The Employment and Labour Relations Court has ordered the National Bank of Kenya (NBK) to pay its former managing director Munir Sheikh Ahmed Sh26,520,000 as compensation for unlawful dismissal four years ago.
In his ruling at the Milimani Law Courts on October 9, Justice Byram Ongaya said the bank could not prove claims of gross misconduct and misrepresentation of financial statements against Mr Munir, which formed the basis of his sacking on March 31, 2016.
The bank alleged that Munir failed to ensure the bank’s financial results reflected the correct position. It said, “The bank’s interim financial statements for June 2015 and September 2015 erroneously showed that the bank was making profits whereas the final reports indicated actual losses.”
But Justice Ongaya faulted NBK’s board saying the external audit did not apportion any guilt on Munir for the Sh1.2 billion loss by the lender.
“Accordingly, the reason for termination was not established at all and the court finds that it was unreasonable to dismiss the petitioner upon a general allegation that was never established,” the judge noted.
He also agreed with Munir that the publication of his dismissal soiled his reputation.
“The court considers that it is unfair labour practice for an employer, without good cause or reason, to publicise and publish adverse material about its employee in view of the contract of service and its execution as it was done in the present case, and, such publication, in the court’s opinion, amounts to unfair labour practice.”
According to the judge, NBK had Munir take the bullet alone while the loss of funds could have been as a result of misconduct or poor performance on the part of the board or staff.
“While the court reckons that the subsequently reported loss of Sh1.2 billion reflected adversely on the respondent, its board, management, and other staff, as urged for the petitioner, a return of a loss is an inherent possibility in any business enterprise and by itself (alone) does not establish misconduct or poor performance on the part of the CEO like in the case of the petitioner or indeed, against the other staff or the board.” Ongaya ruled.
Munir had sought compensation of Sh453.4 million but the court rejected the amount. It declined to award him damages for the anguish he suffered following the sacking.