Dinah Jemelly Kirwa v National Hospital Insurance Fund & another [2021] KEELRC 440 (KLR)
The bottom line
#Kenya's Employment Court awarded a sacked director over Kshs. 13 million because her employer followed no fair process and proved no real misconduct.
What this practically means
#Executive summary
#Key legal issues
#Whether there was a valid and fair reason for termination
The respondent failed to prove a valid and fair reason; the claimant was not to blame for the recruitment of the 87 employees
The 65 staff were recruited by the CEO while the claimant was on leave, which Rw1 admitted. The 22 drivers were recruited with express written authority of the CEO under clause 1.5 delegating Board powers to the CEO, consistent with Mwongozo clause 1.2(k). Need assessment and the historical policy of recruiting drivers from a database were not rebutted. The alleged loss of Kshs. 106 Million was contradicted by the audit report figure of Kshs. 8.7 Million.
Whether fair procedure was followed in the disciplinary process
Procedure was unfair and unlawful: the Board Chairperson, with no mandate, initiated, conducted and concluded the disciplinary process through an ad-hoc committee of the Board
The HR Manual reserved the disciplinary process to the supervisor, SAC and MEAC, with the Board's role appellate only. Mwongozo clauses 1.2 and 1.4 demarcate oversight and policy roles for the Board and Chairperson, with no executive or operational powers. Clause 1.7 on ad-hoc committees provided no window for original disciplinary power. The ad-hoc committee's final verdict also extinguished the claimant's right of appeal.
Whether the claimant was entitled to reinstatement
Reinstatement refused as impracticable; damages under section 49 awarded instead
The three-year contract commencing 1st July 2018 had lapsed by the date of judgment (last working day would have been 30th June 2021), and the claimant's position had been abolished after restructuring. In line with section 49(4) factors and the common law bar on specific performance of service contracts, damages were the appropriate remedy.
Legal principles established
#- Termination is unfair unless the employer proves a valid and fair reason and fair procedure under section 45 of the Employment Act
- A Board and its Chairperson exercising executive or operational disciplinary powers over management staff acts ultra vires where such powers are not conferred by law, Mwongozo or the contract
- Where the same body acts as complainant, investigator, prosecutor and judge, and the right of appeal is thereby extinguished, the disciplinary process is unfair
- Reinstatement is an order of specific performance granted only in exceptional circumstances
Court orders
#- 1.Declaration that the claimant's dismissal was unfair and unlawful
- 2.Award of three months' salary in lieu of notice of Kshs. 1,979,805
- 3.Compensation for unfair termination of 12 months' salary being Kshs. 7,919,220
- 4.Gratuity under clause 15 of the contract being Kshs. 2,083,200
- 5.Cash in respect of 65 unutilized leave days being Kshs. 1,200,000
- 6.Total award of Kshs. 13,182,225 subject to statutory deductions
- 7.Costs of the suit to the claimant plus interest at court rates from the date of judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction under the Employment Act (first-instance employment claim); no specific constitutional article invoked
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dinah Jemelly Kirwa v National Hospital Insurance Fund & another [2021] KEELRC 440 (KLR)", Case Analysis (2021). Not stated in judgment (Claim filed 2nd October 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/440/eng@2021-11-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.