https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1054

Wells Fargo Ltd v Karanja & 12 others (Civil Appeal 579 of 2019) [2026] KECA 1054 (KLR) (29 May 2026) (Judgment) Neutral citation: [2026] KECA 1054 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal 579 of 2019 SG Kairu, P Nyamweya & AO Muchelule, JJA May 29, 2026 Between Wells Fargo Limited Appellant and Symon Migwi Karanja 1st Respondent Stanley Mutua Mbirithi 2nd Respondent William Mugo Maina 3rd Respondent Bonface Kabucho Kamau 4th Respondent Bernard Rotich Kipsang 5th Respondent Paul Livingstone Ngaba 6th Respondent John Gituku Muchiri 7th Respondent Solomon Kimutai Chelanga 8th Respondent Richard Oramisi Kichwanga 9th Respondent Albert Sungu Amtala 10th Respondent Paul Macharia Kirugumi 11th Respondent Kennedy Kiviti 12th Respondent Peter Thuo Mburu 13th Respondent (An appeal against the judgment and decree of the Employment and Labour Court at Nairobi (B. Ongaya, J.) dated 20th July 2018 In. ELRC Cause No. 388 of 2014 Consolidated with causes Nos. 379, 380, 381, 382, 383, 384, 385, 386, 387, 389, 390 and 535 of 2014 Cause 388, 379,380,381,382,383, 384,385, 386,387, 389, 390 & 535 of 2014 ) Judgment 1.In Cause No. 388 of 2014, vide the memorandum of claim dated 5th March 2014, filed in the Employment and Relations Court in Nairobi, Symon Migwi Karanja (the 1st respondent herein) averred that on 28th January 2009, Wells Fargo Limited (the appellant herein) engaged him as an ATM Officer at an initial monthly salary of Kshs.30,000. He further stated that he was promoted on 31st August 2009 to the position of Cash Officer, earning a monthly salary of Kshs.43,000. 2.He alleged that on 5th December 2013, he and other employees reported to work at 6:00 a.m. to meet the Director and were required to show cause why their services should not be terminated. Thereafter, on 6th December 2013, they were informed that their employment had been terminated, and that they were not entitled to final dues, severance pay, or any other terminal benefits. The 1st respondent further contended that prior to the termination, he and his colleagues had raised welfare concerns with management. He maintained that no notice of termination was issued and that no payment in lieu of notice was made. 3.According to him, the appellant breached the employment contract by, inter alia, failing to issue reasonable notice prior to termination; failing to pay salary in lieu of notice; failing to settle outstanding wages and leave/vacation pay; failing to pay severance benefits; and withholding other terminal dues, including benefits and bonuses arising from termination. He further asserted that there was no just cause for the termination of his employment. 4.He therefore sought judgment, inter alia, for a declaration that his dismissal was wrongful and unfair; unpaid dues amounting to Kshs.2,729,726/=; one month’s salary in lieu of notice of Kshs.43,000/=; compensation equivalent to 12 months’ salary for wrongful and unfair termination amounting to Kshs.516,000/=; punitive and aggravated damages for alleged breach of his constitutional rights; and costs of the suit. 5.Vide the memorandum of reply dated 31st March 2014, the appellant admitted that the 1st respondent was engaged as an ATM Cash Officer on 28th January 2009, but denied that his advancement was based on outstanding performance. It was contended that, if any welfare concerns existed, the 1st respondent was aware of the proper internal communication channels but failed to utilise them. 6.The appellant further averred that on 5th December 2013, the 1st respondent, together with 15 other cash officers, reported to work but refused to take instructions or perform their duties. Given their critical role in operating ATMs and controlling sensitive passwords and combinations, their refusal allegedly threatened to paralyse that segment of the appellant’s operations. It was asserted that the employees exploited their positions to sabotage operations, despite requests to resume duty or release the access credentials, and that the purported strike on welfare grounds was unjustified. 7.The appellant maintained that the 1st respondent’s conduct amounted to gross misconduct, warranting summary dismissal without notice or payment in lieu thereof. It further alleged that he incited his colleagues to abscond from duty, thereby exposing the appellant to substantial financial risk, estimated at approximately half a billion shillings. It was thus contended that, following a disciplinary process, the appellant lawfully summarily dismissed the 1st respondent. 8.By consent, the 1st respondent’s claim was consolidated with Causes Nos. 379, 380, 381, 382, 383, 384, 385, 386, 387, 389, 390, and 535 of 2014. It was further agreed that the issues for determination were whether the dismissals were unfair and whether the respondents were entitled to overtime pay, house allowance, and compensation as prayed. The parties also agreed that one respondent would testify on behalf of the others and that the documents filed by the parties would be admitted in evidence. 9.During the trial, the 1st respondent testified that, as cash officers, the respondents routinely worked long hours, often until about 10:00 p.m., loading ATMs, which exposed them to risk when walking home, despite having requested transport. He stated that they were required to report to work at 6:00 a.m. On the material day, they asked the Assistant Director to facilitate a meeting with the Director to address previously raised grievances. The Assistant Director instead referred the matter to the Banking Support Manager, who allegedly threatened them and directed them to the Human Resource Manager. The HR Manager then demanded the ATM combinations, which they declined to provide, citing the absence of a proper handover procedure due to concerns over theft. 10.As a result of their refusal, the respondents were detained by the police and later issued with show cause letters. The 1st respondent complained that the ensuing disciplinary process was rushed, with each respondent being heard for only 3 to 4 minutes. On 6th December 2013, they were issued with dismissal letters citing illegal work stoppage, failure to follow established grievance procedures, and incitement of ATM officers not to hand over ATM combinations. He further testified that they appealed against the dismissal but received no response. He acknowledged that he was paid salary for days worked and accrued leave. In cross-examination, he reiterated that the respondents shared the same grievances. 11.In opposition to the suit, Francis Kamande, the Banking Support Service Manager (RW1), adopted his written statement as his evidence-in-chief. In cross-examination, he admitted that the respondents, as cash officers, were required to report to work at 6:00 a.m., but stated that on 5th December 2013, they reported at 6:30 a.m. He further testified that, although he was not privy to the respondents’ specific contractual terms, there existed operational procedures, provided during training, for the handover of ATM combinations, albeit with certain gaps. On the issue of the respondents’ grievances, RW1 maintained that overtime work did not attract additional compensation. In re- examination, he reiterated that the respondents earned Kshs. 8,000 per month. 12.Gray Grillen (RW2) acknowledged that the respondents had raised certain grievances and testified that ATM reconciliations typically commenced at 6:30 a.m. He explained that cash officers would thereafter load ATMs and proceed for field duties, returning at midday to prepare the machines for the following day. He stated that they ordinarily worked until 5:00 p.m. or 6:00 p.m., but in cases of ATM breakdowns, they could work until about 8:00 p.m. He further testified that on 5th December 2013, he was contacted by Kamande after the respondents stopped working and requested to meet the Managing Director, who was then on leave. RW2 stated that he listened to their grievances regarding extended working hours, but noted that raising such issues at that time, despite the vaults having been loaded, risked paralysing operations. He also admitted that the 1st respondent’s salary was withheld and that he did not attend the disciplinary hearing. 13.Steve Kangethe (RW3), the Human Resource Manager, testified that both grievance handling and disciplinary processes were governed by the Human Resource Manual. He stated that on 5th December 2013, at about 10:00 a.m., he received a report that the respondents were engaged in an illegal strike, having ceased work between 6:30 a.m. and 9:00 p.m. He consequently issued show-cause letters requiring them to explain their conduct. He further testified that on 6th December 2013, the matter was considered and a decision was made to dismiss the respondents. According to RW3, the respondents’ complaints related only to overtime compensation and salaries. He also alleged that the 1st respondent incited the others not to hand over ATM combinations, although he acknowledged that he was not aware of the procedure for such handover. In re- examination, RW3 stated that the show-cause letters were issued in the afternoon of the material day, and that none of the respondents sought additional time to respond. He added that the work stoppage occurred without notice and disrupted the appellant’s obligations to its customers in relation to ATM operations. 14.In the judgment, the learned judge found that on the night of 4th December 2013, the respondents worked late and were not provided with transport home, contrary to the appellant’s policy as confirmed by RW2. The learned judge held that this constituted a valid and serious grievance, particularly as the Assistant ATM Manager failed to act on the request or provide any reasonable justification. With respect to clause 7.0 of the Grievance and Complaints Handling Policy, the judge found that the respondents had complied with the prescribed procedure by raising their concerns with their immediate supervisors, including on 5th December 2013. On the issue of handing over ATM combinations, the learned judge, relying on RW2’s evidence, held that the respondents were justified in refusing to hand over the combinations, as the demands made were contrary to the established procedures. The learned judge further found that the respondents only engaged in a work stoppage after their immediate supervisors failed to address their grievances and instead treated them as misconduct. The work stoppage was therefore undertaken in pursuit of a legitimate grievance. Accordingly, the learned judge held that the appellant lacked a valid reason to terminate the respondents’ employment, rendering the dismissal unfair for want of a valid reason under section 43 as read with section 45(2)(a) and (b) of the Employment Act. The learned judge also found that the respondents had raised valid grievances which were not amicably addressed by their supervisors. On remedies, the learned judge held that the respondents were entitled to 12 months’ gross salary as compensation, together with one month’s salary in lieu of notice. 15.In the memorandum of appeal, the appellant raised ten (10) grounds of appeal, which it has summarized into three (3) broad grounds in its written submissions inter alia: whether the respondents’ termination was substantively justified; whether the termination was procedural; and whether the respondents were entitled to the award made. 16.When the appeal came up for hearing, learned counsel Mr. Henry Omino was present for the appellant; learned counsel Ms. Rashid was present for the 1st, 5th, 6th, and 10th respondents; while learned counsel Ms. Kisiangani appeared for the 2nd, 3rd, 4th, 7th, 8th, 9th, 11th, 12th, and 13th respondents. Each counsel had filed their respective submissions with brief highlights. 17.Counsel for the appellant, Mr. Henry Omino, advanced three principal arguments. First, on substantive justification, he contended that the respondents’ own written responses, disciplinary records, apology letter, and the 1st respondent’s testimony established that they had engaged in a work stoppage. He argued that this conduct met the statutory definition of a strike under the Labour Relations Act and, having failed to comply with mandatory procedures such as conciliation and notice, constituted an unlawful strike justifying summary dismissal. Reliance was placed on Lamathe Hygiene Food -vs- Wesley Patrick Simasi Wafula & 8 others [2016] eKLR, where the Court held that a strike is unlawful absent notice. Secondly, on procedural fairness, he submitted that due process was observed: the respondents were issued with notices to show cause, responded in writing, attended disciplinary hearings with representation, and did not request additional time or object to the process, rendering later complaints an afterthought. He relied on Gideon Karani Njine -vs- Rift Valley Railways [2019] KEELRC 794 (KLR) for the proposition that failure to object contemporaneously undermines later procedural challenges. Thirdly, on remedies, he argued that the award of the maximum 12 months’ compensation was erroneous, as the trial court relied on irrelevant considerations contrary to section 49(4) of the Employment Act; in the alternative, any award should have been minimal. 18.In response, Ms. Kisiangani, for the respondents, opposed the appeal on all fronts. On substantive justification, she denied that the respondents engaged in an unlawful strike, maintaining that they merely sought a meeting with management to address grievances and remained ready to work, as confirmed by the appellant’s own witness (RW1). She argued that any disruption resulted from the appellant’s actions, including alleged intimidation and police involvement, rather than a deliberate refusal to work, and that raising grievances was protected under section 46(h) of the Employment Act. On procedural fairness, she contended that the disciplinary process violated section 41 of the Employment Act and principles of natural justice, as it was conducted hastily within a single day, without adequate notice or time to prepare, effectively ambushing the respondents. Reliance was placed on Michael Odhiambo Opiyo -vs- Bidco Africa Limited [2021] KEELRC 1832 (KLR), where short notice was held insufficient for proper defence preparation. On compensation, she supported the trial court’s award, citing the respondents’ overtime work, lack of prior disciplinary issues, and the circumstances of their termination. 19.In a brief rejoinder, Mr. Omino maintained that the respondents’ refusal to hand over ATM combination codes necessitated limited police intervention and amounted to deliberate sabotage rather than intimidation. He reiterated that the disciplinary process was fair and that no prejudice was demonstrated, emphasizing that any request for more time would have been granted had it been made. 20.This is a first appeal. An appeal to this Court is by way of a retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put, they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusions, though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. [See: Gitobu Imanyara & 2 Others -vs- Attorney General [2016]. 21.We have carefully considered the record of appeal, the rival submissions of counsel, and the applicable law. We are mindful that the 1st respondent’s suit was the test suit for the other respondents. In our view, the appeal before us turns on three issues: whether there was a valid and fair reason for termination; whether the dismissal complied with procedural fairness under section 41 of the Employment Act; and whether the award of 12 months’ compensation was justified under section 49 of the Act. 22.As to whether there was a valid and fair reason for termination, section 43(1) of the Employment Act places the burden on the employer to prove the reason(s) for termination, while section 45(2)(a) requires that such reason be both valid and fair. 23.It is not in dispute that the respondents admitted that on the material day they collectively declined to continue working until their grievances were addressed. The evidence further shows that the respondents were cash officers entrusted with ATM operations and sensitive access codes, and that their refusal to work had immediate operational implications. 24.The disciplinary record and dismissal letter indicate that the respondents were found to have engaged in an illegal work stoppage, failed to follow grievance procedures, and were alleged to have incited other cash officers not to hand over ATM combinations. In the context of their duties, and considering the operational sensitivity of their roles, we are satisfied that the appellant had reasonable grounds to conclude that the conduct amounted to gross misconduct under section 44(4) of the Act. 25.Guided by the Court of Appeal decision in Coca Cola East & Central Africa Ltd -vs- Maria Kagai Ligaga [2015] eKLR, we reiterate that an employer is only required to demonstrate a valid and fair reason supported by evidence, and not proof beyond reasonable doubt. 26.Accordingly, we find that the appellant established a valid and fair reason for termination within the meaning of sections 43 and 45 of the Employment Act. 27.As to whether the termination complied with procedural fairness, section 41 of the Employment Act requires that before termination on grounds of misconduct, an employee must be notified of the allegations, given sufficient time, and afforded an opportunity to be heard. 28.The record shows that although show-cause letters were issued, the disciplinary hearing was convened and concluded within a very short period, and dismissal followed shortly thereafter. The respondents contended that they were not afforded adequate time to prepare their defence or properly respond to the allegations. 29.In Kenfreight (EA) Ltd -vs- Benson K. Nguti [2016] eKLR, this Court held that compliance with section 41 is mandatory and that failure to accord a meaningful hearing renders a termination unfair even where a valid reason exists. While there is no statutory minimum notice period, courts of law must consistently ask whether the employee had a realistic and practical opportunity to: understand the allegations against them; consult a representative; gather documents and or witnesses and finally, prepare a defence as was held by this court in Postal Corporation of Kenya -vs- Andrew K. Tanui [2019] eKLR, wherein it was emphasised that an employee must be given reasonable notice and a fair opportunity to prepare and respond. 30.In Ombajo -vs- Institute of Certified Public Accountants of Kenya (ICPAK) (Civil Appeal 62 of 2018) [2022] KECA 1360 (KLR) (2 December 2022) (Judgment) this Court considered an appeal where an employee was first issued with a notice to show cause and later given very short notice of a disciplinary hearing. In the comparator case before the superior court of Patrick Abuya -vs- Institute of Certified Public Accountants of Kenya (ICPAK) & Anor [2015] eKLR, the employee was invited to a disciplinary hearing on the same day it was scheduled. This court observed that the appellant therein was served with a letter at 3:00 p.m. on 3rd March 2014 requiring attendance at a disciplinary hearing the following morning at 9:30 a.m. on 4th March 2014. This Court found that, despite minor differences in timing, both situations were materially the same: the employees were not afforded sufficient time to prepare or respond, and no justification was given for the urgency of the proceedings. It was held inter alia:“ 28.Disciplinary proceedings are a grave matter for an employee as the consequences may be catastrophic to the employee’s life. In the case of the appellant, the complaints against him were serious, and there is no doubt that he needed sufficient time to prepare psychologically, and if need be, get the best advice that he could. Any prejudice to the respondent by having the appellant in his place of work could easily have been addressed by sending the appellant on compulsory leave, or interdicting him during the pendency of the disciplinary hearing, so that both the appellant and the respondent would have had time to reflect on and prepare to address the issues arising in the disciplinary process. 29.The fact that the appellant nonetheless, did his best to respond to the allegations made against him and attended the disciplinary proceedings on the due date, did not ameliorate the prejudice that was caused to him by the inadequate notice. It was oppressive, unfair, and unjust, for the respondent to serve the appellant with a letter for a disciplinary hearing that was to take place the next morning. Such haste reduced the disciplinary hearing to a mere formality to achieve that which the respondent had already predetermined. There was no procedural justice and this vitiated the whole disciplinary process.” 31.While there is no statutory minimum notice period, persuaded by the above cases, we hold that courts must consistently ask whether the employee had a realistic and practical opportunity to: understand the allegations; consult a representative; gather documents and or witnesses and finally prepare a defence. If an employee receives notice and is heard on the same day or the following morning, especially in misconduct cases involving dismissal, fraud, strike allegations, or multiple employees, such a notice ought to be found to be inadequate unless urgency is clearly justified. 32.Therefore, it is safe to conclude that a reasonable notice for a disciplinary hearing is not measured by a fixed number of hours or days, but by whether the employee was afforded sufficient time, in the circumstances of the case, to understand the charges, seek representation, prepare a defence, and meaningfully participate in the hearing. 33.In the present case, while a hearing was conducted, the compressed timeline between the show-cause letters and the hearing did not afford the respondents a meaningful opportunity to prepare their defence. We therefore find that the process fell short of the requirements of section 41 of the Act. 34.Having found the termination procedurally unfair, the superior court awarded each respondent the maximum compensation of 12 months’ gross salary under section 49(1)(c) of the Employment Act. 35.We are alive to the principle that this Court will not interfere with an award of damages unless the same was inordinately high or low or the judge proceeded on wrong principles. See International Planned Parenthood Federation -vs- Pamela Ebot Arrey Effiom [2016] eKLR. But this Court has in several previous decisions, decried the awarding of maximum compensatory damages for wrongful or unfair termination without a firm factual and legal foundation for such awards. It did so in CMC Aviation Limited -vs- Mohammed Noor [2015] eKLR, stating:-“The trial court did not state why it opted to give the remedy provided under section 49 (1) (c) that is, twelve months gross salary, and not the other remedies under section 49 (1) (a) or (b). The court should have been guided by the provisions of section 49 (4) but the trial judge said nothing about the reasons that led him to exercise his discretion in the manner he did.” 36.In Ol Pejeta Ranching Limited -vs- David Wanjau Muhoro [2017] eKLR:-“The trial judge did not at all attempt to justify or explain why the respondent was entitled to the maximum award. Yes, the trial Judge may have been exercising discretion in making the award. However, such exercise should not be capricious or whimsical. It should be exercised on some sound judicial principles. We would have expected the Judge to exercise such discretion based on the aforesaid parameters. In the absence of any reasons justifying the maximum award, we are inclined to believe that the trial Judge in considering the award took into account irrelevant considerations and or failed to take into account relevant considerations, which act then invites our intervention.” 37.Section 49(4) of the Act requires the court to consider relevant factors, including the employee’s conduct, the extent of contribution to the termination, the circumstances of dismissal, and the interests of justice. 38.In Kenfreight (EA) Ltd -vs- Benson K. Nguti [2016] eKLR, this Court held that compensation is not automatic and must be proportionate, taking into account the statutory factors under section 49(4). 39.In this case, although the termination was procedurally flawed, the respondents were not without blame. The evidence demonstrates that they collectively engaged in a work stoppage affecting essential banking operations, which substantially contributed to the breakdown of the employment relationship. These are material considerations under section 49(4)(c), (f), and (k). 40.The superior court, in awarding the maximum compensation, placed undue weight on factors such as lack of lunch provision and the speed of the disciplinary process, without adequately considering the respondents’ contributory conduct and the operational context. 41.In the circumstances, we find that an award of 12 months’ salary was excessive. A more proportionate award, taking into account the valid reason for termination and the respondents’ contributory conduct, is equivalent to two month’s gross salary for each respondent. 42.While the appellant had a valid and fair reason for termination under sections 43, 44, and 45 of the Employment Act, thetermination was procedurally unfair for want of compliance with section 41 of the said Act. 43.In the end, the appeal partially succeeds with the award of 12 months’ compensation, which was excessive, and is hereby set aside and substituted with an award of two month’s gross salary to each respondent under section 49(1)(c) as read with section 49(4) of the Act. 44.It is so ordered. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY 2026.S. GATEMBU KAIRU FCIArb, C.Arb......................................JUDGE OF APPEALP. NYAMWEYA.....................................JUDGE OF APPEALA.O. MUCHELULE.....................................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR.