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ELRCPartially AllowedCause No E287 of 2021· [2023] KEELRC 952 (KLR)

Wambua v Aga Khan University Hospital (Cause E287 of 2021) [2023] KEELRC 952 (KLR)

Employment and Labour Relations Court
27 April 2023
6,186 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled that firing an employee for poor performance without a disciplinary hearing is unfair, awarding five months' salary as compensation.

What this practically means

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Executive summary

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This is an Employment and Labour Relations Court decision by B. O. M. Manani, J, delivered on 27th April 2023, in a claim for unlawful termination. The Claimant, engaged as a Business Development Manager (the Respondent said Business Development and Operations Manager) and terminated on 21st October 2020, alleged termination on grounds of poor performance and misinformation about co-employees that lacked both substantive and procedural fairness, discrimination in pay and handling of complaints, and improper computation of terminal dues following a Covid-19 salary reduction. The Respondent maintained the separation was lawful, citing the Claimant's refusal to sign a November 2019 Performance Improvement Plan and false accusations against colleagues. The court framed the issues as whether the termination was for valid reason and by fair procedure, whether the Claimant was discriminated against, and entitlement to reliefs. The court held that although the Respondent may have had prima facie reasons based on the Claimant's 2019 performance, it breached its own PAP Manual by placing him on PIP without Performance Review Committee ratification, and breached section 41 of the Employment Act by failing to convene a disciplinary hearing, rendering the termination procedurally unfair. Discrimination was not proved; the salary disparities were reasonably explained and unchallenged. Invoking the doctrine of avoidance, the court declined to decide the constitutional fair labour practices question. The consented Covid-19 salary reduction was held binding, so no refund was ordered. Reinstatement was declined as impracticable given strained relations. The court awarded five months' gross salary (Ksh. 1,522,500/=) as compensation, interest at court rates, and costs to the Claimant.

Key legal issues

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01

Whether termination was procedurally fair

Holding

The termination was procedurally unfair because no disciplinary hearing was convened

Reasoning

Section 41 of the Employment Act requires notification of the charge and a chance to respond, ordinarily through a disciplinary hearing. The Respondent's internal Employee Discipline Procedure Manual (clause 5.4) also contemplated a hearing. The meetings with the Regional HR Director did not amount to a hearing. No disciplinary session was convened before the termination letter of 21st October 2020.

p. 8
02

Whether the placement on PIP without Performance Review Committee approval invalidated the process

Holding

The November 2019 PIP was issued outside the PAP Manual procedure and the Claimant was entitled to resist signing it

Reasoning

Under clauses 5.7 and 6.9 of the PAP Manual, a PIP may only follow a final rating of 'fair/marginal/unsatisfactory' ratified by the Performance Review Committee. The Claimant was rated 'competent' in 2018 and no fresh evaluation was presented to the Committee. Continuous evaluation does not permit arbitrary, haphazard reviews.

p. 6
03

Whether the Claimant suffered discrimination

Holding

No discrimination established; the Respondent accounted for salary disparities and the Claimant provided no comparative performance data

Reasoning

To establish discrimination the Claimant needed comparative data on co-employees' performance, which was not provided. The Respondent explained salary variances by reference to longevity of service and other factors, and that explanation was unchallenged. The flawed handling of the harassment complaint was not shown to be motivated by prejudice.

p. 9
04

Whether the Covid-19 salary reduction was lawful

Holding

The salary reduction was a binding consensual contract variation and no refund is payable

Reasoning

Sections 10(5) and 19 of the Employment Act permit contractual variation and certain deductions. The Claimant signed authorities on 7th May and 13th August 2020 consenting to the extension of the salary reduction, and no plea of duress, mistake, undue influence or misrepresentation was made. The court cannot rewrite the parties' agreement.

p. 10
05

Whether reinstatement should be ordered

Holding

Reinstatement declined in favour of compensation of five months' gross salary

Reasoning

Section 49 of the Employment Act allows reinstatement but only in exceptional circumstances as a remedy of last resort. The strained relations between the Claimant and co-employees, the Claimant's contribution to the circumstances of separation and the Respondent's firm opposition rendered reinstatement impracticable.

p. 11

Legal principles established

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  • An employer who terminates employment must afford the employee a hearing at a disciplinary session as required by section 41 of the Employment Act
  • An employer is bound to follow its own internal procedures (such as a Performance Review Committee ratification) before placing an employee on a Performance Improvement Plan
  • Parties to an employment contract may lawfully agree to reduce salary if they consult, reduce the arrangement to writing and notify the employee in writing
  • Where adequate statutory remedies exist under the Employment Act, a court should apply the doctrine of avoidance and decline to determine constitutional questions

Court orders

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  1. 1.Declaration that the Respondent's decision to terminate the Claimant's employment is procedurally unfair
  2. 2.Compensation for unfair termination equivalent to gross salary for five (5) months, Ksh. 1,522,500/=, in lieu of reinstatement, subject to applicable statutory deductions
  3. 3.Interest at court rates from the date of judgment
  4. 4.Costs to the Claimant

Authorities

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Legislation

  • Employment Actsection 41
  • Employment Actsection 43
  • Employment Actsection 49
  • Employment Actsection 5
  • Employment Actsection 17
  • Employment Actsection 19(1)(g) and (h)
  • Employment Actsection 10(1), (2) and (5)
  • Employment and Labour Relations Court Actsection 12

Cases cited (5)

  • Naima Khamis v Oxford University Press (E.A) Ltd
    [2017] eKLR
  • Moki Muithya v Kitui Flour Mills Limited
    [2021] eKLR
  • KKB v SCM & 5 others
    (Constitutional Petition 014 of 2020) [2022] KEHC 289 (KLR)
  • Five Forty Aviation Limited v Erwan Lanoe
    [2019] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
Jurisdiction invoked
Sections 41, 43, 45, 49 of the Employment Act; section 12 of the Employment and Labour Relations Court 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, "Wambua v Aga Khan University Hospital (Cause E287 of 2021) [2023] KEELRC 952 (KLR)", Case Analysis (2023). Cause No E287 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/952/eng@2023-04-27

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