Ouma v Astrazeneca Pharmaceuticals Limited (Cause 429 of 2017) [2022] KEELRC 1596 (KLR)
The bottom line
#A Kenyan court ruled an employer's dismissal unfair because it barred the employee's chosen witnesses and skipped its own investigation policy, awarding her compensation.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the summary dismissal
The dismissal was procedurally unfair because the respondent refused to allow the claimant to call the external witnesses of her choice and failed to conduct investigations before the disciplinary hearing as required by its own policy.
Section 41 of the Employment Act is mandatory. The respondent's own disciplinary policy did not limit the category of witnesses an employee may call, and limiting witnesses would offend articles 41 and 50 of the Constitution. Further, clause 7.2 of the policy required an investigation before a disciplinary enquiry; the suspension letter was investigatory yet no investigations were conducted. The unexplained rush to discipline inferred malice and bad faith, rendering the process unfair.
Substantive fairness of the summary dismissal
The dismissal was substantively unfair because the respondent failed to prove valid and fair reasons, having skipped the investigatory mechanism and having used the allegations of misappropriation and intention to defraud interchangeably.
Sections 43, 45 and 47(5) place the burden on the employer to prove the reasons, their validity and fairness. The respondent disregarded its own policy mechanism for sieving allegations, depriving the reasons of validity. The respondent's material was unclear whether the claimant misappropriated funds or intended to defraud. The claimant's unchallenged evidence that accounts reconciled and that the finance team exonerated her undermined the reasons for dismissal.
Appropriate test for substantive fairness
The court declined to adopt the 'reasonable employer test' (range of reasonable responses), preferring a broader approach rooted in the Employment Act, the Constitution and the Fair Administrative Action Act that considers both perspectives.
Counsel urged the reasonable employer test from CFC Stanbic Bank and British Leyland v Swift. The court held that the Employment Act, being constitutionally and equity spirited, and articles 41, 47 and 50 of the Constitution together with the Fair Administrative Action Act require an approach considering both employer and employee perspectives, applying its earlier decisions in Lilian Muchungi and Dominic Otieno Ooko and the South African decision in Sidumo.
Entitlement to reliefs
The claimant was awarded nine months' gross salary as compensatory award under section 49(1)(c) and one month's salary in lieu of notice, plus a declaration of unfair dismissal and costs; other heads failed for want of evidence.
The compensatory award under section 49(1)(c) is discretionary. The court considered the circumstances of her departure from her earlier employer, the substantive and procedural unfairness, the respondent's unexplained non-adherence to its own policies, and the short length of employment, settling on nine months' gross salary. Notice pay followed from the finding of unfair dismissal. Allowances, loss of career damages and general/aggravated/exemplary damages failed for want of evidence.
Legal principles established
#- The procedure under section 41 of the Employment Act is mandatory and non-adherence renders a termination or summary dismissal unfair under section 45(2)
- An employer's policy limiting an employee to a particular category of witnesses at a disciplinary hearing is unconstitutional as offending articles 41 and 50 of the Constitution
- An employer's human resource policy and procedures become part of the contract of employment and non-adherence equates a breach of contract
- Fairness of a dismissal is determined on all the evidential material before the court, not only what was before the employer, adopting an approach that considers both employer's and employee's perspectives
Court orders
#- 1.Compensation pursuant to section 49(1)(c) of the Employment Act of Kshs 925,246
- 2.One month's salary in lieu of notice, Kshs 98,361.00
- 3.Interest on the compensatory award and salary in lieu of notice at court rates from the date of judgment till full payment
- 4.A declaration that the summary dismissal was unfair
- 5.Costs of the suit to the claimant
- Jurisdiction invoked
- Article 162(2) of the Constitution read with the Employment Act (court established to hear employment and labour disputes); suit commenced by memorandum of claim under the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ouma v Astrazeneca Pharmaceuticals Limited (Cause 429 of 2017) [2022] KEELRC 1596 (KLR)", Case Analysis (2022). Cause No 429 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/1596/eng@2022-05-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.