In Kenya, there has been a rise of litigation matters arising out of labour disputes. Incidentally, most of these disputes are rooted in how the contract is negotiated between the employer and the employee but also more strongly on how an employer terminates an employee. Gone are the days when an employer would fire at will. However, despite the fact that the Employment Act has legislated the process of termination, many employers are still unaware of the procedural steps of termination. The wake-up call comes when a judgment is issued against the company and it is at that point that the employer is then financially vulnerable.

It is also common knowledge that the labour courts have often favoured the employee so much so that even where there is sufficient and reasonable grounds as to why an employee should be dismissed, the employer will still be ordered to pay a huge amount for failure to follow the lawful procedure.

A simple example is in the case of Naqvi Syed Qmar v Paramount Bank Limited & another [2015] eKLR.  The Claimant who worked as a Chief Manager in the Bank, was suspected of stealing Kshs. 9,000,000/- based on the findings of an internal audit report and police investigations. He was arrested and arraigned in court and charged with the offence of stealing by servant. The Employer further publicized the said events in the newspaper. The charges were later withdrawn due to lack of sufficient evidence.

The court in determining this matter, held that even where there are reasons for suspicion of an offence, the same ought to be interrogated in depth. The employer ought to give the suspected employee an opportunity to defend himself and the PROCEDURE AS SET OUT IN LAW MUST BE FOLLOWED NO MATTER THE REASONS BEHIND THE INTENT TO DISMISS. The court then made the following orders

Termination of the contract was unfair and unlawful.

The employer was compensated at Kshs. 1,800,000 for unfair termination and at Kshs. 2,500,000 for defamation;

The employer pays Kshs. 2,500,000 for malicious prosecution.

The employer pays the employee the said sums within 30 days of the delivery of this Award, with an interest of 14% p.a. if the sum is not paid within the given period

This is a modest example that shows that something that may have seemed reasonable at the time of termination, can end up costing an employer in millions should the matter end up before the labour courts.

It is, therefore, necessary to involve a lawyer in not only reviewing your employment and general contracts but also review your company’s Human Resource Policy, create a checklist for the termination process, and train your HR manager on how to ensure that the company is not exposed to liability.

This article has been necessitated by our experience in the Employment And Labour Relations Court, where it has become increasingly apparent that companies can avoid financial losses arising out of labor disputes by simply counter checking their employment processes with a litigation lawyer.

At MMW Advocates, our commercial and litigation team has the experience and the knowledge to offer strategic legal advice. Our breadth of practice experience allows us to promptly handle almost every employment-related legal issue that may arise and anticipate potential roadblocks that may lead to disputes and attach liability.

We offer training sessions to management of various companies on the various labor laws and practices in Kenya which training includes notes on the current and various labor laws, the types of employment contracts; how to draft employment contracts, and the must-have clauses in such contracts; the types of termination under the Kenyan Law, the process that must be followed prior to termination and the documentation therein and remedies available to terminated employees.

Our training sessions integrate the law and business and are detailed on how to address everyday issues as opposed to feeding our client with law-school knowledge. This means it focuses on relevance and effectiveness.

Do not hesitate to reach out to the MMW Team.

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