Eunice Adhiambo Okumu v Pharmakem Limited [2016] KEELRC 1637 (KLR)
The bottom line
#A Kenyan court ruled an accountant's same-day disciplinary hearing and unfair blame for company failures made her dismissal unlawful, awarding six months' salary.
What this practically means
#Executive summary
#Key legal issues
#Substantive fairness of termination
Termination was not based on fair and valid grounds; delay in bank reconciliation was explained by excessive workload unsupported by management, and late payment of installment tax was a collective function of the Directors and External Auditors
The job description made the claimant central to bank reconciliation and tax remittances, but emails evidenced her excessive workload which management did not address. Tax payment was done through her hand but on the advice of Directors and External Auditors; the auditor's letter on installment taxes was addressed to the Directors. Holding her solely responsible for the KRA penalty was therefore improper, and the reasons in the termination letter were not fair and valid.
Procedural fairness under Section 41
Procedure did not conform to the minimum statutory standards of fairness; the hearing was convened the same day, concluded within about two hours, and followed only a 'first warning' issued 12 days earlier, suggesting a preconceived mind
The claimant was notified of the hearing at 2.00 p.m. for a hearing the same afternoon, the decision was made at 4.00 p.m. and communicated the same day. Fair hearing requires sufficient time to prepare, understand the charges and access documentation. Only a first warning dated 10th April 2014 preceded termination 12 days later, supporting the view that the panel acted prematurely and with a preconceived mind.
Panel composition and representation at the hearing
There was no defect in the panel composition despite panelists' prior involvement, and the claimant was not prejudiced by lacking a representative or outside witness
Workplace disciplinary proceedings are not criminal trials; employers with limited officers may use investigating officers on the panel provided they act objectively and impartially. The claimant was advised of her right to a representative but could not secure one; the law does not allow outsiders, and an outside witness would not have assisted her case.
Terminal dues
April 2014 salary, one month's salary in lieu of notice and accrued annual leave were not in dispute and were awarded as conceded; the offer of terminal dues was made but not taken up due to a disagreement over a discharge voucher
The respondent offered Kshs. 130,395 (or 160,690 as conceded totals) including 22 days' April salary, notice pay and accrued leave. Both witnesses agreed the money was offered but the claimant declined to sign a discharge voucher releasing the respondent from further liability. These items were undisputed and were granted.
Legal principles established
#- Incompatibility as a fair termination ground stems from persistent and irrational inability to work with workmates, not from every complaint an employee makes
- An employee who pointed out faults in the employer's accounting system and lacked support cannot be held solely liable for poor performance of duty
- Disciplinary proceedings at the workplace are not criminal trials; panelists closely connected to the dispute must only show objectivity
- A disciplinary hearing conducted and concluded within about two hours cannot satisfy the fair-hearing requirement of sufficient time to prepare and understand the charges
Court orders
#- 1.Declaration that termination was unfair
- 2.Respondent to pay within 30 days 6 months' salary in compensation at Kshs. 474,168 and terminal dues conceded at Kshs. 160,690, total Kshs. 634,858
- 3.No order on costs and interest
- Jurisdiction invoked
- Article 162(2) of the Constitution / Industrial Court Act - jurisdiction over employment and labour relations disputes (inferred from court's nature); Rule 27(1)(a) of the Industrial Court (Procedure) Rules 2010 invoked for the Award
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Lydia Limbe v Akili Dada [2022] KEELRC 951 (KLR)[2022] KEELRC 951 (KLR)31 Jan 2022applied
Cite this brief
#Cite this brief
Caselaw, "Eunice Adhiambo Okumu v Pharmakem Limited [2016] KEELRC 1637 (KLR)", Case Analysis (2016). Cause Number 374 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1637/eng@2016-02-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.