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Justice Monica Mbaru stated that even with a written contract, employers must follow mandatory procedures.
The Employment and Labour Relations Court has faulted the Mombasa Water Supply & Sanitation Company Ltd (Mowassco) for unfairly dismissing its managing director.
Justice Monica Mbaru ruled that, before job termination, even where a written contract allows for it and payment instead of notice, procedural and fairness are mandatory.
The decision follows a case in which Anthony Njaramba sued the company, accusing it of terminating his employment without prior notice, hearing or justification.
Justice Mbaru allowed the claim and ordered Mowassco to pay him Sh1.6 million and Sh3.3 million for the six months unexpired contract. The judge said the labour law has introduced a new paradigm in employment relations where an employer cannot enforce an employment contract at will.
The court ruled that there is a significant change from the previous statutory regime, including the employer’s power to terminate a job at will.
“The employee must be provided with reasons for termination (of employment), the reasons must be genuine, valid, and reasonable,” ruled justice Mbaru.
The court added that an employer cannot purport to rely on an employment contract outside the law.
Justice Mbaru, in her August 8 decision, noted that the water company relied on communication from a third party, the county of Mombasa to end Mr Njaramba’s job.
She said the employment relationship was governed by a written contract between the claimant and the respondent.
“The assertion that the respondent received communication and directives to ensure a smooth handover and to facilitate the claimant’s promotion to the position of County Executive Committee Member (CECM) was devoid of due process, lacked both substantive and procedural fairness,” ruled the court.
Justice Mbaru noted that the company’s board was guided by the Legal and board affairs manager, who testified that the termination of employment was based on a letter from the county government.
“The respondent had access to legal expertise but chose to ignore all procedures and the law to effect the termination of employment,” ruled the court.
It also noted that Mr Njaramba had testified that he was the third managing director to face a similar fate, and at the time of his employment, he was dealing with two cases involving previous executives.
“The respondent has taken the view that it can do as it pleases despite the law; such blatant abuse of procedure should not be tolerated in a democratic and organised society such as ours,” ruled justice Mbaru.
The court noted that the claimant was at the peak of his career and was unaware of the alleged nomination to the county government, a position admitted by an official of the company; thus, the compensation claim was justified.
Mr Njaramba told the court that he was employed as managing director in 2019 and that on July 30, 2021, while on duty, he received a letter terminating his contract immediately.
He argued that there was no prior notice, hearing, or any justified reasons for the decision. Mr Njaramba said he was also issued a letter indicating that he had been promoted to CECM in the county government, but the letter was not addressed or copied to him, and the contents were strange, thus it could not justify his sacking.
He told the court that termination of his employment exposed him to distress and uncertainty since he remained jobless and no other employer was willing to hire him.
The water company, through Mr Tim Mugo, the legal and board affairs manager, told the court that the board received communication from the county government directing the smooth transition of Mr Njaramba to the nomination of CECM.
According to the company, by the time the claimant received the termination notice of his employment, he was unaware of his nomination to the county government of Mombasa. The company also said that there was no hearing or notice given before the board resolution to have the termination of employment notice issued to Mr Njaramba.
