Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
HR teams feel heat for illegal actions against employees
An employee is entitled to be heard and his representations, if any, considered by an employer before the decision to terminate his contract of service.
A rising number of corporate employees are winning court cases against their employers, particularly in disputes of unfair dismissal, putting human resource (HR) managers in the spotlight.
A scrutiny of court papers reveals that HR managers are not adhering to laws and procedures on employee engagement on sensitive issues, such as disciplinary hearings and termination of service.
Other reasons include sacking staff on invalid reasons and failure to give the aggrieved employee sufficient time to prepare and understand the charges during the disciplinary process.
As aggrieved employees continue securing resounding victories in court, focus is now shifting to the HR practice and policies since employers are also counting financial losses resulting from the compensation payouts. The legal battles also come with reputational damage.
Sobering reality
One of the recent prominent disputes pitted a non-government organisation and its employee, who was sacked for taking alcohol during working hours, where the Employment and Labour Relations Court sided with the employee.
The court found that sipping alcohol during working time does not constitute a reasonable ground for termination. It ruled that for an employee to be dismissed on grounds of alcohol drunkenness, it must be proved that the employee was so drunk to the point of being unable to work.
“Being drunk whilst at work constitutes gross misconduct for which an employee may be summarily dismissed from employment. However, ingesting an alcoholic drink is not a ground for dismissal of an employee from duty unless this renders him either unwilling or incapable of discharging his duties,” said Justice Bernard Manani in a judgment delivered last month. The case was between Avsi Foundation and its former Project Coordinator, Ms OCC.
As such, the court said, for the employer to rely on intoxication as a ground for termination of an employee’s contract, it must clearly demonstrate that the employee was drunk to the point of being unable or unwilling to execute duties.
Ruling in the employee’s favour, the court said under section 43 of the Employment Act, the employer bears the burden of demonstrating a valid reason to terminate an employee’s contract of service.
Bungled disciplinary proceedings
In regard to failure to furnish an aggrieved employee with evidence linking him or her to alleged misconduct, the East African Breweries Plc (EABL) recently lost a court dispute with one of its former sales managers.
Among the factors considered in the compensation award was the company’s refusal to provide the claimant an opportunity to see the investigation report and witness statements relied upon to decide to dismiss him.
EABL alleged fraud, gross negligence, and misappropriation of company assets as grounds for the sacking.
“It is on record that disciplinary proceedings were taken out against the claimant pursuant to an investigation commissioned by the Respondent. In drawing this conclusion, I reject the Respondent’s feeble submission that the investigation report was not relevant in the disciplinary proceedings. It is also on record that the claimant asked for the investigation report right at the inception of the disciplinary proceedings, but his request was denied,” said Justice Linnet Ndolo.
Still in Justice Ndolo’s court, she faulted the Standard Chartered Bank Kenya for dismissing one of its managers on account of redundancy, only to hire someone else to fill the position.
The court found that the dismissal of the employee, who was the manager of Financial Crime Compliance, was in bad faith.
"The court was unable to understand why a bank with a global network, such as the Respondent, would abolish a position only to reinstate it two months later. The Respondent’s (bank) averment that it had no control over the decision to downgrade the Claimant’s position was unconvincing," said Justice Ndolo.
In another case, the court backed the decision of the Kenya Commercial Bank (KCB) to dismiss one of its cashiers, who was underperforming and was showing no effort to improve, but ordered the lender to compensate him for the unprocedural termination of the contract. The cashier, Peter Kimeu, was awarded Sh469,514.
“The court has considered the pleadings and submissions of the parties and the authorities cited, and the court finds the claimant was clearly underperforming and was showing no effort to improve. However, he was unprocedurally terminated and for that reason judgment is entered in his favour,” said Justice Anne Ngibuini.
Presumption of vulnerability
According to legal pundits, courts often favour aggrieved employees in employment disputes because the Employment Act presumes that employees are vulnerable compared to employers.
Courts have been holding employers accountable for unfair labour practices and ensuring employees receive their due benefits and compensation.
Composition of disciplinary committees and investigative teams to investigate employees has also come up in multiple cases, with the court holding that persons nominated to investigate staff should not sit on the disciplinary committee.
Thika Water & Sewerage Company Limited failed this test and was last month ordered to pay its former acting Finance Manager, Michael Njoroge, Sh1.3 million following a finding that the employment was terminated without regard to procedural and substantive fairness. The manager was sacked over alleged fraud.
Justice Ocharo Kebira backed the manager’s protest on the composition of the Disciplinary Committee and questioned their impartiality, as nearly all of them had been involved in the investigations.
“Ensuring impartiality by a committee or panel in any workplace disciplinary process is crucial. Any concerns about impartiality should be addressed by the employer, either before the disciplinary hearing begins, if raised early enough, or considered during the hearing, if raised later,” the judge advised.
Underperformance
Elsewhere, the Labour Relations Court held that employers should not terminate an employee for underperformance without first demonstrating efforts to help him or her improve the alleged poor performance.
According to the court, employers have a duty to provide the underperforming employees with support to boost their productivity before considering dismissal.
The court held that it is unlawful for an employer to sack an employee primarily based on poor performance without evidence that there were attempts to help the worker meet the expected standard of performance.
The findings were made by Justice Ndolo in a dispute pitting retail chain Cleanshelf Supermarkets Limited and one of its staff, Stephen Muraya Kamuri, who was the head of the bakery section.
"In my view, an employer who sends a poor performing employee on compulsory leave has no intention of supporting that employee to improve," the court said.
The court disputes have also put employers in the public eye for failure to follow their own internal policies and procedures. The scrutiny further shows that companies lose labour relations cases, even if they believe they were in the right.
Unidentified complainants
A case in point is the firing of a hotel HR manager, who resigned over alleged sexual harassment of four employees.
The court awarded him Sh5.4 million in the form of damages following a finding that the employer failed to disclose the identity of the alleged complainants, denied him the opportunity to be heard, and the resignation was due to frustrations.
The court found that the employer failed to grant the former manager, codenamed Mr PN, an opportunity to defend himself against the accusations.
“It is unfortunate that in this case, the claimant was given statements of faceless persons as his accusers, and it was indeed difficult to respond to accusations against him. He was supposed to be supplied with evidence against him. He was, however, referred to the respondent’s (hotel) counsel to pick up some documents. There is, however, no evidence that the documents requested were finally supplied,” said Justice Hellen Wasilwa.
In regard to fair hearing, Justice Stella Rutto recently disapproved the decision of the Nairobi Hospital to fire one of the Ward attendants over the alleged theft of food meant for patients.
Justice Rutto said the allegations were unsubstantiated, and that the termination process was unfair.
“There was no evidence that the claimant was invited to give his explanation in answer to whatever allegations. Similarly, there was no evidence that a disciplinary hearing was conducted and the claimant granted an opportunity to answer to the allegations levelled against him in the presence of a fellow employee or a union representative of his own choice,” said the judge.
The court awarded him Sh667,122 in damages. The hospital believed the dismissal was right and was based on valid reasons in accordance with fair and applicable procedures under the employment laws and its Human Resource Policy and Procedure Manual.
“Be that as it may, the report arising from such investigations, if any, was never produced in court. Needless to say, the allegations leveled against the Claimant remained largely unsubstantiated. What’s more, failure by the respondent to call oral evidence did not help matters either and if anything, fundamentally impaired its case,” said the judge while faulting the employer.
The court cases also reveal employers’ failure to comply with internal disciplinary processes and the Fair Administrative Action Act, which requires that ‘every person materially or adversely affected by any administrative action has a right to be supplied with such information as may be necessary to facilitate his or her application for an appeal or review’.
Earlier, the Court of Appeal held that “it is considered unfair to terminate a contract of service if the employer fails to demonstrate that the reason for the termination is valid and fair, that reason related to the employee’s conduct, capacity and compatibility, or is based on the operational requirements of the employer”.
The court said the employer must also prove that the termination was in accordance with fair procedure,” said the Court of Appeal in one of its rulings.
Apart from issuing proper notice according to the contract (or payment instead of Notice as provided), an employer is duty-bound to explain to an employee in the presence of another employee or union official, in a language the employee understands, the reason or reasons for which the employer is considering termination of the contract.
In addition, an employee is entitled to be heard and his representations, if any, considered by an employer before the decision to terminate his contract of service.
Failure to follow this mandated process results in termination and is regarded as unprocedural. The employer must pass the test of both substantive justification, where they give valid reasons for termination, and procedural fairness.
