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Court awards former bank director Sh38 million

The Court of Appeal has awarded a former director of Jamii Bora Bank Sh38 million following termination of her five-year-contract.

Ms Minnie Mbue, formerly with Central Bank of Kenya (CBK) as a manager in the bank supervision division, was employed by Jamii Bora on April 10, 2010, for a renewable five-year contract.

She was poached by the bank after her successful involvement in the merger of City Finance Bank and Jamii Bora Micro-Finance to form Jamii Bora Bank.

At the trial, she told appellate judges Daniel Musinga, Gatembu Kairu and Agnes Murgor that the bank requested her to terminate her employment with CBK and join Jamii Bora as the executive director on a monthly salary of Sh800,000 plus other benefits.

Ms Mbue further submitted before the three judges that on August 31, 2011, the bank directed her to end her contract to enable the institution to undertake major structural changes.

She sought payment of her terminal dues of Sh112.6 million. This included a balance of contract Sh83.2 million, three month’s salary in lieu of notice, Sh2.4 million, gratuity Sh24 million and Sh3 million relating to various benefits.

In defence, the bank contended that the parties had entered into contract as equal partners and did not influence Ms Mbue’s contract termination.

The lender also alleged that Ms Mbue failed in her duties resulting in massive financial losses which forced the bank to mitigate the crisis by ending her contract.

MUTUAL AGREEMENT

After the parties failed to reach a mutual agreement on the send-off package, Ms Mbue moved to the Industrial Court seeking payment of Sh112.6 million.

On November 1, 2013, Justice Nzioki Wa Makau ruled the termination of Ms Mbue’s contract was in accordance with the provisions of the employment agreement.

The judge said the claimant’s contract was for five years, and although it could be renewed for a similar period, it was not a contract for 10 years. He rejected part of her reliefs and awarded her Sh15.4 million.

Aggrieved, Ms Mbue appealed the ruling and faulted the trial judge for holding that the contract was not for a fixed term.

She urged the appellate judges to reverse the trial court’s decision and award her remedies.

Although the appellate judges found the termination of Ms Mbue’s contract was by mutual consent, they said the process of sending her home was initiated by the bank.

“The bank wrote to her on September 9, 2011 but in a meeting held on August 29, 2011, the board had decided to pursue a negotiated disengagement with the claimant,” observed the judges.

Consequently, they set aside the Industrial Court award of Sh15.4 million and awarded her Sh38 million.

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