Employment and Labour Relations Court had Jurisdiction to determine claims for Defamation and Malicious Prosecution
Naqvi Syed Qmar v Paramount Bank Limited & another
Cause Number 346 of 2014
Industrial Court at Mombasa
J Rika J
December 9, 2015
Banker Mr. Naqvi Syed Qmar filed his Statement of Claim and stated that the 1st Respondent Bank as its Chief Manager employed him. He earned a monthly salary of Kshs. 300,000. He was confirmed in the position upon a favourable performance appraisal. He was arrested after the 1st Respondent’s Internal Auditor, reported to the Police that the Claimant had stolen Kshs. 9,000,127, from the 1st Respondent’s Mombasa Branch, in which he was Chief Manager. Mr. Qmar was suspended pending finalization of the investigation and there after was summarily dismissed. The Claimant was charged with the offence of stealing by servant in the Chief Magistrate’s Court at Mombasa Criminal Case Number 3199 of 2012. It was reported in the Daily Nation Newspaper on November 9,2012, and the Nation TV News of November 8,2012, that the Claimant had been charged with stealing. The Director of Public Prosecutions advised the case against the Claimant be dropped and it was withdrawn on the July 30, 2013.The Claimant stated that the 1st Respondent unfairly and unlawfully dismissed him. He also claimed that he was maliciously prosecuted and defamed by the Respondents thus the suit
i. Whether the Claimant was unfairly and unlawfully dismissed under the Employment Act, 2007 and whether there was probable and reasonable cause for the 1st Respondent to act the way it did
ii. Whether the Claimant was maliciously prosecuted and defamed when criminal charges were preferred against him without proper investigations being carried out
iii. Whether the Respondents were jointly and severally liable to pay to the Claimant damages that arose on the unfair and unlawful dismissal and the malicious prosecution claims
iv. Whether the Claimant could merit an unpaid salary claim in damages as he was already employed elsewhere
v. Whether the jurisdiction of the Court extended to all disputes relating to employment and labour relations
Employment Law – termination of employment –unfair & summary dismissal – claim for unfair & summary dismissal against a bank – where an employer suspected the employee of stealing; or where the employee carelessly and improperly performed his role- whether the claimant was unfairly and summarily dismissed – whether the Claimant merited compensation for unfair termination – Employment Act section 41,42,45
Employment Law – Employer & employee relationship – suspension and dismissal of employee from service – circumstances in which employment disciplinary mechanisms may amount to malicious prosecution – whether a claim for malicious prosecution is a ground for defamation.
Criminal law - Malicious prosecution- proof of malicious prosecution-where criminal charges were preferred against the claimant without investigations being carried out- whether it amounted to malicious prosecution in the circumstances- Penal Code, section 23.
Tort- Defamation – libel – damages – rationale for awarding damages in defamation – principle of restitution, vindication and consolation – whether the trial judge applied the principles while giving the award.
Jurisdiction- jurisdiction of the Employment&Labour Relations Court- whether the court had jurisdiction to determine matters of defamation and malicious prosecution
Sections 41, 43 and 45 of the Employment Act 2007 required the employer to justify the decision to terminate, and show fair procedure was followed in arriving at the decision. Where an employer suspected the employee of stealing; or where the employee carelessly and improperly performed his role; the employer had the right to summarily dismiss the employee under section 44  of the Employment Act 2007. The 1st Respondent was a Bank, and the industry correctly demanded employees of the Banks, to be imbued with a high degree of trust and confidence and thus it was justified in its decision.
The evidence by the Claimant that he tipped the Head Office that the money was missing, opening the way for the Internal Auditor to make his confirmatory findings, was persuasive. The fact that the Claimant left his key with the Chief Cashier on the day the money was missing and this was within the routine practice, known to the employer. Secondly, it was the Claimant who reported to the Head Office that money was missing. These actions by the Claimant could not be taken to amount to careless and improper performance of his duty, warranting summary dismissal under section 44  of the Employment Act 2007.
The testimony of the Claimant did not suggest the presence of any common intent between the prime suspect Lawrence and the Claimant to steal. The employer did not pursue the fugitive with alacrity, but zeroed in on the Claimant, causing his quick arrest and premature arraignment in court. Tellingly, the Internal Auditor conceded on cross-examination that, somebody had to be charged, for the Claim to fall through. He was referring the charging of the Claimant with the criminal offence, and the insurance claim lodged by the 1st Respondent with its Insurance Company, for compensation for the lost cash.
The Claimant’s suspension was on November 3, 2012 and summary dismissal followed on November 12, 2012. There was absolutely no record of a disciplinary hearing availed to the Claimant before dismissal. He was just suspended, and dismissed upon arraignment in Court. There was adequate evidence to conclude the summary dismissal of the Claimant was not based on valid and fair ground, under sections 43 and 45 of the Employment Act 2007. Procedure was in fundamental departure from the minimum statutory procedure prescribed under section 41 of the Act. The Claimant merited compensation for unfair termination, under sections 12&49 of the Employment and Labour Relations Court Act. This was an aspect of the dispute that involved the employer and the employee, and the remedy granted was enforceable solely against the employer.
In assessing the level of compensation, the court took into account that the Claimant was denied substantive as well as procedural justice. It had also been taken into account that he immediately got a better paying job in Uganda, which he had been interviewed for, even before the exit from the 1st Respondent Bank. This made his claim for unpaid salary up to March 2016 calculated at Kshs. 12 million, groundless. The Claimant got an alternative job immediately he was dismissed. To allow him the prayer for anticipated salary would be to place in his hands unjust enrichment. He could be earning salaries from two sources, while rendering no service to the former employer. Such payment would not fit the description of fair remuneration, which presupposed an employee was paid for work performed.
The retirement date given by the Claimant as March 2016 was in any case, not in his contract of employment. He did not rely on any law in fixing his date of retirement. Summary dismissal was nonetheless unfair and compensation was due to the Claimant.
The Constitution of Kenya, and the Employment and Labour Relations Court Act, broaden the jurisdiction of the court. Article 162  [a] of the Constitution contemplated the creation of the court, defined the material jurisdiction of the court to include all disputes relating to employment and labour relations. The article did not say contractual disputes, between Employers and Employees; it stated all disputes relating to employment and labour relations. Section 12 of the Employment and Labour Relations Court Act referred to article 162  [a] of the Constitution and the provisions of the Act, or any other written law that extended jurisdiction to the court relating to employment and labour relations. Section 12 was inclusive. It was not an exclusive list of the dos and don’ts of the court. The court had assumed jurisdiction and determined claims for employment related defamation and malicious prosecution.
The jurisdiction of the court extended to all disputes relating to employment and labour relations. Personal jurisdiction was no longer confined to employers and employees as was the case under the Trade Dispute Act, but to all persons implicated in an employment and labour relations dispute.
In employment law, defamation took place when the employer publicized or caused to be publicized, statements that stigmatized the employee. The manner of dismissal and the negative publicity attached to the Claimant had the potential to damage his employability. Potential employers in the industry in which the Claimant was a long-time servant, would find his attractiveness diminished. Employment related defamation was based on the old tort of defamation but given a new spin: the employee’s injured or damaged employability, and not merely the personal stigmatization, was to be compensated.
It could still be difficult for the Claimant to find employment in the banking industry in Kenya granted the bad press he was subjected to through the actions of the 1st Respondent. The Claimant merited general damages for defamation occasioned to him by the employer. He was clearly libelled and damned as a bank thief. Even after the charges were dropped, the 1st Respondent did nothing in making amends, and had instead opted to argue that investigations were still on, and the Claimant was still a suspect. General damages for defamation were merited.
A Claimant under malicious prosecution must show:-
a. The Respondent prosecuted him.
b. Prosecution was determined in his favour.
c. Prosecution was without reasonable and probable cause.
d. Prosecution was malicious
The second element was positively established through the letter of the DPP withdrawing the charges against the Claimant. Determination of prosecution in favour of the Claimant, meant, either the Claimant was absolved upon trial by the Criminal Court, or the Prosecuting Authority made a decision not to prosecute. The DPP in this case made a decision not to prosecute. It was not relevant that the decision was made under a procedural law that permitted the Claimant to be re-arrested and arraigned in court. The first two elements were shown to be present in the claim for malicious prosecution.
The question whether there was probable and reasonable cause required the court to examine whether the material known to the Prosecutor, would have satisfied a prudent and cautious man, that the Claimant was probably guilty of the offence. The court was similarly to be satisfied that the Respondent verified facts through an enquiry, with the level of scrutiny of the facts commensurate with the seriousness of the charges against the Claimant.
There was no material available to the Prosecutor to show any prudent man to believe the Claimant was guilty of the offence. It was the wrong approach to presume that because Kshs. 9 million was incontestably stolen from the Bank, the Chief Manager had to be a suspect. The Respondents failed to verify facts, with the level of scrutiny commensurate with the seriousness of the charges against the Claimant.
In establishing the last element, the Claimant was supposed to show the Respondents had an improper frame of mind. The improper frame of mind was revealed in the evidence of the Internal Auditor, when he conceded that for the 1st Respondent’s insurance claim to fall through, somebody had to be charged. The police process was manipulated to achieve a business end. Malice was present in a prosecution when criminal charges were preferred against a Person for other purposes, other than carrying the law into effect. Traditionally Police Officers enjoyed protection from civil liability for the manner in which they conducted criminal investigations and prosecuted offenders.
The law had changed. Common law positions had to be aligned to the demands of the Constitution. Commonwealth jurisdictions such as Canada had developed the tort of negligent investigation, where Police Officers were deemed to owe a duty of care to suspects under investigation. Malicious prosecution involved wrongful assault on the dignity of the Person, Name and Privacy. These were values that enjoy protection under the Constitution. The Police become liable when sufficiently connected with the laying of the charges, or carriage of the prosecution once started. Both Respondents were liable for damages to the Claimant Employee for malicious prosecution.
Application allowed. Claimant awarded: -
i. Damages at Kshs. 2,500,000/= payable solely by the employer for unfair and unlawful summary dismissal
ii. Respondents to pay jointly and severally, the sum of Kshs. 2,500,000/= as general damages for malicious prosecution.
iii. 6 months’ salary in compensation for unfair termination, at Kshs. 300,000 x 6 = Kshs. 1,800,000, to be paid by the 1st Respondent.