Unilever Kenya Limited v Gathomi

of violation of the Unilever Code of Business principles” which had allegedly been lodged against her. The nature of alleged violation of the Unilever Code was however not disclosed in that letter. 5. About three weeks later, by a “Notice to Show Cause” letter dated 18th November 2014, the appellant informed the respondent that the allegations of violations of the Code of Business Principles (in respect of standard of conduct and Business Partners) were that she: used her position to unduly inuence work allocation, for example, Armourtech; and engaged in anti-trust activities and infringement in the conduct of her duties. Other complaints related to alleged gross negligence and intentionally negatively impacting the appellant’s cash ow by guiding unauthorised advance payments in respect of purchase orders to Armourtech; falsely referenced and incorrect tender numbers; and failure to follow tender process; exposing the appellant to risks of loss. The respondent was required to “show cause why disciplinary action should not be taken against” her, and her response was required by 9.00 am on Friday 21st November 2014. 6. The respondent responded by her letter dated 21st November 2014 in which she complained that the allegations against her were “broad, unfounded and unsubstantiated” and that neither had she been provided with an investigation report in respect of the investigations the appellant had undertaken to carry out following her suspension. She nonetheless denied, blow-by-blow, all the allegations that were set out in the Notice to Show Cause letter. 7. Four days later, by its letter dated 25th November 2014, the appellant acknowledged receipt of the respondent’s response and scheduled a disciplinary hearing for 27th November 2014 at 2.00 pm at its premises. The Minutes of that disciplinary meeting record that: a Union steward who was present complained that the suspension process did not accord with the Collective Bargaining Agreement; a request for the investigation report was made; a Mr. Derek Pearton, an accountant and Forensic Investigator, had been retained in October 2014 “to look into a matter relating to the possible misconduct/conict of interests activities” by the respondent and presented his ndings; the respondent responded, at length, to the allegations against her. 8. At the close of the hearing at 7.25 pm, the Chairman indicated that a decision would be relayed to the respondent thereafter. That decision was relayed to the respondent by a letter of summary dismissal dated 9th December 2014 in which the appellant informed the respondent that she was found culpable on all the charges except two, and: “Therefore, you are hereby summarily dismissed from company employment with immediate eect on account of gross misconduct in violation of Unilever’s Code of Business Principles.” 9. The respondent’s last working day was to be Tuesday 9th December 2014. With that, the stage was set for the litigation that ensued. 10. In her Statement of Claim before the ELRC, the respondent sought: a declaration that she was unfairly, wrongfully, and unlawfully terminated from employment; release of her pension; three months’ salary in lieu of notice; salary for days worked in December, 2014; unpaid leave allowance for 2014; twelve months’ salary for wrongful and unfair dismissal; costs and interest. It was the respondent’s case that the termination was invalid and predicated upon an unfair process. In response to the claim, the appellant pleaded that the dismissal was justied and procedurally fair and prayed for the dismissal of the claim. 11. During the trial, the respondent, as the claimant, testied on her own behalf. The appellant called its Human Resource Service Manager, Mary Nyagi. After considering the evidence and the submissions, the learned Judge, as already indicated, found in her impugned judgment that the appellant was https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1944/eng@2024-12-20 2

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justied in summarily dismissing the respondent from employment, but that the process was unfair and proceeded to grant the reliefs alluded to earlier in this judgment. 12. With regard to the reasons for termination and whether the appellant was justied in doing so, the learned Judge having made reference to Section 43 of the Employment Act, 2007 stated as follows: “ What is imperative is that they (appellant) established valid reasons for the dismissal which reasons were what they believed to exist as of the time of dismissal. From the Minute herein, the Respondents (sic) believed the reasons that existed and which led to the dismissal of the Claimant. It is my nding that the Respondent indeed believed the existence these reasons and established them as per the Minutes of the disciplinary hearing.” 13. That part of the judgment, as indicated, is not challenged. What is challenged is the nding by the Judge on the process. In that regard, the Judge after observing that the respondent was invited to a disciplinary hearing by letter dated 25th November 2014, went on to state as follows: “ There is no evidence that the letter laid down to her the charges levelled against her. It is therefore evident that though she appeared for a disciplinary hearing, the charges against her were not presented to her before the hearing to enable her prepare her defence. Indeed under Article 50 of the Constitution, the need for an accused person to be accorded a fair hearing is emphasised and this includes the need to be aware of the charges levelled against her in a clear and unambiguous manner. In the case of the claimant, however, I nd that the claimant was not only denied the advantage of knowing in advance charges against her, but she was also denied the investigation report and access to her computer which would have enabled her access information to defend herself. In the circumstances, I nd the disciplinary hearing against the claimant was not fair.” 14. As already stated, the appellant’s grievances are that the Judge erred in holding that the termination was procedurally unfair and in awarding damages to the respondent. We heard the appeal on 27th May 2024. Ms. S. Onyango, learned counsel, appeared for the appellant whereas Mr. Omwebu, learned counsel, appeared for the respondent. Counsel relied on their respective written submissions as well as oral submissions. 15. The appellant submits that it followed a fair process in terminating the respondent's employment, including: conducting investigations into alleged breaches of the company's Code of Business Principles; issuing a Show Cause Letter; providing an opportunity for a disciplinary hearing; and considering her representations before reaching a decision. 16. It is submitted that the appellant provided sucient evidence of the respondent’s misconduct, which included breaches of the company's Code of Conduct, such as engaging in activities that compromised the company's integrity and negatively impacted its business partnerships; that the respondent was given ample opportunity to defend herself, including time to prepare for the disciplinary hearing; and that the ELRC erred in awarding damages to the respondent, as the termination was justied. 17. In opposition to the appeal, it is submitted for the respondent that her termination was procedurally unfair; that she was not provided with a copy of the investigation report, despite requests, and the allegations against her in the Show Cause Letter were too vague and broad for her to adequately https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1944/eng@2024-12-20 3

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respond; and that lack of specic details prevented her from eectively preparing her defence for the disciplinary hearing. 18. Moreover, it is submitted, the disciplinary process was not in line with the company's internal policy for handling disciplinary procedures, which requires a two-stage approach involving both a disciplinary committee and a Code committee. It was submitted that only one committee, composed of individuals without the legal authority to make the decision, handled her case. Furthermore, she argues that the appellant's actions violate Section 45 of the Employment Act, which outlines requirements for fair termination procedures. 19. We have considered the appeal and the submissions. The key question is whether the termination of the respondent’s employment was procedurally fair. In that regard, Section 45(1) of the Employment Act provides that no employer shall terminate the employment of an employee unfairly. Section 45(2) (c) provides that a termination of employment by an employer is unfair if the employer fails to prove that the employment was terminated in accordance with fair procedure. Section 45(4)(b) then provides that a termination of employment shall be unfair where it is found that in all the circumstances of the case, the employer did not act in accordance with justice and equity in terminating the employment of the employee. 20. Section 41 on notication and hearing before termination on grounds of misconduct requires that before terminating the employment of an employee on grounds of misconduct the employer shall explain to the employee the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop oor union representative of his choice during this explanation. Under Section 41(2), before terminating the employment of an employee or summarily dismissing an employee, the employer shall hear and consider any representations the employee may make. 21. In the case of Postal Corporation of Kenya v Andrew K. Tanui (Civil Appeal 127 of 2015) [2019] KECA 489 (KLR), this Court stated that “Section 41 provides the minimum standards of a fair procedure that an employer ought to comply with” and that: “ Four elements must thus be discernible for the procedure to pass muster:i. an explanation of the grounds of termination in a language understood by the employee; ii. the reason for which the employer is considering termination; iii. entitlement of an employee to the presence of another employee of his choice when the explanation of grounds of termination is made; iv. hearing and considering any representations made by the employee and the action chosen by the employee.” 22. In this case, and as already noted, the record shows that in its letter dated 28th October 2014 to the respondent suspending her from duty, the appellant asserted that “a serious allegation of violation” of its Code of Business had been lodged against her, but the nature of the “serious allegation” was not disclosed. The appellant in the same letter stated that the purpose of suspending her from employment was to “pave the way for further investigation to take place.” 23. In the subsequent Notice to Show Cause letter dated 18th November 2014 demanding that the respondent should show cause why ‘disciplinary action’ should not be taken against her, the appellant asserted that “it is alleged” that the respondent had violated the appellant’s Code of Business Principles https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1944/eng@2024-12-20 4

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or Code Policies relating to Standard of Conduct and Business partners, particulars of which we have summarized above. 24. As indicated, the respondent in her response complained that although her suspension was to pave way for investigations, she had not been contacted by the investigator to answer any questions; that it was not clear who made allegations against her or what code of principles she had violated, and neither had she received any report in respect of the said investigations. She complained further that the allegations in the notice to show cause were “so broad, unfounded and unsubstantiated” to the extent that she “was not able to appreciate with any degree of specicity the exact nature and extent of the allegations against” her. She went on to express that as soon as she was suspended from duty, she was denied access to the company system where records of all transactions are stored” and she was therefore handicapped in her response “even if the allegations against [her] were specic and particularised.” She nonetheless went ahead to respond. 25. Without addressing the concerns raised by the respondent regarding the dearth of particulars, the appellant by its letter dated 25th November 2014 merely acknowledged receipt of her letter and convened a disciplinary hearing for 27th November 2014 at 2.00 pm. It is no wonder that at the very onset of the disciplinary hearing the Union representative complained about the process and made a request for a copy of the investigation report which had evidently not been supplied up to that point. To that extent, this is not unlike the circumstances in the case of Postal Corporation of Kenya v Andrew K. Tanui (above) where this Court in upholding a nding of procedural unfairness, observed that the document which formed the basis of the charges that had been framed against the employee had not been provided, noting further that “even in criminal trials, which are more serious in nature, an accused is entitled to the statements that support the charges laid against him. That is the essence of fairness even outside a judicial setting.” We therefore agree with the learned trial Judge when she expressed that: “ In the case of the claimant, however, I nd that the claimant was not only denied the advantage of knowing in advance charges against her, but she was also denied the investigation report and access to her computer which would have enabled her access information to defend herself.” 26. We conclude therefore that the Judge did not err in concluding that the disciplinary process was unfair. 27. Turning to the remedies awarded, it bears repeating that the decision by the trial Judge that the appellant was justied in summarily dismissing the respondent for gross misconduct is not challenged. Consequently, the award by the trial Judge of three months’ salary in lieu of notice is contradictory to that nding and cannot therefore stand. It is hereby set aside. 28. In summary, the appeal partially succeeds to the extent that the award of Kshs.498,594.99 being three months’ salary in lieu of notice is hereby set aside. The judgment of the ELRC is otherwise upheld and armed. 29. Each party shall bear its own costs of the appeal. DATED AND DELIVERED AT NAIROBI THIS 20TH DAY OF DECEMBER, 2024. D.K. MUSINGA, (P) ................................... JUDGE OF APPEAL ASIKE-MAKHANDIA https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1944/eng@2024-12-20 5

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................................... JUDGE OF APPEAL S. GATEMBU KAIRU, FCIArb ................................... JUDGE OF APPEAL I certify that this is a true copy of the original. Signed Deputy Registrar. https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1944/eng@2024-12-20 6

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