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ELRCPartially AllowedNot stated in the judgment text provided· [2022] KEELRC 1310 (KLR)

Chang'awa v Gertrude’s Children Hospital (Cause 2203 of 2016) [2022] KEELRC 1310 (KLR)

Employment and Labour Relations Court
6 July 2022
4,796 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a hospital pharmacist over Kshs.4 million because, even though his misconduct was proven, his employer skipped the fair hearing the law requires.

What this practically means

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Executive summary

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The Claimant, employed by the Respondent hospital from 1992 and risen to Pharmacy Supplies Officer, was suspended on 19th February 2016 over irregular payments to Omaera Pharmaceuticals, issued a notice to show cause on 5th April 2016 for receiving two invoices (CNV08975 and CNV08962) containing drugs not stocked at the hospital, and summarily dismissed on 15th April 2016 after a disciplinary hearing he did not attend, at which his chosen union representative (Mr. Patrick Mwaniki) did not sign the minutes. His appeal was dismissed on 4th May 2016. The Respondent filed its response late, in February 2019, and filed no submissions. The court found the Respondent proved a valid and fair reason for dismissal on a balance of probability — the Claimant admitted receiving drugs without confirming with the system or physical LPO and could not substantiate his claim that a colleague, Thaddeus Onindi, had ordered them. However, the disciplinary process fell short of the mandatory procedure under Section 41 of the Employment Act: the minutes did not record the Claimant's absence, the reading of charges, his representative's representations, or the committee's deliberations, rendering the dismissal procedurally flawed. Awards followed: house allowance of Kshs.3,579,897.60 (15% of basic pay for 24 years per Grain Pro Kenya), notice pay of Kshs.331,472 (four months per the CBA), outstanding salary of Kshs.142,947.60, and compensation of two months' salary (Kshs.190,596.40) under Section 49(1)(c), reduced because the Claimant substantially contributed to his dismissal. Total award Kshs.4,244,913.60, plus costs, interest, and a certificate of service within 30 days. Reinstatement and the claimed 12 months' compensation were not granted.

Key legal issues

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01

Whether the Respondent had a valid and fair reason to dismiss the Claimant

Holding

Yes — the Respondent proved on a balance of probability that the Claimant was negligent in receiving drugs without confirming with the system or physical LPO.

Reasoning

The Claimant admitted receiving invoices CNV08975 and CNV08962 without confirming details with the physical LPO or system, and the drugs were not stocked at the hospital. His explanation that a colleague, Thaddeus Onindi, had ordered the drugs was unsubstantiated as Onindi was neither called as a witness nor did the Claimant obtain a statement from him. Receipt of goods without confirmation constituted negligence under paragraph 24(d) of the CBA.

p. 7
02

Whether the termination procedure was fair under Section 41 of the Employment Act

Holding

No — the Respondent failed to demonstrate full compliance with the mandatory procedure under Section 41.

Reasoning

The disciplinary hearing minutes made no mention of the Claimant or why he did not attend, no reference to the charges being read in the presence of his chosen representative (Mr. Patrick Mwaniki), who did not sign the minutes, and no record of the representative's representations or the committee's deliberations. The minutes appeared to be a report rather than an itemised discussion, and the decision to dismiss appeared predetermined.

p. 9
03

Entitlement to house allowance, notice pay, outstanding salary and compensation

Holding

House allowance of 15% of basic salary for 24 years, four months' notice pay per the CBA, outstanding salary for one month and 15 days, and compensation equivalent to two months' salary were awarded.

Reasoning

Section 31 of the Employment Act places the duty of housing on the employer; the payslip showed no house allowance entry and the Respondent tendered no evidence of salary. The CBA provided four months' notice for employees with ten or more years' service. Salary was unpaid from suspension to termination. Compensation was reduced to two months because the Claimant substantially contributed to the dismissal and failed to prosecute his appeal.

p. 11

Legal principles established

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  • For a termination of employment to pass the fairness test, it must be founded on a valid and fair reason and the procedure must be fair.
  • Section 41 of the Employment Act sets out a mandatory process of notification and hearing before termination on grounds of misconduct.
  • Where there is no credible evidence of salary, 15% of basic salary is a reasonable house allowance.

Court orders

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  1. 1.House allowance of Kshs.3,579,897.60
  2. 2.Notice pay of Kshs.331,472.00
  3. 3.Outstanding salary of Kshs.142,947.60
  4. 4.Equivalent of two (2) months' salary as compensation Kshs.190,596.40 (total award Kshs.4,244,913.60)
  5. 5.Costs of the suit to the Claimant
  6. 6.Interest at court rates till payment in full
  7. 7.Certificate of service to issue within 30 days

Authorities

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Legislation

  • Employment ActSection 43
  • Employment ActSection 45(2)
  • Employment ActSection 47(5)
  • Employment ActSection 41
  • Employment ActSection 44(4)(b) and 44(4)(c)
  • Employment ActSection 49(1)(c)
  • Employment ActSection 31
  • Employment ActSection 36
  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 48
  • Civil Procedure ActSection 1B
  • Civil Procedure RulesOrder 21 Rule 1
  • Memorandum of Agreement between Gertrude's Children's Hospital and KUDHEIHAParagraphs 23 and 24(d)

Cases cited (9)

  • Walter Ogal Anuro v Teachers Service Commission
    [2013] eKLR
  • Anthony Mkala Chitavi v Malindi Water & Sewerage Company Ltd
    [2013] eKLR
  • Peter Otabong Ekisa v County Government of Busia
    [2017] eKLR
  • Nicholas Otinyu Muruka v Equity Bank Limited
    [2013] eKLR
  • Grain Pro Kenya Inc. Ltd v Andrew Waithaka Kiragu
    [2019] eKLR
  • Abisalom Ajusa Magomere v Kenya Nut Company Limited
    [2014] eKLR
  • Pius Machafu Isindu v Lavington Security Guards Limited
    [2017] eKLR
  • Postal Corporation of Kenya v Andrew K. Tanui
    [2019] eKLR
  • Robai Musinzi v Safdar Mohamed Khan
    [2012] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (Sections 41, 43, 45, 47(5), 49(1)(c) applied)

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, "Chang'awa v Gertrude’s Children Hospital (Cause 2203 of 2016) [2022] KEELRC 1310 (KLR)", Case Analysis (2022). Not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1310/eng@2022-07-06

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