Kenya Union of Commercial, Food and Allied Workers v National Hospital Insurance Fund (Cause 788 of 2012) [2025] KEELRC 155 (KLR)
The bottom line
#A Kenyan court dismissed sacked state corporation workers' claims because although their dismissal process was flawed, they were genuinely guilty of negligence and fraud.
What this practically means
#Executive summary
#Key legal issues
#Procedural fairness of the terminations
Procedure was flawed for all Grievants: the 1st Grievant had no initial disciplinary hearing, and all Grievants were denied the investigation report and relevant evidential material
The 1st Grievant responded to a show-cause letter but was never invited to a disciplinary hearing, confirmed by the Respondent's own witness. The 2nd and 3rd Grievants were heard before the staff advisory committee and on appeal. However, the Respondent failed to supply audit and investigation reports as agreed at conciliation, denying all Grievants the ability to respond adequately, breaching Sections 41 and 45 of the Employment Act.
Validity of reasons for termination
Valid reasons were established for all three dismissals — negligence for the 1st Grievant and fraud for the 2nd and 3rd Grievants
The 1st Grievant, though assistant auditor, failed to audit without bank statements or escalate irregularities, and was rightly found negligent. The 2nd and 3rd Grievants were shown through evidence to have manipulated records, converting cash payments to cheques with reduced amounts, causing revenue loss. Their defence blaming supervisor Kubio was unconvincing, satisfying Sections 43, 44(4), 45 and 47(5) of the Employment Act.
Constructive dismissal
The plea of constructive dismissal has no foundation; all Grievants were expressly dismissed, not constructively
Following Coca Cola East & Central Africa Limited v. Maria Kagai Ligaga, constructive dismissal involves resignation due to a hostile working environment created by the employer. None of the Grievants resigned; all received express termination letters, so there is nothing to imply.
Remedies
Reinstatement is legally barred and impracticable; compensation declined despite procedural flaws because the Grievants committed fraud against a public entity
Reinstatement under Section 12 of the E&LRC Act expired 3 years after termination in 2011, and the parties have moved on. Although procedure was unfair, the 2nd and 3rd Grievants were active participants in fraud against a public entity, and it would be imprudent to order compensation from the same public purse. Claims for leave pay and conciliation costs were not pleaded or established.
Legal principles established
#- An appeal cannot cure the absence of an initial disciplinary hearing; an appeal presupposes an initial process and outcome
- Failure to supply an employee with the investigation report is a fundamental departure from basic standards of procedural fairness
- An express termination cannot be characterised as constructive dismissal; constructive dismissal requires resignation induced by the employer's intolerable conduct
- An investigation cannot objectively be undertaken without the involvement of the person under investigation
Court orders
#- 1.The Claim is declined
- 2.No order on the costs
- Jurisdiction invoked
- Original jurisdiction of the Industrial Court of Kenya under the Employment Act and the E&LRC Act (unfair termination claim)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Union of Commercial, Food and Allied Workers v National Hospital Insurance Fund (Cause 788 of 2012) [2025] KEELRC 155 (KLR)", Case Analysis (2025). not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/155/eng@2025-01-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.