Relief for KQ as ex-finance chief’s Sh144m award cut

Kenya Airways #ticker:KQ (KQ) has partially succeeded in slashing the hefty Sh144 million compensation that was due to former finance director Alex Mbugua after the Court of Appeal ruled that there was no basis in awarding three years’ salary for his illegal sacking.

Mr Mbugua, who was fired from his position as KQ’s chief finance officer (CFO) on January 19, 2016 after eight years, will now get compensation for gross salary for nine months.

In 2017, the Employment and Labour Relations Court had directed the troubled carrier to either pay him Sh144 million being salary due for three years and 12 months from the date of his sacking or reinstate him to his former job.

At the time he left the company, he was earning about Sh3 million in monthly salary.

But Justices Martha Koome, Patrick Kiage and Sankale ole Kantai of the Appellate Court have struck out the 3-years compensation saying there was no explanation or justification. They, however, said that given the shabby, humiliating and unjustified manner in which KQ treated him, nine months' compensation was appropriate.

This means that Mr Mbugua will now get about Sh27 million compensation from the carrier.

The judges agreed that Justice Monicah Mbaru of the Labour Court was right in finding that KQ was in breach of the law when it summarily terminated Mr Mbugua’s employment.

“It is quite obvious to us that KQ conflated the performance review and disciplining process and came up with what was essentially a hybrid, mongrel process that did not fall under either category,” they said.

They added that the process was tainted and it would seem the performance angle was no more than a red-herring to get rid of him from KQ.

“His fate was determined even before he was summoned to attend the Serena session, whatever it was, with the demand that he resign, the barricading of his office, disablement of his email and the like,” they added.

According to him, his troubles with KQ appeared suddenly on January 11, 2016 when he was confronted by the chairman and asked to resign because of his alleged performance.

He claimed that he was let go as part of a vindictive scheme by top managers to conceal plunder at the airline.