Business

NBK to pay sacked staff Sh11.2m in compensation

NBK to pay sacked staff Sh11.2m in compensation

The National Bank of Kenya (NBK) has been ordered by the Labour Court to pay three former employees Sh11.2 million compensation for wrongful termination after they were fired over their purported failure to respond to calls to avert the potential loss of Sh330 million six years ago.

Investigations at the lender had revealed that a member of staff at the bank’s ICT Department had withdrawn the money from various government related accounts and credited the same to two accounts held by NBK.

On March 16 and 17, 2013 it was established that there was a systems breach at NBK where a fraudulent batch gateway of Sh330.02 million was processed in the BankFusion Universal Banking (BFUB) system but which was averted, the court papers say.

Justice Maureen Onyango awarded Jimmy Labi and Sylvester Mutuli Sh5.69 million and Sh4.7 million respectively as compensation for 12 months gross salary.

Another ex-staffer, Joseph Karumba, is set to receive Sh800,000 as compensation for 10 months gross salary.

Mr Mutuli had worked at NBK for over 11 years at Head Office ICT Division until June 2013 before he was transferred to the Credit Division. Mr Labi worked as the Manager ICT Department to the Business Continuity Centre and also redeployed to multiple departments before finally being laid off. Mr Karumba was a clerical staff at the head office ICT division by the time he was let go.

Mutuli and Labi were administrators of the Virtual Private Network (VPN) system and were blamed for the breach.

The bank averred that the duo failed to report to the management the shortcomings and the vulnerability of the VPN system as required and to hand over to the infrastructure unit at ICT systems that failed to record access logs.

The court however found that they were not given adequate opportunity to respond to any charges before action was taken against them.

“I find the termination of employment of the claimants unfair both substantively and procedurally. The three claimants are all entitled to compensation having concluded that they were unfairly terminated and considering they each worked for the respondent for quite a long time,” read the judgement.

“The claimants cannot be reinstated as in my opinion they did not demonstrate exceptional circumstances to warrant reinstatement. Further, having been out of employment since 2013, the period of three years within which the court may order reinstatement has since long lapsed.”