Court backs dismissal of Sanlam boss for negligence
Sanlam also reprimanded Mr Ogola for allegedly mishandling a write-off claim on a Mercedes Benz vehicle that has been covered by the insurer for a year starting September 30,2021.
The Employment and Labour Relations court has backed the decision by Sanlam General Insurance Limited to dismiss a top official over negligence.
Justice Stella Rutto dismissed a suit by Sanlam’s former head of technical operations Christian Basil Ogola, who sued the insurance firm seeking compensation on allegations that his employment was unfairly terminated in October 2022.
The judge said the underwriter had a valid and fair reason to commence disciplinary action against Mr Ogola for his actions and omissions regarding a tender by Kenya Electricity Generating Company (KenGen), which the court said exposed Sanlam to litigation as well as reputational risks.
Justice Rutto said Mr Ogola was informed of the allegations levelled against him and he was given an opportunity to be heard in person and to respond to the said allegations.
“To that extent, the Respondent (Sanlam) cannot be faulted. Accordingly, I cannot help but conclude that the termination of the Claimant was neither unfair nor unlawful,” said the judge.
Mr Ogola sued the insurance firm seeking more than Sh16 million, alleging that the process that led to his termination was flawed and that the outcome was premeditated.
The former employee said his reputation in the insurance market had been tarnished, meaning that he had no chance of securing employment because all senior positions require approval of the Insurance Regulatory Authority, through a fit and proper check part- of which requires a check of previous employment and whether there has been any fraud or disciplinary process.
Mr Ogola was terminated for negligence in the execution of his duties as Head of Operations while handling a KenGen tender, for provision of insurance services, and lapses in the execution of his duties while handling the write-off and disposal of the insurance salvage of motor vehicle.
In the case of KenGen, Mr Ogola issued a steep discount without the approval of the insurer’s Central Underwriting Team (CUT), forcing a termination of a deal with electricity generation company even after Sanlam had been awarded the contract jointly with A-Plan Insurance Brokers.
A-Plan Insurance Brokers, through its advocates later issued a demand letter to Sanlam for bungling the deal with KenGen.
Sanlam also reprimanded Mr Ogola for allegedly mishandling a write-off claim on a Mercedes Benz vehicle that has been covered by the insurer for a year starting September 30,2021.
The vehicle was involved in accident on October 9,2021 and the owner made a claim from his comprehensive insurance cover. The assessments were made by two external assessors; Prime Assessors and Elite & Vision Assessors; and Sanlam’s internal assessor.
The assessors ruled that the motor vehicle should be declared a write-off and be disposed of as insurance salvage, with a salvage amount of Sh1,500,000 and the owner compensated.
on February 28,2022, the insurance salvage of the motor vehicle was sold at an auction to a third party. However, there was a delay in releasing the salvage to the purchaser as a dispute arose regarding the rights of the owner of the motor vehicle to purchase it.
The salvage was eventually released to its purchaser after he had made a demand through a lawyer.
Various questions, however, subsequently arose regarding several issues among them the pre-accident value of the motor vehicle, the sensibleness of the repair estimates given for the motor vehicle after the accident, the reasonableness of the value of the salvage, the basis of the decision to declare that the motor vehicle was a write-off, the propriety of the procedure followed prior to declaring that the car was a write-off, the determination of the reserve price of the salvage and the cause of the delay in releasing the salvage to its purchaser.
Forensic auditors pointed out that the pre-accident value of the motor vehicle was higher than its purchase price, thereby creating an appetite for fraud. They also noted that the repair estimates given for the motor vehicle after the accident were exaggerated.
This was then used to justify the writing-off of the motor vehicle. The reports of the assessors who assessed the motor vehicle gave salvage amounts that were notably different; and the writing-off of the motor vehicle was approved despite the notable differences in the reports of the assessors.
In its report dated April 19, 2022, the Sanlam’s Forensics Department recommended that the parties who executed the claim relating to the motor vehicle should be requested to show cause why disciplinary action should not be taken against them.
Mr Ogola had submitted that he could be held liable for actions performed without his participation or authority.
The company alleged that Mr Ogola failed to act honestly and fairly with due skill, care, and diligence in the interest of the firm and its stakeholders as well as the integrity of the financial services industry.
On the disposal of the motor vehicle, the court noted that the salvage handling process was subject to internal checks at different levels from the claims department all the way to the chief executive officer’s office.
“Therefore, it is this court’s view that it was not reasonably fair to wholly attribute blame on the Claimant with respect to the manner in which the salvage of the motor vehicle Reg No xxx was handled,” said the judge.
On the tender bid by KenGen, the court said Mr Ogola was part and parcel of the team that was preparing the bid and actually played a central role in the process.
“In light of the foregoing, I cannot help but question why the Claimant (Mr Ogola) would lead the team as he did but failed to remind them that the central underwriting team was yet to issue the necessary approvals,” said the judge.
