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ELRCPartially AllowedCause No 1515 of 2017· [2019] KEELRC 557 (KLR)

Henry Owino Obonyo v Alloice Odhiambo Lumutu & another [2019] KEELRC 557 (KLR)

Employment and Labour Relations Court of Kenya
9 October 2019
7,609 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 Kenya Airways unfairly sacked two staff who were never given the audit report their case was built on, awarding pay and reinstatement.

What this practically means

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Executive summary

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Two former Kenya Airways employees, a Manager in Procurement and a Senior Licensed Aircraft Engineer, challenged the termination of their employment following a Deloitte forensic audit. They alleged that they were denied the forensic audit report, that the disciplinary panels were improperly constituted, that charges in the termination letters did not match those in the show cause letters, and that internal appeal processes were tainted by overlap between panel and appellate personnel. The court framed three issues: validity of reasons for termination, procedural fairness, and remedies. On the evidence, the court found no valid reasons for termination. The 2nd Claimant was cleared of any directorship or employment with Henpen Aviation Consulting Services, and the disciplinary panel itself exonerated him on Buseka Investments. The 1st Claimant was exonerated of most charges, including the confidentiality charge later relied upon in his termination letter, and the forensic report forming the basis of the process was never produced in court and reached the Respondent only after the terminations. On procedure, the court found breaches of section 4(3)(a) and (g) of the Fair Administrative Action Act and improper panel composition under section 7(2)(a), concluding that neither Claimant received a fair disciplinary hearing, making the terminations unfair under section 45(2) of the Employment Act. On remedies, the court reinstated the 2nd Claimant, whose specialised skills and rescinded job offers were proved, and awarded each Claimant 10 months' salary as compensation, plus costs and interest. The 1st Claimant's reinstatement claim failed for want of proof of inability to secure alternative employment. Judgment delivered on 9th October 2019.

Key legal issues

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01

Validity of reasons for termination

Holding

There were no valid reasons to terminate either Claimant; the allegations were not conclusively proved and the forensic audit report was never produced in court or supplied to the Claimants before termination.

Reasoning

The 2nd Claimant was exonerated of any directorship or employment with Henpen, confirmed by Registrar of Companies records, and the disciplinary panel found no conflict of interest in Buseka. The 1st Claimant was exonerated of most charges including the confidentiality charge later cited in the termination letter. The forensic report underpinning the charges was never produced in court and reached the Respondent only after termination.

p. 12
02

Fairness of the disciplinary process

Holding

The disciplinary process was procedurally unfair under section 4(3)(a) and (g) of the Fair Administrative Action Act, and the 2nd Claimant's panel composition was improper under section 7(2)(a).

Reasoning

The Claimants were not given the forensic audit report or the materials relied upon. The show cause letter was issued by an officer contrary to the HR Manual, the Technical Director acted as prosecutor and sat on appeal, and the 2nd Claimant's Controlling Manager did not sit on the panel as the Manual required. These breaches of the FAAA and the Respondent's own manual rendered the hearing unfair.

p. 12
03

Reinstatement

Holding

Reinstatement was awarded to the 2nd Claimant because of his highly specialised skills and proved inability to secure alternative employment; it was refused to the 1st Claimant who did not establish inability to find other work.

Reasoning

The 2nd Claimant, aged 43, proved that two job offers (Jambojet and Salamain) were rescinded because of his termination and that he is trained on aircraft types operated only by the Respondent in Kenya. Reinstatement was therefore the only remedy that would restore him. The 1st Claimant gave no evidence of failed job searches.

p. 13

Legal principles established

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  • An employer must furnish an employee facing disciplinary action with the information, materials and evidence to be relied upon, including any investigative report forming the basis of the charges
  • A termination is unfair where the employer fails to prove a valid reason and a fair procedure, per section 45(2) of the Employment Act

Court orders

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  1. 1.Reinstatement of the 2nd Claimant without loss of salary and benefits with effect from the time of termination, to continue in employment until retirement age or any other good cause
  2. 2.Compensation to the 2nd Claimant equivalent to 10 months' salary (10 x 587,789 = 5,877,890/=) less statutory deductions
  3. 3.Compensation to the 1st Claimant equivalent to 10 months' salary (10 x 347,128 = 3,471,280/=) less statutory deductions
  4. 4.Costs awarded to the Claimants
  5. 5.Interest on the decretal amount with effect from the date of judgment

Authorities

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Legislation

  • Employment Act 2007section 49(1)(c)
  • Employment Act 2007section 41
  • Employment Act 2007section 45(2)
  • Constitution of KenyaArticle 50(2)
  • Fair Administrative Action Actsection 4(3)
  • Fair Administrative Action Actsection 7(2)(a)

Cases cited (18)

  • Moses Ochieng vs. Unilever Kenya Limited
    [2018] eKLR
  • Mary Chemweno Kiptui vs. Kenya Pipeline Company Limited
    [2014] eKLR
  • Peter Njoroge Kibe vs. Teachers Service Commission
    [2017] eKLR
  • Rajab Barasa & 4 Others vs. Kenya Meat Commission
    [2016] eKLR
  • Lawrence Nyamichaba Ondari vs. National Hospital Insurance Fund
    [2018] eKLR
  • Polkey vs. A.E. Dayton Services Limited
    [1987] UKHL
  • Mwanajuma Juma Kunde vs. KAPS Municipal Parking Services Limited
    [2013]
  • British Leyland UK Limited vs. Swift
    [1981] I.R.L.R 91
  • Lawrence Onyango Oduori vs. Kenya Commercial Bank Limited
    [2014] eKLR
  • Kenya Airways Limited vs. Allied & Aviation Workers Union Kenya & 3 Others
    [2014] eKLR
  • CMC Aviation Limited vs. Mohammed Noor
    [2015] eKLR
  • Jimi Masege vs. Kenya Airways Limited
    [2010] eKLR
  • Alphonse Maghanga Mwahanya vs. Operation 680 Limited
    [2013] eKLR
  • Engineer Francis N. Gachuri vs. Energy Regulatory Commission
    [2013] eKLR
  • Elizabeth Wakanyi Kibe vs. Telkom Kenya Limited
    [2014] eKLR
  • D.K. Njagi Marete vs. Teachers Service Commission
    [2013] eKLR
  • Pravin Bowry vs. Ethics & Anti-Corruption Commission
    [2013] eKLR
  • Kenya Ports Authority vs. Silas Obengele
    [2018] eKLR
Jurisdiction invoked
Employment and labour relations jurisdiction over claims of unfair termination under the Employment Act 2007

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, "Henry Owino Obonyo v Alloice Odhiambo Lumutu & another [2019] KEELRC 557 (KLR)", Case Analysis (2019). Cause No 1515 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/557/eng@2019-10-09

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