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By Njoroge Regeru & Company
Nairobi, Kenya

Many employers find themselves in trouble with the law and are condemned by the Employment Court to pay hefty awards for unlawfully terminating the services of their employees – even where there was justification for termination. Many employers are therefore learning the hard way that there is a lot to consider before uttering the dreaded words “you are fired!”

For an employer to safely exercise their right to terminate employment they must ensure compliance with the procedural requirements for fair termination established under the Employment Act, 2007 and respecting the rights of the employees as enshrined in the Constitution of Kenya, 2010.

As the Employment Court observed in Mary Chemweno Kiptui –vs- Kenya Pipeline Company Limited, Case No. 435 of 2013, “the industrial Court has now built firm jurisprudence on circumstances within which the employer and employee relationship can be terminated or how the process of summary dismissal can be conducted so at to meet the strict provisions of the law and to avoid making the same invalid.”

The Judge in this case agreed with the decision in Kenya Union of Commercial Food and Allied Workers versus Meru North Farmers Sacco Limited Cause No. 74 of 2013 where it was held that “whatever reason or reasons that arise to cause an employer to terminate an employee, that employee must be taken through the mandatory process as outlined under section 41 of the Employment Act. This applies in cases for termination as well as in a case that warrant summary dismissal.”

Section 41 of the Employment Act, 2007 provides that “Subject to section 42 (1), an employer shall, before terminating the employment of an employee, on the grounds of misconduct, poor performance or physical incapacity explain to the employee, in a language the employee understands, the reason for which the employer is considering termination and the employee shall be entitled to have another employee or a shop floor union representative of his choice present during this explanation.”

Various decisions by the Employment and Labor Relations Court have now established that Section 41 of the Employment Act is a mandatory provision thus where the employee has not been given notice of intended termination and an opportunity to be heard before the decision for termination is made, whatever the grounds the employer may use to justify the termination, such termination will be held to be unfair and unlawful.

There are three basic requirements for an employer to put in place to meet this threshold. First, the employer should have valid reasons for termination. This may be based on misconduct, poor performance or physical incapacity on the part of the employee. It is upon the employer to prove the grounds. The second requirement is that the employer must notify the employee that they are considering terminating their employment.  The Court in Nairobi ELR Case No. 562 of 2012, Shankar Saklani –vs- DHL Global, held that “except for contracts of service to pay a daily wage, the employer must serve a notice and accord the employee a hearing as contemplated in Section 41 of the Act. The only leeway the employer is entitled to under Section 44 (1) is to serve a shorter notice, on account of gross misconduct, than that to which the employee was entitled to under statute or contract.”

The third requirement is for the employee to be given an opportunity to be heard before the decision to terminate their employment is made. The employee must be informed through a notice as to the charges and given a chance to submit a defence followed by a hearing in due cognizance of the fair hearing principles as well as natural justice tenets. The best practice is to also allow for an appeal to the employee within the internal disputes resolution mechanism if dissatisfied by the decision of the disciplinary committee. Where this procedure is followed an employer would have addressed the procedural requirements outlined under section 41 and any challenge that an employee may have would be with regard to substantive issues only.

So then, what happens in the meantime as the employee is being taken through the notification and hearing process? The employer has a right to place the employee on suspension where there is reasonable grounds to suspect an employee to have been involved in misconduct, poor performance or physical incapacity and wishes to remove such an employee from the work place. Suspension allows the employer the opportunity to undertake further investigation without enduring any further commission of more acts of misconduct, underperformance or the conditions leading to incapacity. The suspension period is discretionary on the employer and allows the employer to summon the employee back to work at any time to undertake disciplinary proceedings or upon terms and given by an employer.

Conclusion

Even in cases of serious breach of a contract or an employee being absent from work, being intoxicated, negligent, abusive, failure to obey lawful orders, criminal arrest, being a suspect in a criminal case, notwithstanding the seriousness of such acts, an employee should be treated in compliance with the provisions of section 41 of the Employment Act with regard to being accorded a fair hearing.