The Employment and Labour Relations Court has awarded two former Kenya Medical Supplies Authority (Kemsa) finance managers Sh6 million each in damages for their sacking due to an adverse audit opinion by the Auditor-General.
The court found that Kemsa violated the rights of Edward Njoroge and Caroline Anunda by subjecting them to arbitrary interdiction, forced leave, and constructive dismissal without due process.
They were interdicted and placed on half salary in September 2024 on an “offence” that the office of the Auditor General’s annual audit report for the fiscal year ended June 2023 (July 2022 to June 2023) returned a score card verdict of adverse opinion.
An adverse opinion is an auditor’s professional judgment that a company’s financial statements are materially misstated and misleading, meaning they do not present a “true and fair view” of the organisation’s financial position or performance.
Mr Njoroge and Ms Anunda—then serving as finance managers—sued, contending that no such offence was contemplated in the Kemsa Human Resources Dispute Policy Manual.
They further stated that during the financial year in question, they were away from the office because they were among the Kemsa staff sent on compulsory leave.
This was after the government stepped in to reform the State agency in the wake of a mega scandal during the Covid-19 pandemic.
The court heard that a caretaker team put in place following the directive by the Head of Public Service was the one running the State corporation.
Stressing that it was the caretaker team that should have been wholly held responsible for any act or omission during the financial year, the petitioners informed the court that they were recalled to office in May 2023.
In the judgment, the court found that Kemsa unlawfully placed Mr Njoroge and Ms Anunda on indefinite compulsory leave without notice, hearing, or justification—a move deemed “psychological torture” and “public ridicule”.
“The petitioners suffered psychological torture, public ridicule and odium upon being publicly subjected to unlawful compulsory leave for an indefinite period without any notice, hearing and or any opportunity to explain themselves,” said the court.
“The petitioners were interdicted without substantive charges and timelines to respond.”
The court heard that the forced leave was a tactic to circumvent earlier conservatory orders barring disciplinary action against them.
They also said sending them away out of 22 directors and deputy directors without any reason was an act of unlawful discrimination.
Mr Njoroge argued that Kemsa’s actions, including deactivating his work access, left him no choice but to resign on October 1, 2024. The court agreed, saying the employer’s conduct constituted a repudiatory breach of his employment contract.
Ms Anunda, employed permanently since 2012, was controversially downgraded to a five-year contract in 2020 despite holding a pensionable role.
Though she sought renewal in February 2025, Kemsa declined without explanation and was replaced immediately.
While the court acknowledged the unfairness, it ruled her claim over the 2020 contract change was time-barred as it was filed outside the statutory limitation period of three years.
“The petitioner would have no doubt made a good case of discrimination since her senior counterparts remained in permanent and pensionable terms, and there was no written justification for the transition from permanent and pensionable terms to contractual terms.
That particular dispute is time-barred and cannot be adjudicated upon in this matter,” said the court.
However, the court condemned Kemsa’s failure to explain the non-renewal despite her “stellar performance,” awarding damages for rights violations.
The judgment criticised Kemsa’s board for acting unlawfully in terminating Ms Anunda’s contract.
The court dismissed preliminary objections by the Attorney General and Public Service Commission, affirming the petition’s validity.
The court cited the Supreme Court’s stance that constitutional damages aim to “vindicate violated rights,” even without proven financial loss.
