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ELRCAllowedCause No. 276 of 2018· [2019] KEELRC 615 (KLR)

Jonah Mwaura Ngugi v Safaricom PLC [2019] KEELRC 615 (KLR)

Employment and Labour Relations Court of Kenya
23 September 2019
4,488 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~18 min to read original · ~4 min brief

The bottom line

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Safaricom's employee won Ksh.3.29 million because the company couldn't prove negligence or follow fair dismissal procedures.

What this practically means

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Executive summary

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The claimant, formerly an Area Sales Manager of the respondent, sued for a declaration that his summary dismissal was unfair, damages, and costs. The respondent did not enter appearance, file a defence or attend the hearing, so the claim proceeded undefended under Rule 15 of the ELRC (Procedure) Rules, 2016. The claimant was dismissed in June 2018 on grounds of negligence and improper performance of duty relating to distribution, activation and monitoring of sub-reg devices, the employer alleging 466 devices worth Ksh.2,819,580 were unaccounted for, later narrowed to 151 devices worth Ksh.913,641. The court framed two issues: whether the termination was unlawful and unfair, and whether remedies should issue. Relying on sections 41, 43, 44 and 45 of the Employment Act, 2007, and authorities including Chitavi, Nyandiko, Mukala, and the South African Transnet case on gross negligence, the court held that negligence required proof of reckless or extreme deviation from the reasonable standard, that the claimant had accounted for all devices save 151 with reasonable explanations, and that no audit identified misuse. Termination for improper performance also required appraisals, none existing. The dismissal was found substantively unfair under section 45; procedural compliance could not cure the lack of substantive justification. Applying section 45(5) factors and the claimant's exemplary record, the court awarded maximum compensation of twelve months' gross salary, Ksh.3,290,083.92, plus costs, with dues subject to section 49(2).

Key legal issues

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01

Whether the summary dismissal was substantively justified on grounds of negligence and improper performance of duty

Holding

The dismissal was not justified; the claimant accounted for all but 151 of 2,780 devices and took reasonable steps to safeguard them, and the employer produced no audit identifying misuse of the devices.

Reasoning

The claimant kept records of all devices issued, filed defences during the disciplinary process, accounted for 315 of the 466 devices and offered explanations for the rest, including reliance on outsourced TDRs and unlocked devices usable on competitor networks. The employer offered no audit identifying which devices were misused. Negligence required proof of reckless, extreme deviation from the reasonable standard, which was absent. Uncontested, the claimant's account stood unrebutted.

p. 4
02

Whether the summary dismissal complied with sections 41, 43, 44 and 45 of the Employment Act, 2007

Holding

The dismissal was unfair under section 45; the employer failed to give due consideration to the claimant's defence and did not substantiate a valid and fair reason.

Reasoning

Summary dismissal is regulated by sections 44(3) and (4) with section 41(2), requiring notification of charges and a hearing. Though a disciplinary process and appeal existed, the court found the claimant's defence and explanations were not considered on their merits. Without proof of valid reason, procedure could not save the dismissal.

p. 5
03

Whether the claimant was entitled to compensation of 12 months' gross salary under section 49

Holding

Maximum compensation of 12 months' salary (Ksh. 3,290,083.92) awarded, given his excellent performance record, accolades and difficulty securing comparable employment.

Reasoning

Applying section 45(5) factors, the court noted the claimant's exemplary record evidenced by Hongera Awards, the unproven nature of the accusations, and the reputational damage affecting his employability. He only secured new employment shortly before the hearing at lower pay, justifying the maximum award.

p. 5

Legal principles established

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  • Before summary dismissal can issue, the employee must be notified of the charges and allowed a defence, which must be considered on its merits before the sanction issues.
  • An employer alleging negligence must prove that the employee foresaw risk and recklessly failed to avoid it, or deviated so radically from the standard of the reasonable person as to amount to gross negligence.
  • Termination for poor performance requires the employer to have put in place performance evaluation measures and to have conducted an appraisal; in the absence of such proof, termination is unfair.
  • Due process cannot justify an unlawful and unfair termination; procedural compliance is rendered irrelevant where there is no substantive justification.

Court orders

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  1. 1.Judgment entered for the claimant against the respondent
  2. 2.Compensation of Ksh. 3,290,083.92 awarded (equivalent to 12 months' gross salary)
  3. 3.Costs of the suit awarded to the claimant
  4. 4.Dues payable to be subject to section 49(2) of the Employment Act, 2007
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment and Labour Relations Court Act and the Employment Act, 2007; proceedings under the Employment and Labour Relations Court (Procedure) Rules, 2016

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, "Jonah Mwaura Ngugi v Safaricom PLC [2019] KEELRC 615 (KLR)", Case Analysis (2019). Cause No. 276 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/615/eng@2019-09-23

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