Court orders Family Bank to pay former MD Munyiri Ksh.30M

Family Bank. Photo/COURTESY
Family Bank. Photo/COURTESY

The Labour Court in Nairobi on Friday ordered Family Bank to pay its former MD Peter Munyiri Ksh.30 million after he succesfully contested an unpaid gratuity payment for a 5-year contract.

This was after Peter Munyiri sued Family Bank, seeking a gratuity entitlement for the five years’ period he had served further claiming that what the bank offered was below what other companies grouped on its tier pay.

“ The respondents fall within tier 2 banks according to the Central Bank of Kenya classification of banks and is grouped together with institutions like the Housing Finance Company of Kenya Limited (HFCK) and the National Bank Limited ( NBK) that pay gratuity at the rate of 31% and 31% respectively,” read the claim.

Munyiri further submitted in court that he should have been paid a gross salary of 10 percent for every year of worked, according to the set bank rates.

He accused the bank of withholding his dues since he was contractually entitled to gratuity of Ksh.57 million for the five years of service.

Munyiri argued that the average market rate for gratuity for Chief executives in the banking industry is 30 % of the gross annual basic pay.

In the ruling, Justicee Maureen Anyango granted Munyiri Ksh.30.6 million based on a survey by a consultancy and audit company, PriceWateHouseCoopers, which came to the conclusion that the average market rate for gratuity payment to Chief Executives in the banking industry was 18% of the gross annual basic pay.

The Judge however dismissed the suggested 31% by the petitioner since this was only evident in National banks which are under parastatals unlike the respondents.

The Court also noted that Munyiri was facing criminal charges alongside 6 others including KTDA Branch Manager Robert Oscar Nyaga after being linked to the National Youth Service scandal.

They are facing nine counts, including failure to report unusual transactions carried out by the chief suspect Josephine Kabura Irungu’s three bank accounts.

Munyiri has vowed to appeal the Ksh.30 million award since he was seeking Ksh.57 million.

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Story By Sophie Njagi
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