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ELRCPartially AllowedELRC Claim dated 1st December 2014 (Nairobi)· [2023] KEELRC 2899 (KLR)

Kasina & another v Kenya Hospital Association t/a The Nairobi Hospital & another (Cause 2140 of 2014) [2023] KEELRC 2899 (KLR)

Employment and Labour Relations Court
15 November 2023
6,730 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan court awarded a dismissed Financial Controller 12 months' salary because the hospital fired him without a genuine hearing, confirming employer disciplinary processes cannot be pre-decided.

What this practically means

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Executive summary

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The Claimant, employed as Financial Controller from 1st October 2012, sued the Respondent Hospital for unfair, unlawful and unprocedural termination following his summary dismissal on 14th October 2014 after discrepancies exceeding Kshs. 124 million were discovered in the Respondent's cash collection account. He alleged he was punished for exposing the fraud, kept on indefinite suspension for 153 days, subjected to a predetermined disciplinary process, and denied a fair hearing after his request for a short adjournment was ignored. The Respondent countered that the dismissal was for gross misconduct - negligence in failing to maintain effective internal controls - that due process and natural justice were followed, and it counterclaimed for declarations that section 41 of the Employment Act contravened Articles 27 and 40 of the Constitution and that damages under section 49(1)(c) should be curtailed. The court found the show-cause exercise a mere formality, the disciplinary process predetermined, and the termination a foregone conclusion, hence unfair and unlawful. It awarded the maximum compensation of 12 months' salary (Kshs. 6,882,792/-) under section 49(1)(c), a certificate of service, costs, and interest. The claims for 13th salary and medical costs were not granted, and the counterclaim was dismissed in its entirety with no order as to costs, the court holding that section 41 accords with the Constitution and that compensation under section 49(1)(c) is not restricted to the contractual notice period.

Key legal issues

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01

Whether termination was procedurally fair under section 41 of the Employment Act

Holding

The termination was procedurally unfair: the show cause and disciplinary hearing were combined, indicating a predetermined outcome, and the Claimant was not heard.

Reasoning

The court found the Respondent had already determined a disciplinary hearing would follow irrespective of any explanation, so the show cause was a formality. The short notice between the invitation of 8th October 2014 and the hearing on 13th October 2014 made it impossible for the Claimant to mount a defence, and his request for a short adjournment was ignored. The termination therefore violated section 41 and the constitutional right to fair administrative action.

p. 9
02

Whether the counterclaim declarations on the constitutionality of sections 41 and 49 of the Employment Act should issue

Holding

The counterclaim failed in its entirety.

Reasoning

The court held section 41 accords with Articles 27 and 41 of the Constitution; the 12-month compensation cap is within permissible constitutional restraints and may even be inadequate in egregious cases; a finding permitting reinstatement does not bar compensation; and fair administrative action must be substantive, not a ticking-boxes exercise.

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03

Whether the Claimant was entitled to maximum compensation of 12 months' salary

Holding

Yes; the court awarded 12 months' gross salary (Kshs. 6,882,792/-) under section 49(1)(c).

Reasoning

Given the predetermined disciplinary panel, the indefinite suspension, and the failure to accord a fair hearing, the termination was egregious and justified the maximum compensation under section 49(1)(c) read with section 49(4).

p. 9

Legal principles established

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  • Section 41 of the Employment Act accords with the Constitution; failure to hear an employee before termination opens the employer to compensation under section 49 and is not unconstitutional.
  • Compensation under section 49(1)(c) is not limited to the contractual notice period; the statutory cap is 12 months' salary, and malice in dismissal may justify the maximum.
  • A predetermined disciplinary process renders a show-cause exercise a mere formality and the ensuing termination unfair.

Court orders

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  1. 1.A declaration that the termination of the Claimant's employment was unfair and unlawful
  2. 2.Award to the Claimant of Kshs. 6,882,792/- being 12 months' salary as compensation under section 49(1)(c) of the Employment Act
  3. 3.Certificate of service in terms of section 51 of the Employment Act
  4. 4.Costs of the suit to the Claimant
  5. 5.Interest at court rates on the compensation sum from the date of judgment till payment in full
  6. 6.Dismissal of the Respondent's counterclaim with no order as to costs

Authorities

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Legislation

  • Constitution of KenyaArticles 22, 27, 40, 41, 47
  • Employment Act, 2007Sections 41, 43, 44, 45, 46, 49 (including 49(1)(c), 49(3), 49(4)), 51
  • Retirement Benefits Act, No. 3 of 1997Section 46

Cases cited (18)

  • Abraham Gumba v Kenya Medical Supplies Authority
    [2014] eKLR
  • George Onyango Akuti v G4S Security Services Kenya Ltd
  • Munir Sheikh Ahmed v National Bank of Kenya
    [2020] eKLR (Nairobi ELRC Petition No. 117 of 2018)
  • Mokava v Kithure Kindiki t/a Kithure Kindiki & Associates
    [2021] KEELRC 1 (KLR)
  • Kenya Revenue Authority v Reuwel Waithaka Gitahi & 2 others
    [2019] eKLR
  • Kenya Airways Limited v Aviation & Allied Workers Union Kenya & 3 others
    [2014] eKLR
  • Bahari Parents Academy v LBZ (Minor suing through his father and next friend) BNZ
    [2020] eKLR
  • Pheoby Aloo Inyanga v Stockwell One Homes Management Limited & another
    [2022] eKLR
  • Mathew Lucy Cherusa v Poverelle Sisters of Belgamo T/A Blessed Louis Palazzalo Health Centre
    [2013] eKLR
  • Peter Njuguna Chege v Timsales Limited
    [2020] eKLR
  • Dennis Nyagaka Ratemo v Kenya Film Commission & another
    [2014] eKLR
  • Gideon Akwera v Board of Governors Church on the Rock Academy
    [2015] eKLR
  • Banking, Insurance & Finance Union (Kenya) v Barclays Bank of Kenya Ltd
    [2014] eKLR
  • Shadrack Muthiani Kin'goo v Apex Steel Limited
    [2018] eKLR
  • Anytime Limited v Fredrick Mutobera Omuraya
    [2022] eKLR
  • D K Njagi Marete v Teachers Service Commission
    [2020] eKLR
  • Godfrey Julius Ndumba Mbogori & another v Nairobi City County
    [2018] eKLR
  • Okumu Aziz Ramadhan v China Roads and Bridge Corporation (Kenya)
    [2021] eKLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act, 2007 (sections 41, 43, 44, 45, 49 and 51)

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, "Kasina & another v Kenya Hospital Association t/a The Nairobi Hospital & another (Cause 2140 of 2014) [2023] KEELRC 2899 (KLR)", Case Analysis (2023). ELRC Claim dated 1st December 2014 (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2899/eng@2023-11-15

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