Safaricom to pay former sales managers Sh55m for wrongful dismissal

They were sacked in 2018 over alleged negligence in handling of the mobile Huawei Y311 devices bought by the company at Sh544.5 million nine years ago for registration of subscribers.

"All the claimants were unlawfully and unfairly summarily dismissed. The claimants are entitled to compensation in terms of section 49(1)(c) and 4 of the Employment Act, 2007. The claimants were subjected to the same unfair and impossible work conditions by the Respondent (Safaricom) and were wrongly accused of negligence when failures of the project were as a result of deficiencies in the operational procedures, policies and systems of the project," said Justice Nduma Nderi in the verdict.

The compensation award to each claimant is based on their respective monthly gross salaries as reflected on their payslips.

Safaricom rolled out a distribution plan of 90,000 devices to its dealers, agents and shops in 2016, and it incurred expenditure of Sh544.5 million in purchasing the devices, which were distributed for free.

The purpose of the project was to enhance the process of registration of subscribers to the Safaricom’s network in a bid to comply with regulation ‘’know your customer’’ requirements.

The devices were distributed to Safaricom's retail shops by the ASMs.

However, some devices went missing and could not be accounted for by the sales managers.

A senior manager, from the company's fraud detection department, testified that as a result of the alleged negligent conduct, Safaricom had a slow uptake of the subscriber registration and this led to an investigation by Safaricom's Ethics and Compliance Department.

The witness, Emmanuel Dibo, said the investigation exercise unraveled several indicators that the objective was not being met which included device not being used on the Safaricom’s network for subscriber registration activities and devices being used on a competitor network.

Other devices were mapped to individual customers being the Safaricom agents or dealers.

He stated that Safaricom required the managers to account for the devices that were issued to them and which exposed the company to a financial loss of about Sh6.7 million in addition to potential regulatory exposure for failing to comply with subscriber registration regulation.

The witness said the managers were dismissed from employment for negligence and their appeals for dismissal were not successful.

The court heard that the Area Sales Managers remained accountable for all devices distributed despite involvement of other staff in the distribution process.

However, the court found the summary dismissal of the managers was unlawful and unfair as they were fired without notice and without payment in lieu of notice.

"The claimants have proved that they are entitled to one month salary in lieu of notice as pleaded in the memorandum of claim and in each witness, statement admitted by consent of the parties," said the judge.

He found that Safaricom did not give the managers fair opportunity to defend themselves, hence offending the rules of natural justice and violating the Employment Act, 2007.

Safaricom has since filed a notice of appeal against the judgment. It intends to overturn findings of the Labour court.

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