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ELRCPartially AllowedCause No. 1854 of 2014· [2016] KEELRC 395 (KLR)

Martin O. Oluoch & 3 others v Board of Management Kenyatta National Hospital & another [2016] KEELRC 395 (KLR)

Employment and Labour Relations Court
14 November 2016
2,511 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's employment court ruled KNH wrongfully fired four senior managers without reasons or a hearing, awarding them salary damages plus Kshs 1 million each.

What this practically means

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Executive summary

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Four senior managers of Kenyatta National Hospital (Planning Manager, Chief Internal Auditor, Finance Manager and Supplies and Procurement Manager) sued the Hospital's Board of Management and its Director after their services were terminated by a letter dated 20.3.2002 signed by the 2nd Respondent, the Director. The matter, originally filed as HCCC No. 546/2002, was transferred to the ELRC on 23.7.2014 and registered as Cause No. 1854/2014. The Claimants contended that the Director acted ultra vires since the Hospital Management had no authority to fire them, that no reasons were given, and that they were never heard, in breach of natural justice. The Respondents maintained the dismissals were for alleged misappropriation of resources under Section 44(4)(g) of the Employment Act and that due process was followed. The court framed three issues: validity of reasons, due process, and remedies. It found the termination letters gave no reasons, that the Hospital's own Code required statements of charges and disciplinary committee proceedings which were never undertaken, and that the Claimants were condemned unheard. The termination was held unfair and unjustified. The court awarded each Claimant 12 months' salary as damages, Kshs 1 million each in aggravated damages given the broadcast dismissal, pension and retirement dues, costs against the 1st Respondent, and interest at court rates from the date of judgment. The claim was partially allowed; broader salary claims were not awarded.

Key legal issues

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01

Whether there were valid reasons to terminate the services of the Claimants

Holding

There were no valid reasons; the termination letters gave no reasons and no statement of charges was ever issued to the Claimants

Reasoning

The termination letters of 20.3.2002 simply stated that the Hospital Management had decided to terminate the services of the Claimants without any reasons. Under Part XI of the Hospital's Terms and Conditions of Service, an employee facing dismissal must be supplied with a statement of charges setting out the offences and reasons warranting disciplinary action. No such statements were issued, and the Director had to write to the Permanent Secretary to explain his actions, confirming the absence of reasons.

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02

Whether due process was followed before the termination

Holding

No due process was followed; the Claimants were never subjected to the disciplinary procedure in the 1st Respondent's Code

Reasoning

The Hospital's Code provided for statements of charges, the opportunity to reply within 72 hours, and Disciplinary Committees before which the employee could defend himself and present evidence. The Claimants were never subjected to any of these measures, nor given warnings or a hearing. The termination therefore breached both the Code and the rules of natural justice, condemning the Claimants unheard.

p. 5
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What remedies the Claimants are entitled to

Holding

12 months' salary as compensation, aggravated damages of Kshs 1 million each, pension and other retirement dues, costs and interest

Reasoning

Having found the termination unfair and unjustified, and that the Claimants were condemned unheard, the court awarded each Claimant the equivalent of 12 months' salary as damages for unlawful and unjustified dismissal, plus Kshs 1 million each in aggravated damages given the malicious and ill-intentioned nature of the dismissal which was broadcast on the 1 o'clock news, together with pension dues, costs and interest.

p. 5

Legal principles established

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  • A termination letter that gives no reasons for dismissal discloses no valid reason for termination
  • Failure to subject an employee to the disciplinary procedure in the employer's own terms and conditions of service breaches the rules of natural justice and renders the dismissal unfair
  • Aggravated damages may be awarded over and above statutory remedies where an employee's rights have been violated

Court orders

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  1. 1.Equivalent of 12 months' salary as damages for unlawful and unjustified dismissal to each Claimant (1st Claimant Kshs 847,860; 2nd Claimant Kshs 837,840; 3rd Claimant Kshs 809,820; 4th Claimant Kshs 961,020)
  2. 2.Aggravated damages of Kshs 1 million for each Claimant for the unfair, unlawful, wrongful, malicious and ill-intentioned acts of the 1st Respondent
  3. 3.Claimants to be paid their pension dues and any other dues they would have been entitled to at retirement
  4. 4.The 1st Respondent to pay costs of the suit
  5. 5.Amounts due to attract interest at Court rates with effect from the date of the Judgment

Authorities

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Legislation

  • Employment Act No. 11 of 2007Sections 41, 43, 44, 45, 46, 49 and 50
  • Employment Act No. 11 of 2007Section 44(4)(g)

Cases cited (5)

  • Charles Kariuki Wambugu vs. Kenya National Library Service Board
    HCCC 2013 of 1989
  • Ezekiel Okemwa vs. Kenya Maritime & Fisheries Institute
    (2016) eKLR
  • National Union of Mine Workers and Another and the Commission for Conciliation, Mediation and Arbitration
    Case No. J.R. 2512/2007
  • Sappi Novoboard (Pty) Ltd vs. Bolleurs
  • East African Airways vs. Knight
    (1975) E.A. 165
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction following transfer from the High Court (HCCC No. 546/2002) on 23.7.2014

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Martin O. Oluoch & 3 others v Board of Management Kenyatta National Hospital & another [2016] KEELRC 395 (KLR)", Case Analysis (2016). Cause No. 1854 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/395/eng@2016-11-14

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