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ELRCPartially AllowedCause No 385 of 2018· [2020] KEELRC 427 (KLR)

Edward Otsieka Opiayo v Insurance Regulatory Authority [2020] KEELRC 427 (KLR)

Employment and Labour Relations Court
1 October 2020
OMOnesmus N Makau
5,731 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~23 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded an employee over Kshs. 12 million because his employer fired him without giving him a proper hearing, even though the misconduct claim was valid.

What this practically means

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Executive summary

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The Claimant, employed as Chief Manager Finance from 1.8.2008, was interdicted on half pay on 17.1.2018 following complaints that he referred to the Respondent's Board and the Corporation Secretary, Ms Sawe, as 'rogue' during a Training Committee meeting on 11.1.2018. After appearing before a disciplinary investigations team on 10.7.2018, he was invited to a disciplinary hearing before the HR Committee on 31.7.2018 but was locked out of the meeting and dismissed on 3.8.2018 for gross misconduct. He challenged both the interdiction and the termination as procedurally unfair and sought reinstatement and damages. The court framed three issues: legality of the interdiction, fairness of the termination, and entitlement to reliefs. It upheld the interdiction as compliant with Clause 16.5 of the HR Manual, holding that investigations need not precede interdiction and that the six-month overrun was excusable owing to the expiry of the Board's term. On the reason for dismissal, the court found the respondent proved on the investigations evidence that the claimant uttered abusive and insulting words constituting gross misconduct under section 44(4)(d) of the Employment Act, though not insubordination. On procedure, however, it held that the investigations process was not the hearing required by section 41 of the Employment Act; the claimant was denied access to the investigations report and was locked out of the HR Committee hearing, rendering the dismissal unfair under section 45. The court declared the termination unfair, declined reinstatement for want of special circumstances and practicability under section 49(4), and awarded notice pay of Kshs. 2,184,750, ten months' compensation of Kshs. 7,282,500, Kshs. 1,260,432.69 for 45 accrued leave days and Kshs. 1,645,162 withheld half salary, totalling Kshs. 12,372,844.69, with costs and interest at court rates, subject to statutory deduction.

Key legal issues

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01

Whether interdiction contrary to the HR Manual

Holding

Interdiction complied with Clause 16.5; investigations need not precede interdiction and the 6-month overrun was excusable

Reasoning

Clause 16.5 empowers the CEO or Board to interdict to pave the way for investigations; it does not require prior investigation or hearing. The general promptness principle in Clause 16.2.5 was exceeded because the Board's term expired in January 2018 and a new board was only constituted in June 2018, which the court found excusable.

p. 4
02

Validity and fairness of the reason for termination

Holding

Reason held valid and fair: abusive and insulting language amounting to gross misconduct under section 44(4)(d), though not insubordination

Reasoning

Statements collected by the Investigations Team showed the claimant used the word 'rogue' in reference to the Board and Ms Sawe, and he admitted offending her and apologised. The employer genuinely believed the reason existed and a reasonable employer could dismiss for such words. However, no disobedience of a lawful command was shown, so insubordination was not proved.

p. 5
03

Fairness of the procedure followed

Holding

Procedure unfair: claimant denied hearing before the HR Committee and Board and denied access to the investigations report

Reasoning

Section 41 of the Employment Act requires a hearing before termination on grounds of misconduct. An investigation is not the hearing contemplated; the claimant was invited to a disciplinary hearing on 31.7.2018 but was locked out, and was never shown the investigations report. The court inferred haste to dismiss because he had filed suits against the respondent.

p. 6
04

Remedies

Holding

Declaration of unfair termination granted; reinstatement declined; compensation, notice pay, leave and withheld salary awarded

Reasoning

Under section 49(4) reinstatement requires special circumstances and practicability, absent here given the acrimonious relationship. Compensation of 10 months' salary balanced the 10 years of service against the claimant's contributory misconduct. Notice pay followed the HR Manual, and the withheld half salary was refunded.

p. 7

Legal principles established

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  • A disciplinary investigation is not equivalent to the disciplinary hearing mandated by section 41 of the Employment Act; an employee must be heard by the appointing authority before punishment is inflicted.
  • An employee has a right to see and interrogate an investigations report before being condemned on it.
  • The court will not substitute its judgment for that of the employer on whether conduct deserved dismissal unless no reasonable employer could have dismissed in similar circumstances.
  • Failure to accord a hearing by the HR Committee and the Board before dismissal renders the termination unfair under section 45 of the Employment Act.

Court orders

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  1. 1.Declaration that the termination of the claimant's employment was unfair and unlawful
  2. 2.Award of 3 months' salary in lieu of notice of Kshs. 2,184,750
  3. 3.Award of 10 months' salary as compensation for unfair termination, Kshs. 7,282,500
  4. 4.Award for 45 accrued leave days of Kshs. 1,260,432.69
  5. 5.Refund of withheld half salary during interdiction of Kshs. 1,645,162
  6. 6.Total judgment of Kshs. 12,372,844.69 subject to statutory deduction
  7. 7.Costs of the suit to the Claimant
  8. 8.Interest at court rates from the date of judgment

Authorities

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Legislation

  • Employment Actsection 45(1) and (2)
  • Employment Actsection 43(1) and (2)
  • Employment Actsection 44(3) and (4)(d)
  • Employment Actsection 41(1) and (2)
  • Employment Actsection 42(1)
  • Employment Actsection 47(5)
  • Employment Actsection 49(1) and (4)
  • Human Resource Management Policies and Procedures Manual (Respondent)Clauses 16.2.5, 16.3, 16.4.1–16.4.4, 16.5.1–16.5.3, 16.9, 16.10, 11.2.5, 10.3 read with 10.2.1, 15.22
  • ELRC Procedure RulesRule 28(3)

Cases cited (11)

  • Evans Kamadi Misango v Barclays Bank of Kenya Ltd
    [2015] eKLR
  • Josephine Ngatia v The Executive Director of the Non-Governmental Co-ordination Board & another
  • Henry Musemate v The Public Service Commission and another
  • David Githinji Kibuge v New Kenya Co-operative Creameries Ltd (KCC)
    [2019] eKLR
  • Bamburi Cement Limited v William Kilonzi
    [2016] eKLR
  • Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 Others
    [2019] eKLR
  • National Bank of Kenya v Samuel Nguru Mutonya
    [2019] eKLR
  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
  • Standard Group Limited v Jenny Luesby
    [2018] eKLR
  • Kenfreight (E. A) Limited vs Benson K. Nguti
    [2016] eKLR
  • Sims v. the Board of Trustees Holly Springs Municipal Separate District School
    414 SO. 2d 431 [Miss. 1982]
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act (suit for unfair termination; reliefs sought under sections 45 and 49 of the Employment Act)

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, "Edward Otsieka Opiayo v Insurance Regulatory Authority [2020] KEELRC 427 (KLR)", Case Analysis (2020). Cause No 385 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2020/427/eng@2020-10-01

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