Samsung has been ordered to pay a former employee Sh3.8 million after the court found that the appliance and consumer electronics firm failed to prove valid grounds for dismissing him in 2022.
The Employment and Labour Relations Court in Nairobi ruled that the multinational did not demonstrate fair and valid reasons for sending Stanley Ngigi home, who served as retail marketing manager in the firm’s IM (mobile) division.
Although Samsung’s disciplinary process substantially complied with procedure, the court said, the substantive justification for the dismissal did not meet the threshold required under the Employment Act.
Mr Ngigi was hired in March 2018 and was dismissed in December 2022 after facing allegations including failure to ensure promotional bundles were available in retail stores, not providing timely stock feedback, improper variation of dealer credit notes and failure to guide dealers on new products.
In his defence, the former manager told the court that the issues raised were either outside his control, had been addressed, or were the responsibility of other departments.
He argued that the promotional bundles had not arrived before the launch because sourcing began too late, and that he had no mandate over credit note variations. The court noted that Samsung did not produce documentation to contradict his account or to show breach of company procedures.
The court found that the South Korean corporation did not sufficiently prove any of the four grounds as valid reasons for dismissal.
“These performance concerns were not the immediate or principal reason(s) for the termination of the Claimant’s employment as set out in the letter of termination and by dint of section 43(2) of the Employment Act, 2007,” reads the ruling dated November 20.
“The court is constrained to find that the respondent did not prove valid and fair reasons to terminate the claimant’s employment.”
The court, however, declined to reinstate Mr Ngigi as manager, noting the seniority of his role and Samsung’s argument that trust had broken down.
Instead, it awarded him the equivalent of five months’ salary, amounting to Sh3,777,805, plus interest and costs.
Mr Ngigi had also raised grievances of alleged harassment by his supervisor during the disciplinary process, but the court held that although these grievances were not concluded before his exit, the circumstances did not amount to a violation of fair labour practices.
The Employment Act requires employers to prove the reasons given for dismissal, which can be related to conduct, capacity, or operational requirements, and must follow a fair procedure.
The termination must be based on a reason genuinely believed by the employer and is fair. This could be due to the employee's conduct, capacity, or the employer's operational needs.
Additionally, the employer must provide a proper notice period or pay wages in place of notice, depending on the contract. If there is no such provision, it is based on the payment cycle.
The employer has the burden of proof to demonstrate that the reason for termination is valid and fair.
