Simon S. Mungu v Chairman BOG, Friends Lugulu Mission Hospital [2014] KEELRC 608 (KLR)

Industrial Court of Kenya

14 March 2014

HWHellen Wasilwa

937 words in judgment

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The bottom line

A Kenyan hospital wrongly sacked a doctor without a hearing and must pay him Sh1.4 million in compensation.

What this practically means

Executive summary

Dr. Simon S. Mungu, employed on 1.3.2012 on a three-year renewable contract as a medical doctor at a monthly salary of Ksh 200,000 and seconded to the Patient Support Centre at the Comprehensive Care Centre, sued after his services were terminated on 28.2.2013. He sought payment for the remainder of his contract (Ksh 4.2m) plus three years' leave (Ksh 600,000), a total of Ksh 5.8m. The respondents, through two witnesses, contended that although the contract was three years, appointment was subject to annual performance evaluation and yearly renewal, and that his renewal request was rejected on grounds of professional failure, negligence, incompetence and disrespect to staff. The court framed three issues: the nature of the contract, lawfulness of the termination, and remedies. It held on the appointment letter (Exh 1) and the secondment letter that the claimant was a hospital employee on a three-year renewable contract, never contracted with the Comprehensive Care Centre, and that the yearly-renewable contention was incorrect. It found the termination unfair and unlawful: no hearing was accorded as required by Section 41 of the Employment Act, and the allegations against the claimant were not proved. On remedies, the court awarded actual loss - Ksh 1,000,000 for five months' unemployment before his July 2013 engagement at Aga Khan Hospital Kisumu, Ksh 200,000 for one year's leave allowance and Ksh 200,000 in lieu of notice, totaling Ksh 1,400,000 - together with a certificate of service and costs to the claimant. The full Ksh 5.8m sought was not awarded. Hellen Wasilwa, Judge, delivered the judgment on 14.3.2014.

Key legal issues

Nature of the contract - whether yearly renewable or a three-year renewable contract with the hospital

Holding

The claimant had a three-year renewable contract with the hospital, not with the Comprehensive Care Centre, and the contention that it was yearly renewable was incorrect.

Reasoning

The appointment letter (Exh 1) dated 1.3.2012 showed employment on a three-year renewable contract signed by the director of administration of the hospital. The secondment letter to the Patient Support Centre expressly stated the claimant remained a hospital employee answerable to hospital management. At no time did the claimant enter a separate contract with the Comprehensive Care Centre.

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Whether the respondents unlawfully terminated the contract

Holding

The termination was unfair and unlawful because the claimant was not accorded a hearing under Section 41 of the Employment Act and the allegations against him were not proved.

Reasoning

Having found the contract was a three-year renewable contract defeated by the respondents, the court held the termination unlawful. No hearing was accorded as envisaged under Section 41 of the Employment Act before termination on grounds of poor performance. The respondents' allegations of failure to perform professionally, negligence, incompetence and disrespect were not proved.

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Remedies

Holding

The claimant was awarded Ksh 1,400,000 comprising five months' lost salary, one year leave allowance and one month's salary in lieu of notice, plus a certificate of service and costs.

Reasoning

The claimant was unemployed for five months after dismissal on 25.2.2013 until employment at Aga Khan Hospital Kisumu in July 2013. The court compensated that actual loss at Ksh 200,000 per month, awarded one year's leave allowance and one month's notice pay, and ordered a certificate of service and costs.

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Legal principles established

An employer must, before terminating employment on grounds of misconduct, poor performance or physical incapacity, explain the reasons to the employee and hear and consider any representations, as required by Section 41 of the Employment Act.

Court orders

1.Respondents to pay the claimant Ksh 1,000,000 being compensation for 5 months without employment
2.Respondents to pay the claimant Ksh 200,000 being one year leave allowance
3.Respondents to pay the claimant Ksh 200,000 being one month salary in lieu of notice
4.The claimant to be issued with a certificate of service
5.Respondents to pay costs of this suit

Authorities

Legislation

Employment ActSection 41(1)
Employment ActSection 41(2)
Employment ActSection 42(1)
Employment ActSection 44(3) and (4)

Jurisdiction invoked: Jurisdiction over employment and labour relations dispute (Employment Act, Section 41 invoked on merits); no constitutional/statutory jurisdictional provision expressly cited

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Simon S. Mungu v Chairman BOG, Friends Lugulu Mission Hospital [2014] KEELRC 608 (KLR)", Case Analysis (2014). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/608/eng@2014-03-14

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.