Summary Dismissal Without a Fair Hearing is Unfair Termination
Legal Insights

Summary Dismissal Without a Fair Hearing is Unfair Termination

Before the enactment of the Employment Act 2007, employers had the freedom to terminate an employment relationship for a good reason, bad reason or no reason at all. This was observed by the Court in the case of Reuben Ngila Kitonyi Vs. Central Bank of Kenya [2019] eKLR where it stated as follows—

“The…Act, unlike the current Employment Act, never provided for any hearing before terminating the contract for gross misconduct by the employee. The repealed Act also never provided for the doctrine of unfair termination or compensation for unfair termination other than salary in lieu of notice if the contract was terminated through breach.”

With the enactment of the Employment Act 2007, section 41 of the Act was born. The section requires an employer who intends to terminate the services of an employee for poor performance, misconduct and physical incapacity; to explain the reason for their intention, in a language the employee understands. As a matter of right, the employee is entitled to have a colleague or a shop floor union representative[1] during this explanation.

Generally, an employer can summarily dismiss an employee for gross misconduct or poor performance. However, the employer must hear the employee and consider the case presented; before summarily dismissing them. The Courts in Alphonce Mghanga Mwachanya Vs. Operation 680 Limited [2013] eKLR and Kenfreight (EA) Limited Vs. Benson K. Nguti [2016] eKLR found that for termination of employment to be fair, an employer must have a valid reason for termination and the employee must be heard on that reason before they are summarily dismissed.

Gross misconduct can be defined as conduct that amounts to a fundamental breach of an employee’s contractual obligation. The criteria for what amounts to gross misconduct by an employee is as follows—

  1. Absenteeism from place of work without leave or lawful cause.
  2. Becoming intoxicated during working hours which makes an employee unwilling or incapable of performing their work properly.
  3. Willfully neglecting to perform any work that falls under their duty, or carelessly and improperly performing any work which was their contractual duty to perform carefully and properly.
  4. Using abusive or insulting language, or behaving in a manner that is insulting to the employer or a person placed in authority by the employer.
  5. Knowingly failing or refusing to obey a lawful and proper command issued by the employer or a person placed in authority by the employer, which is their duty to obey.
  6. Being arrested for a cognizable offence punishable by imprisonment and is not released on bail/bond or set at liberty, within fourteen days.
  7. Committing or being suspected (on reasonable and sufficient grounds) of a criminal offence against or to the substantial detriment of an employer or employer’s property.

Though the list is not exhaustive, the reason(s) for terminating a contract should be matters that the employer genuinely believed to exist at the time they were terminating the contract and which resulted in the termination. Therefore, an employer must have a valid reason for terminating employment. The Court of Appeal in Reuben Ikatwa & 17 others Vs. Commanding Officer British Army Training Unit Kenya & Another [2017] eKLR referred to this as the “range of reasonable responses test” where Courts inquire on whether any reasonable employer would have made the decision to dismiss an employee if they were faced with similar circumstances.

It is important for an employer to know that unfair termination of employment is unlawful. The unfairness is established in instances where an employer fails to prove that—

  1. There was a valid reason for termination of employment.
  2. The reason was fair and was based on the employer’s operational requirement or related to the employee’s conduct, capacity or compatibility.
  3. The procedure for termination was fair (The employer is required to ensure there is justice and equity in the process).

The Act does not indicate what amounts to a fair reason for termination. Instead, it indicates what amounts to unfair reason to include the following—

  1. A female employee’s pregnancy or any reason connected with her pregnancy;
  2. An employee going on leave or proposing to take leave which they are entitled to under the law or a contract;
  3. An employee’s membership or proposed membership of a trade union;
  4. An employee’s participation or proposed participation in the activities of a trade union outside working hours or within working hours where the employer consents;
  5. An employee seeking office as, or acting or having acted in the capacity of, an officer of a trade union or a workers’ representative;
  6. An employee’s refusal or proposed refusal to join or withdraw from a trade union;
  7. An employee’s race, colour, tribe, sex, religion, political opinion or affiliation, national extraction, nationality, social origin, marital status, HIV status or disability;
  8. An employee initiating or proposing to initiate a complaint or other legal proceedings against the employer, except in instances where the complaint is irresponsible and lacks foundation;
  9. An employee participating in a lawful strike.

An employer must know what constitutes gross misconduct and what constitutes an unfair reason for termination, so as to ensure that their reason for summarily dismissing an employee is valid and justified. This is because the burden of proving the validity of a reason for termination has been put on the employer. Where they fail to prove the validity of the reason for termination, the termination will be deemed to be unfair and/or wrongful.

Options Available to an Employee who is Aggrieved by their Summary Dismissal

An employee who is aggrieved by their summary dismissal, may make a formal complaint to their area labour officer within 3 months of such termination. The labour officer then gives both parties an opportunity to present their case before making a finding on whether or not the termination was unfair. An employee can opt to institute a suit against their former employer, at the Employment and Labour Relations Court, for wrongful dismissal. Where the employee is dissatisfied with the labour officer’s decision, they are at liberty to file a suit at the Employment and Labour Relations Court.

Remedies an Employee has against Unfair Termination

Under the Employment Act 2007, where a summary dismissal is found to be unfair; the aggrieved employee has the following remedies—

  1. Where no notice was given, they will be awarded the wages/salary that they would have earned had they received the notice period that they are entitled to, as provided under the Act or contract of service.
  2. Where the summary dismissal terminates the contract before the employee completes service, they will be awarded wages/salary for the period worked and other terminal benefits that they were entitled to under the contract.
  3. Wages or salary not exceeding 12 months, based on their gross monthly wage/salary at the time of dismissal.

Conclusion

The nature of the employment relationship is one that becomes strained once there is loss of trust and goodwill. In an effort to remedy the situation, an employer may resort to summary dismissal that does not meet the legal standards set by the Act. This may prove costly in the long run should an employee challenge the dismissal before a labour officer or in Court. Such costs include—

  1. Legal fees incurred to file pleadings before court and to instruct an advocate to defend the claim.
  2. Time spent preparing and defending the suit, which would have been dedicated to the company. Employment claims can take years and require authorized officials to appear in court to testify or closely follow up on the matter in certain instances.
  3. In instances where the dismissal is found to be unlawful, the employer may be condemned to pay the employee their unpaid dues (where they were not paid) and pay damages of up to 12 months’ worth of salary.
  4. The Courts may also order for the reinstatement of the employee to the position they served before they were summarily dismissed, where the suit was instituted within 3 years from the date of summary dismissal.
  5. In an era where corporate governance is a key consideration for investors, a judgment indicating that an employer unfairly dismissed an employee could harm the employer’s reputation which may affect its value and ability to attract investors.

Ending an employment relationship that no longer serves the employer is a sound business decision. However, the employer must always ensure that the summary dismissal of an employee adheres to the provisions of the Employment Act. If not, the employer might end up incurring more costs than what it was aiming to save.


[1] A shop floor union representative is an employee of an organization/company who represents and defends the interests of their fellow employees as a trade union member and official.

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