Bingwa Sacco Sacked Manager For Exposing Financial Rot To The Sacco Societies Regulatory Authority (SASRA)

By The Weekly Vision

The management of Bingwa Sacco (formerly Kirinyaga Tea Growers Sacco Ltd) has been accused of unfair treatment and terminating the services of employees holding divergent opinions. Although several employees have lost their jobs under different circumstances with some leaving without compensation, the case of one James Njuguna Mbeu has caught the management pants down.

It is claimed that Mr Njuguna had revealed to the Sacco Societies Regulatory Authority (SASRA) how some members of staff and certain Board members failed to adhere to the policy recommendations that the directors with non-performing facilities be disqualified from holding office, this expose is what eventually led to his unfair dismissal. Following his exposé in 2019, an inspection audit exercise was conducted in the whole organization by SASRA and a report was published in June 2019, the report confirmed his earlier claim. 



Further, in 2020, he included one defaulting director Andrew Francis Kibara Mugo in the list of defaulters and forwarded it to the credit committee in compliance with the SASRA report. As a result, he had an altercation with the director and he was advised to write an apology letter to the director and he did so on 22nd December 2020. The apology letter reads “Further to our meeting held at the boardroom by you, Operations Manager and I, I have found it fit to further apologize in writing, so that we can rest the issue. I do regret including your name in the list of defaulters to be invited to the credit committee which caused embarrassment to your end. I therefore tender my unreserved apology to the above. Kindly accept my apology”.

Njuguna upon being fired filed a case at the Employment And Labour Relations Court at Nyeri (Cause No. E054 of 2021) against Bingwa Sacco. The case has put Bingwa Sacco on the radar after a judgement by Judge Onesmus Makau dated 8th June 2023 ordered for compensation over unlawful termination of employment. In his ruling, Judge Makau noted “I have found that the termination of the claimant’s employment was unlawful and unfair. I further found that he is entitled to some of the reliefs sought. I also found that the counter-claim by the respondent lacks merits and it must fail. Consequently, I now enter judgment for the claimant awarding him the following;

Notice…………………………..Kshs.84, 800.00

Compensation…………….. Kshs.848, 000.00

Unpaid salary…………………Kshs.109, 264.00

Car allowance………………….Kshs.50, 000.00

Total Kshs.1, 092,064.00

In the case, Njuguna claimed that he was unlawfully suspended from 3rd August to September 2021 and was subsequently unfairly dismissed by the respondent on 1st October 2021.  However, Bingwa Sacco in a quick rejoinder claimed that Njuguna was suspended and thereafter dismissed for refusing to report to his new workstation upon transfer to Kianyaga Branch and thereafter absconded work. Njuguna on his part claimed that he was on duty from 1st-5th August 2021 and thereafter he was suspended until the day he was dismissed. He started his career in the respondent on 17th November 2014 as a Micro-Credit Assistant, rose to Micro-credit officer on 24th July 2015, and became a Branch Manager on 1st October 2015. On 3rd January 2018, he was appointed acting Credit Manager and due to good performance of his duties, he was confirmed as the respondent’s Credit Manager on 1st November 2019.

After exposing the directors, the management decided to remove him from his position and a committee meeting of Bingwa Sacco resolve to deploy him to the debt collection department as the Debt Collection Manager on 1st March 2021. On 23rd April 2021, the committee met again and resolved that the claimant be transferred to Kianyaga Branch. A transfer letter was issued on 19th July 2021 to report to Kianyaga on 1st August 2021 and on 27th July 2021 Njuguna signed the job description as acceptance to his deployment to Kianyaga Branch.

However, on 29th July 2021, he wrote a letter declining the transfer to Kianyaga Branch as a Branch Manager and stated that he would remain in his earlier position until his grievances were addressed by the management. He never reported to Kianyaga Branch on 1st August 2021 and therefore he was dismissed for gross misconduct of insubordination and failure to report to work.   However, according to Njuguna, the transfer to Kianyaga as Branch Manager was a demotion because the said position ranked below credit manager in the Organogram which was in force then and his letter of grievance about the said transfer was ignored and in response, he was suspended from August to end of September 2021. Subsequently, he was dismissed without being accorded any hearing as required under section 41 of the Employment Act.  

Director Andrew Francis Kibara Mugo had defaulted on his Sacco Loan, he was a member of the Sacco, and he wanted to continue defaulting on the loan quietly, he was powerful in the Sacco and could terrorize the managers, and the action taken against the claimant was retaliation. Njuguna seemed to have touched the untouchable and he was therefore going to face the consequences. The first consequence was transfer to a non-existent position of Debt Collection Manager SG4 vide the letter dated 20th February 2021. The second consequence was the loss of a car allowance of Kshs.10, 000.00 per month from 1st March 2021 when the transfer took effect. The third consequence was a deployment to the Kianyaga branch as a Branch Manager vide the letter dated 19th July 2021 which was a demotion in rank, the fourth consequence was suspended for two months and finally dismissal from employment without being accorded any hearing.

The judge noted, “In view of the foregoing analysis, I agree with the claimant that the said deployment/transfer were retaliatory or disciplinary action taken against him for doing his duty as the credit manager of the Sacco”. The ruling further reads “As regards the termination, I have already made a finding of fact that the reason for the termination was not valid and fair and fair procedure was not followed. Therefore I make declaration that the termination of the claimant’s employment vide the letter dated 1st October, 2021 was unfair and unlawful within the meaning of Section 45 of the Employment Act”. 

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