cause letter which set out various grounds which informed the decision to terminate her services. The Respondent also provided evidence to speak to the fact that it conducted a disciplinary hearing during which the Claimant was confronted with the various accusations against her. 61.According to the minutes of the disciplinary hearing, the Claimant conceded that she had made mistakes and asked to be pardoned. The minutes bear her signature to confirm that they are a true representation of what transpired at the disciplinary hearing. 62.The Claimant having admitted her mistakes before the Disciplinary Panel cannot now assert that the Respondent did not have justifiable grounds to terminate her services. It will be absurd if the court were to countenance such an about-turn. 63.The law does not obligate an employer to have infallible evidence to establish the grounds for termination of a contract of service before he can terminate an employee’s services. All that he (the employer) is required to demonstrate is that he had genuine reason to believe that the employee had committed the infraction under inquiry (seeKenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others [2019] eKLR). 64.Section 43 of the Employment Act also speaks to the foresaid as follows:-‘’The reason or reasons for termination of a contract are the matters that the employer at the time of termination of the contract genuinely believed to exist, and which caused the employer to terminate the services of the employee.’’ Emphasis added by underlining. 65.Thus, the moment the Claimant admitted her mistakes before the Disciplinary Panel and asked to be pardoned, this stirred a genuine belief in the Respondent that she was guilty of the infractions which she had been accused of. This gave the Respondent a valid ground to consider terminating her services. As such, the court has no basis upon which to hold otherwise. 66.As regards whether there was procedural fairness, there is evidence that the Respondent issued the Claimant with a notice to show cause setting out the accusations against her. There is evidence that she was given an opportunity to respond to the show cause. There is evidence that the Respondent convened a disciplinary session at which the Claimant was accorded a chance to be heard. 67.The record shows that the Claimant challenged the decision to terminate her services on appeal. Although the Respondent asserts that it considered and dismissed the appeal, no evidence was tendered to affirm this assertion. 68.No minutes of the meeting where the appeal was purportedly considered were tendered in evidence. Similarly, no letter purporting to communicate the Respondent’s decision on the Claimant’s appeal was tendered in evidence. 69.Section 45 (4) of the Employment Act provides as follows:-‘’A termination of employment shall be unfair for the purposes of this Part where:-a.The termination is for one of the reasons specified in section 46; orb.It is found out that in all the circumstances of the case, the employer did not act in accordance with justice and equity in terminating the employment of the employee.’’ 70.Section 45 (5) of the Act provides as follows:-‘’ In deciding whether it was just and equitable for an employer to terminate the employment of an employee, for the purposes of this section, a labour officer, or the Industrial Court shall consider:-a.the procedure adopted by the employer in reaching the decision to dismiss the employee, the communication of that decision to the employee and the handling of any appeal against the decision;b.the conduct and capability of the employee up to the date of termination;c.the extent to which the employer has complied with any statutory requirements connected with the termination, including the issuing of a certificate under section 51 and the procedural requirements set out in section 41;d.the previous practice of the employer in dealing with the type of circumstances which led to the termination; ande.the existence of any pervious warning letters issued to the employee.’’ 71.From the foregoing, it is apparent that although the employer may have legitimate grounds to terminate an employee’s services, the manner in which he (the employer) handles the employee’s appeal against the decision can affect the legitimacy of the process. In this case, the court is not satisfied from the evidence on record that the Respondent handled the Claimant’s appeal in accordance with the dictates of justice and equity. It is for this reason that the Respondent’s decision is censured. 72.In the premises, the court finds that although the Respondent had legitimate reasons to consider terminating the Claimant’s services, it (the Respondent) failed to adhere to due process in processing her appeal. As such, the decision to terminate her services is declared flawed on this ground. 73.The Respondent’s decision to terminate the Claimant’s services having been impugned on procedural grounds, she is entitled to compensation for unfair termination of her services. In determining the quantum of compensation to award, the court is obligated to consider various factors which are set out under section 49 of the Employment Act. These include: the length of the employee’s service; and whether the employee’s conduct contributed to the decision to terminate her services. 74.In this case, it is evident that the Claimant had been in the Respondent’s service for some while. It is also apparent that her conduct greatly contributed to the decision to terminate her services. 75.Taking these factors into account, the court awards the Claimant compensation for unfair termination of her contract which is equivalent to her salary for three months. 76.According to the evidence on record, the Claimant’s monthly salary was Ksh. 9,000.00. As such, she is awarded Ksh. 27,000.00 as compensation for unfair termination of her contract. 77.The Claimant has further prayed for pay in lieu of notice. However, the claim is declined since there is evidence which shows that she was paid salary for one month in lieu of notice to terminate her services. 78.The Claimant has also claimed for service pay for the duration that she served the Respondent. As pointed out earlier, although there is evidence that the relationship between parties transited from an outsourcing arrangement to a direct employment relationship, the exact time when this transition took place is unclear due to paucity of evidence on the matter. As such, the court cannot state with exactitude the period in respect of which the Claimant is entitled to claim service pay. 79.That said, the Respondent tendered in evidence a document dated 9th June 2021 which contains computation of the Claimant’s service pay. According to the document, the Claimant was paid service pay for four years at the rate of half month salary for every year worked. As a matter of fact, the Claimant acknowledges this fact. 80.It would appear that the amount which the Claimant claims as additional service pay is based on the difference between her actual salary and what she claims she was entitled to under the impugned CBA. However and as was pointed out earlier, she is not entitled to claim benefits based on the CBA. As such, the claim for enhanced service pay fails for this reason. 81.The court awards the Claimant interest on the amount awarded at court rates from the date of this judgment. 82.Section 27 of the Civil Procedure Act provides that in considering the issue of costs, the court should be guided by the principle that costs follow the event. In effect, the party who has succeeded on a claim should be granted costs of the suit unless there are compelling reasons to order otherwise. 83.In the instant case, the Claimant is generally the successful party. As such, the court hereby awards her costs of the suit. Summary of the Findings and Orders 84.After considering the pleadings, evidence, submissions by the parties and the applicable law, the court makes the following findings and attendant orders:-a.The court finds that it has jurisdiction to entertain the claim.b.The court finds and declares that the parties to the action had an employment relationship at the time the Claimant’s contract of service was terminated.c.The court finds and declares that the Claimant is not entitled to the claims she has made in the suit based on the CBA dated 19th August 2021. As such, the claims to wit: underpayment of salary and house allowance; accrued leave days and leave allowance; and additional service pay are declined.d.The court finds and declares that the Respondent’s decision to terminate the Claimant’s contract of service was vitiated by procedural flaws.e.Accordingly, the court awards the Claimant compensation for unfair termination of her contract in the sum of Ksh. 27,000.00.f.The amount awarded to the Claimant attracts interest at court rates from the date of this decision.g.The court awards the Claimant costs of the case. DATED, SIGNED AND DELIVERED ON THE 26TH DAY OF JUNE, 2026B. 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.