The Employment and Labour Relations Court has dismissed a multi-million shilling lawsuit by a former bank executive. Picture of a stressed and sad man used for illustration purposes only. The court found that his employer had valid grounds and followed due process in terminating his employment. Mmata, who earned a monthly salary of KSh 580,000, which was later reviewed to KSh 690,090, worked as a senior manager in charge of ICT. He was dismissed in February 2023 after internal and external audits implicated him in “interference” with the tender process for a crucial new Core Banking System. In the judgment delivered on February 4, 2026, Justice Onesmus Makau found that Consolidated Bank Kenya Limited proved the termination was based on a valid reason related to the claimant’s conduct and that a fair disciplinary procedure was followed. What was the executive accused of doing? The dispute centred on a high-stakes procurement for a new Core Banking System (CBS) between 2021 and 2022. Mmata, as Head of ICT, was responsible for collating user requirements. According to the court documments, audits later revealed that Mmata had authored several memoranda to the then Acting CEO, challenging the recommendations of the official Tender Evaluation Committee and the Procurement Manager. The bank argued that this “top-down approach” and repeated challenges amounted to undue interference, skewing the process. “The then Acting Chief Executive Officer (CEO), Mr. Japheth Kisilu, declined to approve the award following several memoranda to him by the claimant challenging the Evaluation Committee’s findings and the Procurement Manager’s opinion. These memoranda raised issues such as database costs, system requirements and evaluation criteria.
The open tender process was subsequently cancelled on 18th October 2021 for being “non-responsive.” The Respondent then pursued a direct procurement process. The claimant, in a memo dated 18th March 2022, recommended direct procurement from MFI Technology Solutions Limited, the agent of the current CBS licensor,” read the court documents. The subsequent direct tender was awarded to MFI Technology Solutions Limited in May 2022, but the contract later failed due to non-performance and this prompted the bank to initiate internal and external audits. Internal and external audit reports by the bank and PricewaterhouseCoopers (PwC) dated December 16, 2022, cited these irregularities as grounds for disciplinary action against Mmata and the then Acting CEO. Why did the court find the dismissal fair? Justice Makau’s analysis focused on the two pillars of a fair dismissal under the Employment Act: substantive justification and procedural fairness. The court found the bank discharged its burden of proof. The audit reports and Mmata’s own admitted memoranda established that he overstepped his role. “As Head of ICT, his role was limited to collating user requirements. He had no mandate to evaluate or challenge the Evaluation Committee’s work,” the judge stated, adding that hHis actions exposed the bank to “reputational, financial, and operational risks.”
The court rejected Mmata’s claims of a flawed process in his termination. He was issued a detailed show-cause letter on December 21, 2022, suspended on half-pay, allowed to respond in writing, and invited to a disciplinary hearing on January 31, 2023, where he could be accompanied by a representative. Justice Makau held that the bank “complied with Section 41 of the Employment Act and the termination was procedurally fair.” The claim of discrimination was also dismissed, as the court noted the implicated Acting CEO was also disciplined and dismissed for the same procurement irregularities. What was the partial win for the former employee? While the main claim failed, Mmata succeeded in challenging an illegal deduction from his terminal benefits. The bank had surcharged him KSh 911,200 (40% of the value) for lost POS devices. The court found the bank failed to justify this deduction because it did not file a counterclaim, provide evidence of Mmata’s liability, or show how the 40% figure was arrived at.
“The Respondent did not show how it arrived at the surcharge… Without filing and proving a counterclaim for the said sum and/or an admission of liability executed by the claimant, the surcharge… must fail,” Justice Makau ruled. Based on payslip evidence, the court ordered the bank to refund the actual amount deducted, KSh 872,961.65, plus interest from the date the suit was filed. Justice Onesmus Makau was appointed judge of the ELRC in July 2012. This judgment affirms that employees in sensitive roles, especially involving procurement, must adhere strictly to defined procedures and avoid actions that could be construed as interference or conflict of interest. Concurrently, it serves as a warning to employers that while they can discipline staff for serious misconduct, they cannot arbitrarily deduct money from terminal dues without strict legal justification and proof of liability.
By Elijah Ntongai
