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ELRCPartially AllowedNot stated in the judgment· [2022] KEELRC 118 (KLR)

Omusamia v Stima Investment Co-operative Society Limited (Cause E583 of 2020) [2022] KEELRC 118 (KLR)

Employment and Labour Relations Court
28 April 2022
3,433 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that even with valid reasons for firing an employee, skipping a fair hearing makes the dismissal unlawful and compensable.

What this practically means

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Executive summary

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The claimant, employed as an ICT Manager from 1st March 2011 on fixed-term contracts, was summarily terminated on 10th February 2020 on grounds of poor performance and professional negligence, mid-way through a three-year contract running from 17th June 2019. He sought compensatory damages of Kshs 2,592,000.00 and a declaration that the termination was illegal, unlawful, unfair and inhumane. The respondent attributed losses of Kshs 554,700.00 to his failures: not renewing the SSL licence, not activating antivirus software leading to a ransomware attack, and failing to undertake daily backups, so that the only available backup dated 8th August 2019. The court framed three issues: validity of the reason, fairness of the procedure, and reliefs. On substance, it found the lapses fell squarely within the claimant's docket and were not refuted in cross-examination; prior warnings and cautions existed; the respondent therefore had a valid and fair reason for termination. On procedure, however, the respondent led no evidence of notice of reasons, a show-cause invitation or a disciplinary hearing; the abrupt termination offended section 41 of the Employment Act and natural justice, and was unlawful under section 45(2)(c). The court also held that probation could not displace fair-hearing safeguards for an employee of nearly nine years' standing. Balancing the findings, the court awarded compensatory damages equivalent to two months' gross salary, Kshs 432,000.00, with interest at court rates from the date of judgment and costs of the suit to the claimant. The claim was thus partially allowed: the procedure was condemned but the full quantum and a declaration of substantive unfairness were refused.

Key legal issues

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01

Whether there was a valid and fair reason for termination

Holding

Yes - poor performance and professional negligence were proved, as the system lapses fell within the claimant's docket and he did not refute the allegations in cross-examination

Reasoning

The claimant, as ICT Manager, was responsible for antivirus activation, SSL licence renewal and daily backups. The letter of termination detailed these failures. In cross-examination he admitted being in charge of backups and that the cloud data was corrupted with no physical backup. Prior warnings and cautions for negligence and insubordination existed. The ransomware attack was thus the culmination of established lapses attributable to him.

p. 5
02

Whether the termination followed fair procedure under section 41

Holding

No - the respondent adduced no evidence of notification of reasons, an invitation to explain, or a disciplinary hearing

Reasoning

Section 41 requires the employer to explain the reasons and hear the employee's representations before termination. Despite asserting procedural fairness, the respondent produced no evidence of a show-cause letter or hearing. The termination was abrupt, the CEO acting as complainant, investigator and judge, offending natural justice. The termination was therefore unlawful under section 45(2)(c).

p. 7
03

Whether probation could displace the section 41 safeguards for a long-serving employee

Holding

No - probation is a trial period for new employees; a claimant of nearly nine years' service was entitled to full fair-hearing safeguards

Reasoning

The claimant's renewed contract provided for a six-month probation, but he had served close to nine years. Nothing remained for discovery or assessment of compatibility. Even where an employer labels a period probation, the employee remains protected by section 41. The court relied on Monica Munira Kibuchi for this proposition.

p. 6
04

What reliefs avail on a finding of procedural unfairness

Holding

Compensatory damages equivalent to two months' gross salary, reflecting the claimant's own contribution to the termination

Reasoning

Having found substantive reasons valid but procedure flawed, the court exercised its discretion under the Employment Act to award compensation. The quantum was tempered by the claimant's own negligence which contributed to the termination. No declaratory relief on substantive unfairness or the full claimed sum of Kshs 2,592,000 was granted.

p. 7

Legal principles established

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  • An employer must prove the reason or reasons for termination, failing which the termination is deemed unfair under section 45 of the Employment Act.
  • An employee on purported probation who has served for years retains entitlement to the fair hearing safeguards under section 41 of the Employment Act.
  • Probation is meant for newly recruited employees to assess ability and compatibility, not for a long-serving employee on a renewed contract.
  • Procedural fairness must attach to the fresh disciplinary allegations leading to termination; compliance in earlier incidents does not suffice.

Court orders

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  1. 1.Judgment entered in favour of the claimant against the respondent in the sum of Kshs 432,000.00
  2. 2.The amount shall attract interest at court rates from the date of Judgment until payment in full
  3. 3.The claimant shall have the costs of the suit
Jurisdiction invoked
Original employment and labour relations jurisdiction of the Employment and Labour Relations Court under 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, "Omusamia v Stima Investment Co-operative Society Limited (Cause E583 of 2020) [2022] KEELRC 118 (KLR)", Case Analysis (2022). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/118/eng@2022-04-28

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