Dismissal of Lydia Kaguri Over Money Lending
The Court of Appeal in Nyeri overturned a High Court ruling that awarded Lydia Kaguri, a former Consolidated Bank employee, Ksh 2 million in compensation, backing her dismissal over money lending activities deemed to conflict with her job
Lydia Kaguri, a former customer service officer, was fired in 2017 for lending Ksh 300,000 to a customer at the bank’s Maua branch and earning interest from it.
The bank argued that her actions amounted to running a business in competition with her employer, violating internal regulations.
She was also accused of withdrawing Ksh 20,000 from the customer’s account without proper authorization and failing in her role as a custodian of the vault, contributing to a loss of Ksh 641,500.
A three-judge bench comprising Justices Sankale Ole Kantai, Jessie Lesiit, and Abida Aroni ruled that the bank followed due process in handling the disciplinary case, concluding that Kaguri’s explanations were unsatisfactory.
The court dismissed her claims of unfair termination and financial loss, agreeing with the bank’s legal team, led by lawyer Charles Mwongela, that her dismissal was lawful and justified.
Kaguri had sought reinstatement, a salary shortfall of Ksh 36.8 million, 12 months’ compensation worth Ksh 1.8 million, and Ksh 230,000 in unpaid half salary.
She denied the money lending allegations, claiming the customer, whom she described as a family friend, had approached her for financial help to repair a vehicle and later turned against her.
However, the court found her actions to be in breach of employment terms and upheld her dismissal.
