Economy

Helb finance chief wins Sh36m in illegal pay row

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An embattled finance executive has scored a double victory, winning back his job and a Sh36 million compensation for unfair dismissal for rejecting illegal orders by a chief executive. PHOTO | POOL

An embattled finance executive has scored a double victory, winning back his job and a Sh36 million compensation for unfair dismissal for rejecting illegal orders by a chief executive.

In a ruling that affirms employee rights and shines a spotlight on governance, ethics, and integrity at the workplace, Justice Byram Ongaya of the Employment and Labour Relations Court said Shem Gichimu was right to reject an illegal directive by the Higher Education Loans Board (Helb) chief executive Charles Ringera to adjust the salary of a senior officer at the State agency.

Read: Helb begins disbursing Sh8.2 billion to first years

“While making that award the court upholds the claimant’s submission that a public body such as the respondent by its agents or employees must not indulge in facilitating, aiding, and abetting grant corruption and if such indulgence appears to take place and the public body fails to prove that it did not deliberately fail to discharge its responsibilities according to its mandate, then the victim of the public body must be protected and adequately compensated,” said the judge.

Mr Gichimu was employed as the head of finance at Helb on June 4, 2007, until September 27, 2019, when his contract was suddenly terminated, triggering a court fight that revealed an acrimonious fight between Mr Gichimu and Mr Ringera over a directive to raise the basic salary of then chief operations officer Geoffrey Monari — presently chief executive at Universities Fund.

Court filings show that Mr Gichimu’s woes began after finance manager Kerin Lidoroh, on March 25, 2019, brought to his attention a discrepancy in Helb’s payroll for that month.

Ms Lidoroh was concerned that Mr Monari’s basic salary for March 2019 differed from that paid in previous months.

On further inquiry, she was advised by the acting human resource manager, Gilbert Wir that this incremental credit had been done with the approval of Mr Ringera.

To support his claim, the HR manager produced a memo prepared for the CEO, requesting a change in the COO's salary.

The memo explained that there was a huge discrepancy between the basic salary of the COO and that of other members of staff within the same grade (Grade II). The CEO approved this change by appending his signature on the face of the memo.

Dissatisfied, Mr Gichimu requested to be provided with a board resolution authorising the said change in the basic salary of the COO. In turn, he was advised that there was no board resolution supporting the decision.

Mr Gichimu then sought the legal advice of the Head of Legal and Corporation Secretary at Helb, Bernadette Masinde, who as the custodian of all board deliberations, would have had a copy of the said board resolution.

Mrs Masinde said there was no board resolution on Mr Monari’s basic salary and further revealed that she had on March 26,201 raised the matter and advised that several employees at Helb were affected by discrepancies in the salary structure.

She indicated that the organisation should adopt a holistic approach to resolve salary discrepancies.

Based on Mrs Masinde’s response Mr Gichimu declined to approve the changes to Mr Monari’s basic salary without resolution of the board of directors endorsing such a move.

Following the advice received from Mr Gichimu and Mrs Masinde, the HR manager sought the CEO’s approval to disregard the incremental credit. However, Mr Ringera maintained his position and directed that there should be no further engagement on the matter.

On March 27, 2019, Ms. Lidoroh wrote a memo to the CEO through Mr Gichimu’s office, expressing concern about the un-procedural incremental credit and requesting approval to process the March 2019 payroll, for the sake of the staff.

The CEO approved the request on the same day by appending his signature on the face of the memo, and all staff salaries except that of the COO were paid. Mr Monari’s salary was adjusted to what he was being paid previously and paid on March 28, 2019.

The CEO complained to Charles Onami Maranga, the Chairperson of the Board’s Finance Staff and General Purpose (FS&GP) Committee, and expressed that he was being frustrated by the finance team, who had refused to follow directives he had given as the executor of board decisions.

Read: Helb CEO Charles Ringera on new student funding model

Mr Gichimu wrote a memo to the CEO dated April 3, 2019, in which he explained that as the CFO, his mandate was to ensure that all payments were proper and in line with stipulated laws, code of conduct, policies, and procedures.

He explained that there was no board resolution on salary increment for the COO and that there was no reason provided to explain why only one staff member was picked.

He stated that all payments flagged as irregular by the FM, HLCS, and himself were still appearing in the respondent’s books as outstanding debts in individual staff debts accounts or as unresolved integrity and governance issues.

Mr Gichimu maintained that without board approval, the process was illegal and irregular and that handling only one individual’s salary was discriminatory. He recommended that the HR department develop a board paper for discussion by the FS&GP Committee during their next meeting.

On April 8, 2019, Mr Gichimu was issued with a show cause letter requiring him to show cause why disciplinary action should not be taken against him, requiring him to respond by 5 pm on April 12, 2019.

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